STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE )

)

Petitioner, )

)

vs. ) CASE NO. 81-2641

) JACK BRAUNSTEIN & RENT AID, INC. )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter after due notice, in Ft.

Lauderdale, Florida, on February 18, 1982, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Michael J. Cohen, Esquire

2715 East Oakland Park Boulevard Suite 101

Ft. Lauderdale, Florida 33306

For Respondents: John P. Gaudiosi, Esquire

3801 North Federal Highway Pompano Beach, Florida 33064

ISSUE PRESENTED

Whether Respondents' licenses as real estate brokers should be suspended or revoked, or the licensees otherwise disciplined, for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint, dated September 28, 1981.

This proceeding is based on an administrative complaint filed by Petitioner, Board of Real Estate, alleging that Respondents, while engaged in a rental service business which advertised and sold rental property information or lists, for an advance fee to prospective lessees, utilized a contract or receipt agreement which included language defining when a "rental has been obtained" that was contrary to the intent of Rule 21V-10.30, Florida Administrative Code, and that therefore Respondents had violated Subsection 475.453 and 475.25(1)(b), Florida Statutes. It further alleged that Respondents failed to refund 75 percent of an advance fee to specific prospective tenants as required by Subsection 475.25(1)(e), Florida Statutes and therefore constituted a violation of Subsection 475.25(1)(d), Florida Statutes.

At the commencement of the hearing, the parties submitted a Proposed Stipulation of facts which was accepted by the Hearing Officer and constitutes the Findings of Fact hereinafter. No witnesses testified at the proceeding nor were any exhibits entered in evidence other than the four exhibits attached to the Stipulation. (Exhibit 1)

FINDINGS OF FACT

1. Respondent Jack Braunstein is a licensed real estate broker having been issued license number 0146924. The last known address of this Respondent is 916 North Federal Highway, Fort Lauderdale, Florida 33304.

   
   

2. Respondent Rent Aid, Inc., is a licensed corporate real estate broker having been issued license number 0133234. The last known main office address of Rent Aid, Inc., is 916 North Federal Highway, Fort Lauderdale, Florida 33304.

   
   

3. At all times material herein Respondent Braunstein was the sole active broker of and for Respondent Rent Aid, Inc., doing business at the corporate main office located in Fort Lauderdale, Florida.

   
   

4. As said active broker, Braunstein was responsible and liable for the acts and/or omissions of the associates of Rent Aid, Inc. performed in the scope of their employment; and was responsible and liable for the acts and/or omissions of Rent Aid, Inc.

   
   

5. At all times material herein, Respondent Rent Aid, Inc., was engaged in a full service real estate brokerage business which included representing potential buyers and sellers of real property and potential landlords and tenants with regard to rental properties. As part of the business Rent Aid, Inc. entered into contracts with prospective tenants for an advanced fee, as shown by Exhibit "A" to the Complaint and incorporated herein by reference.

   
   

6. That the contract or receipt agreement forms provided by the Respondents, have inserted therein additional language as to specifically stating that "a rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member.

   
   

7. On or about September 16, 1980 Jan Spear and Deborah Nigro entered into the contract, an accurate copy of which is appended to the Complaint as Exhibit "A", with Rent Aid, Inc.

   
   

8. That under the terms of the contract, Respondent had the discretion to refuse any and all refunds if they had shown to the prospective tenant an available rental unit which met the terms specified and requested by the prospective tenant, even if the prospective tenant declined to rent said unit and demanded a refund of the paid fee within the required time frame.

   
   

9. That Respondent's practice was to refuse demands for refund made where, in Respondent's opinion, a bona fide effort had been made to obtain a rental, which efforts had been unsuccessful through no fault of Respondent's.

10. Jan Spear and Deborah Negro made written demand upon Respondent's for a partial refund of the fifty ($50) fee which they had paid Respondent's pursuant to the contract. This demand was made within thirty days of the contract date as shown by therefund refusal dated October 12, 1980, attached to the Complaint as Exhibit "B" and incorporated herein by reference as true and accurate.

    
    

11. The contract utilized by Respondent's does not strictly conform to the refund required by Rule 21V-10,30 in that the conditions under which a refund would be payable are restricted beyond the scope of said Rule, and SS 475.453(1), Florida Statutes.

    
    

12. Respondent utilized the Contract form in question in reliance upon advice received from his prior counsel, Gregory Jones, as shown by a letter dated April 1, 1980. A true and accurate copy of which is attached hereto as Exhibit "C".

    
    

13. Sal Carpino, attorney for the Department of Professional Regulation, had been provided with a copy of the form utilized by Respondent and had approved the format of said form without approving a discrepancy of the language in question in this proceeding, to wit: "a rental has been obtained with company (Rent Aid, Inc.) provides a guaranteed available rental unit upon the terms specified and requested by members."

    
    

14. In response to this proceeding, Respondent has made full and complete refund to Jan Spears and Deborah Nigro and has agreed to voluntarily stop all use of the Contract form in question, and use only such a form as strictly complies with 475.453(1) and Rule 210-10.30 and to furnish a copy of said form to the Department conformance with said Rule."

    
    

    CONCLUSIONS OF LAW

    
    

15. Section 475.453(1) Florida Statutes, makes provision for full, refunds of fees to prospective tenants upon timely demand when rental, information provided by a broker is not current or accurate in any material respect. It further provides that the contract or receipt used by the broker shall include specific language as to partial refunds if the prospective tenant does not "obtain" a rental, and that such contract or receipt shall conform to guidelines adopted by the Board of Real Estate. Pursuant to the statute, Petitioner's Rule 2IV-10.30 provides pertinently as follows:

    
    

    1. Any broker or salesman who attempts

       to negotiate a rental or who furnishes in for- mation to a prospective tenant for a fee paid by the tenant shall provide such prospective tenant with a contract or receipt agreement

       in writing which contract or receipt agree- ment must contain the following provision or legend in type size 10 point bold or larger:

       
       

       NOTICE

       
       

       PURSUANT TO FLORIDA LAW:

       
       

       If the rental information provided under this contract is not current or accurate in an material aspect,

       you may demand within 30 days of this contract date a refund of your full fee paid. If you do not obtain a rental you are entitled to receive

       a return of 75 percent of the fee paid, if you make demand within 30 days of

       this contract date. Each rental data company shall furnish to the Department a copy of its contract or receipt agreement currently being utilized within 30 days of the commencing use

       of such agreement.

       
       

16. Petitioner seeks to take disciplinary action against Respondents under Subsection 475.25(1)(b), Florida Statutes, for violation of Section 475.453,

    F.S. and Rule 2IV-10.30, F.A.C., based on Respondents' "affirmative acts of providing information contrary to the intent of Rule 2IV-10.30" by including a definition of when "a rental has been obtained" in its contract. Petitioner alleges that Respondents acted contrary to the common meaning of those words. This is undoubtedly true and, in fact, Paragraph 11 of the Stipulation concedes that the contract does not strictly conform to the requirements of the rule and restricts payment of refunds beyond the scope of both the rule and the statutory provision. However, neither Section 475.453, F.S. nor Rule 2IV-10.30, F.A.C. restricts a broker from providing additional provisions in its contracts other than those specified in the rule. Respondents included the pertinent required language of the rule in its contracts. The mere fact that Respondents included an unusual definition, which was made known to customers at the time they sought Respondents' services as indicated by their signatures on the "membership" form, does not rise to the level of fraud, misrepresentation, or dishonest dealing in violation of Subsection 475.25 (1)(b), but is considered to violate the rule in question by changing the common meaning of the term "obtain a rental" which was required to be inserted in any contract or receipt agreement. It is clear that the legislature intended that a customer should receive a partial refund if the broker's services did not result in a rental for whatever reasons.

    
    

17. Petitioner's Count II seeks to find a violation of Subsection 475.25(1)(e), F.S. for violating Subsection 475.25(1)(d), F.S. in that Respondents failed to refund 75 percent of a fee, after customers in a transaction made a timely written demand for the same, and thus failed account and deliver property to which they were not in law or equity entitled to retain. Although Section 475.453 does not specifically require a partial refund to a prospective tenant when he does not obtain a rental (as it does for full refunds when rental information is not current or accurate), it is considered that the agreement between the parties, albeit the inclusion of the improper language as to when a customer "obtains" a rental, requires the broker to make the partial refund upon timely demand. Therefore, Respondents in this instance failed to account for or deliver the partial refund which they were not "in law or equity entitled to retain under the circumstances," in violation of Subsection 475.25(1)(d), P.S.

    
    

18. Petitioner has conceded that Respondents' actions constitute only a technical violation of the law and recommends that an appropriate penalty would be a private reprimand and a $100 administrative fine. It is considered that the recommended penalty is appropriate in this case.

RECOMMENDATION

That the Board of Real Estate issue a private reprimand

and impose a $100 fine against Respondents Jack Braunstein and Rent Aid, Inc. for violation of Subsections 475.25(1)(d) and (e), Florida Statutes.

DONE AND ENTERED this day of March, 1982, in Tallahassee, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1982.

COPIES FURNISHED:

Michael J. Cohen, Esquire Suite 101

2715 East Oakland Park Boulevard Ft. Lauderdale, Florida 33306

John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064

Frederick H. Wilsen, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

C.B. Stafford, Executive Director Board of Real Estate

Post Office Box 1900 Orlando, Florida 32801

Docket for Case No: 81-002641

Orders for Case No: 81-002641