STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL )

REGULATION, Florida Real Estate ) Commission, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2836

) NATIONAL HOME REALTY, INC., ) PHILIP MARZO and STEVE MISHKIN, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before SHARYN L. SMITH, Hearing Officer with the Division of Administrative Hearings, at the Broward County Courthouse, Fort Lauderdale, Florida on April 2, 1982. The following appearances were entered:

APPEARANCES

For Petitioner: Michael J. Cohen, Esquire

Suite 101 Kristin Building

2715 East Oakland Park Boulevard Ft. Lauderdale, Florida 33306

For Respondents: Brian Hal Leslie, Esquire

1795 North East 164th Street North Miami Beach, Florida 33160

The issue for determination at the final hearing was whether the Respondents' licenses should be revoked, suspended, or other disciplinary action imposed for the facts as alleged in the Administrative Complaint filed on September 29, 1981.

INTRODUCTION

By Four Count Administrative Complaint filed September 29, 1981, the Petitioner Department of Professional Regulation, Florida Real Estate Commission, in Count II charged National Home Realty, Inc., and Philip Marzo, licensed real estate brokers, with using an advance rental fee contract form which did not comport with Subsection 475.453(1), Florida Statutes and Rule 12V- 10.30, Florida Administrative Code, thereby violating Section 475.25(1)(b), Florida Statutes. Also, against said Respondents, Count I charged that an advance rental fee of $65 was obtained from Grace Pasquale for which refund was not made pursuant to said statute and rule. In Count IV, said Respondents and Steve Mishkin, a licensed real estate salesman, are charged with accepting an advance rental fee from Bruce Blair and failing to make a refund as required by said statute and rule.

In support of the allegations of the Administrative Complaint, Petitioner presented the testimony of Philip Marzo, Steve Mishkin and Bruce Blair.

Petitioner's Exhibits 1 through 9 were received into evidence. Respondents Marzo and Mishkin testified in their own behalf and presented no further witnesses or documentary evidence. Petitioner voluntarily dismissed the Respondent Brian Morgenstern and Count III of the Administrative Complaint at the onset of the hearing.

A Proposed Recommended Order has been filed by the Petitioner. To the extent that those proposed findings submitted by the Petitioner are not reflected in this Order, they are rejected as being either not supported by admissible evidence or as being irrelevant to the issues determined here.

FINDINGS OF FACT

Based upon the documentary evidence and the testimony taken at the hearing, the following relevant facts were uncontroverted:

1. At all times pertinent to this proceeding, Respondents National Home Realty, Inc. and Philip Marzo were licensed real estate brokers and Respondent Steve Mishkin was a licensed real estate salesman holding license numbers 0210856, 0056147 and 0151878, respectively.

   
   

2. At all times pertinent to this proceeding, National Home Realty, Inc. was qualified by Philip Marzo, a licensed real estate broker.

   
   

3. At all times pertinent to this proceeding, National Home Realty, Inc. was engaged in the business of negotiating rental contracts and in furnishing for an advance fee, rental information as to available residential rentals to prospective tenants. In connection therewith, the company used Service Agreements of which Petitioner's Exhibits 1 and 2 are accurate examples. The Service Agreements do not comport with Rule 12V-10.30, Florida Administrative Code, which requires a specific refund notice to be placed on any such contract, nor do the contracts comply with Section 475.453(1), Florida Statutes, which provides for full refund in the event the rental information provided by the broker or salesman to a prospective tenant is not current or accurate in any material respect.

   
   

4. In October of 1980, Grace Pasquale, as a prospective tenant, signed a rental service agreement with National Home Realty, Inc., on a form supplied by National Home Realty, and paid to National Home Realty a $65 cash advance fee for the specified rental services.

   
   

5. During a period of approximately 25 days after the date of the contract, Pasquale was not able to locate a residential rental to meet her requirements, as set forth in her rental contract, Petitioner's Exhibit 2, from the list of alleged available rentals supplied to her by National Home Realty. As a result, Pasquale made written demand within 30 days of the date of the contract for 75 percent of her advance fee, all as provided for by Section 475.453(1), Florida Statutes, and Rule 12V-10.30, Florida Administrative Code.

   
   

6. That on or about June of 1981, after intervention by the Department of Professional Regulation, Grace Pasquale received a refund.

7. On or about February 16, 1981, prospective tenant Bruce Blair paid to National Home Realty a $75 cash advance fee, for agreement for rental services including a list of available rentals to meet the specific requirements of prospective tenant Bruce Blair. Only one listing was supplied to Blair and this did not meet Blair's requirements as set forth in his agreement, Petitioner's Exhibit 6.

   
   

8. Failing and unable to obtain a rental by and through National Home Realty, Blair located a rental through his own efforts unconnected with the services of National Home Realty. Within 30 days of the date of his agreement, Petitioner's Exhibit 6, Blair made written demand on National Home Realty for a

   75 percent refund of his advance fee, in accordance with the provisions of Rule 12V-10.30, Florida Administrative Code.

   
   

9. In response to his demand, National Home Realty issued check number 1735, dated March 25, 1981, to the order of Bruce Blair on the account of National Home Realty, Inc. at the Barnett Bank for $18.75 being only 25 percent of the advance fee paid and, therefore, contrary to the provisions of the above stated rule.

   
   

10. When Blair presented the check for payment, it was not honored due to the account having been closed.

    
    

11. In April of 1981, Respondent paid Blair in cash for the balance due on his refund.

    
    

12. Respondent Marzo, the qualifying broker who worked in the office, never personally refused a 75 percent refund to anyone who requested the same within 30 days from the date of a service contract. However, while he was qualifying broker, certain salesmen in the office ignored demands for refunds. Marzo was unaware that this was occurring until it was brought to his attention through the Department's direct intervention. When Marzo realized there was a problem with the salesmen making timely refunds, he instituted an unwritten policy that anyone who requested a refund should be given one. Despite this directive, salesmen continued to refuse or delay refunds due to the manner in which commissions were paid by the office.

    
    

13. Respondents Marzo and Mishkin never met either Grace Pasquale or Bruce Blair.

    
    

14. Although Respondent Mishkin never denied a refund to anyone who requested one, he would harass or make a person who asked for a refund "feel pretty bad" for doing so. (See Transcript at 37)

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this dispute. See Section 120.57(1), Florida Statutes.

16. The Florida Real Estate Commission, within the Department of Professional Regulation, is empowered to take disciplinary action against a broker or a salesman if he is found guilty of any of the acts specified in Section 475.42, or Section 475.25, Florida Statutes. Respondents are charged with numerous violations of the statute which read as follows:

    
    

    Section 475.453 - Rental Information; contract or receipt; refund; penalty

    1. Each broker or salesman who attempts to negotiate a rental, or who furnished rental information to a prospective tenant, for a fee paid by the prospective tenant with a contract or receipt, which contract or receipt contains a provision for the repayment of any amount over 25 percent of the fee to the prospective tenant if the prospective tenant does not obtain a rental. If the rental information provided by the broker or salesman to a prospective tenant is not current or accurate in any material respect, the full fee shall be repaid to the prospective tenant upon demand. A demand from the prospective tenant for the return of the fee, or any part thereof, shall be made within 30 days following the day on which the real estate broker or salesman has contracted to perform services to the prospective tenant. The contract or receipt shall also conform to the guidelines adopted by the board in order to effect disclosure of material information regarding the service to be provided to the prospective tenant.

    2. The board may adopt a guideline for the form of the contract or receipt required to be provided by brokers or salesmen pursuant to the provisions of subsection (1).

       (3)(a) Any person who violates any provision of subsection (1) is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082, s. 775.083 or s. 775.084.

       (b) In addition to the penalty prescribed in paragraph (a), the license of any broker or salesman who participates in any rental information transaction which is in violation of the provisions of subsection (1) shall be subject to suspension or revocation by the board in the manner prescribed by law.

       
       

17. Rule 12V-10.30, Florida Administrative Code, States:

    
    

    1. Any broker or salesman who attempts to negotiate a rental or who furnishes information to a prospective tenant shall provide such prospective tenant with a contract or receipt agreement in writing, which contract or receipt agreement 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 any material aspect, you may demand within 30 days of this contract date, a return of your 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.

       
       

    2. Each contract or receipt agreement shall be contained on one side of one page not larger than 8 x 11 inches. The type size of the balance of the terms of the contract shall be in a size not smaller than 8 point type. 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.

       
       

18. Section 475.25(1), Florida Statutes, States:

    
    

    (b) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction in this state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a listing contract, written, oral, express or implied, in a real estate transaction; has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and has committed an overt act in furtherance of such intent, design or scheme. It shall be immaterial to the guilt of the licensee that the victim or intended victim of

    the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or

    that such victim or intended victim was a customer or a person in confidential relation with the licensee, or was an identified member of the general public;

    (d) Failed to account or deliver to any person, including a licensee under this chapter at the time which has been agreed upon or is required

    by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery, any personal property such as money, fund, deposit, check, draft,

    abstract of title, mortgage, conveyance, lease,

    or other document or thing of value, including a share of real estate commission, or any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property or which he is not in law or equity entitled to retain under the circumstances. However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account, the licensee shall promptly notify the board of such doubts and shall promptly:

    1. Request that the board issue an escrow disbursement order determining who is entitled to the escrowed property; or

    2. With the consent of all parties, submit the matter to arbitration; or

    3. By interpleader or otherwise, seek adjudication of the matter by a court.

    (3) Violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter.

    
    

19. Partially as a result of an extreme rental shortage, the widespread abuse of rental fee contracts caused Chapter 475.453, Florida Statutes, to be enacted. Pursuant to its terms, each prospective tenant must be advised clearly and plainly of their right to a full refund In the event the information received by them is not current or accurate in any material aspect. In the event a rental Is not finally obtained, a 75 percent refund is required to be paid. The evidence in this cause indicates without contradiction, that the prospective tenants who came to National Home Realty, Inc., were not advised of their right to a full refund if the information that was given to them was not current or accurate. They were also intentionally dissuaded from seeking a partial refund.

    
    

20. Although the Respondents National Home Realty, Inc. and Marzo were not directly involved in the refund problems that were caused within this company by the actions of certain salesmen, they had an affirmative duty to ensure that the actions of the salesmen comported with the requirements of law once they knew or should have known that internal problems in the operation of the office existed. Their failure to institute tangible corrective measures in the face of obvious problems is sufficient under the facts established in this case to impose disciplinary action against the Respondent corporation and Marzo. However, insufficient evidence was produced to show that Respondent Mishkin, a salesman, committed the acts alleged in the Administrative Complaint or was responsible for the actions of any salesman in refusing to make prompt refunds.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That a Final Order be entered revoking the license of National Home Realty, Inc., suspending the license of Philip Marzo for a period of six (6) months and dismissing the charges against Steve Mishkin.

DONE and ORDERED this 7th day of October, 1982, in Tallahassee, Florida.

SHARYN L. SMITH, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of October, 1982.

COPIES FURNISHED:

Michael J. Cohen, Esquire Suite 101 Kristin Building

2715 East Oakland Park Boulevard Fort Lauderdale, Florida 33306

Brian Hal Leslie, Esquire 1795 North East 164th Street

North Miami Beach, Florida 33160

Carlos B. Stafford, Executive Director Florida Real Estate Commission

400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802

Samuel R. Shorstein, Secretary Department of Professional Regulation Old Courthouse Square Building

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002836

Orders for Case No: 81-002836