STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE )

(Now Florida Real Estate )

Commission), )

)

Petitioner, )

)

vs. ) CASE NO. 82-329

)

JACK BRAUNSTEIN, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, on June 21, 1982, at Ft. Lauderdale, Florida, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Bruce Lamb, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: John P. Gaudiosi, Esquire

3801 North Federal Highway Pompano Beach, Florida 33064

ISSUE

Whether Respondent's license as a real estate broker should be suspended or revoked, or the licensee otherwise disciplined for alleged violations of Chapter 475, F.S. as set forth in Administrative Complaint dated December 22, 1981.

This proceeding arises from the filing of an administrative complaint by the Board of Real Estate against Jack Braunstein on December 22, 1981, which alleges that he failed to refund an advance rental fee to Annette Richard on May 13, 1980, thus violating a duty imposed upon him by law or by the terms of a listing contract in a real estate transaction in violation of subsection 475.25(1)(b), Florida Statutes. The complaint further alleges that Respondent thereby violated subsection 475.25 (1)(d), Florida Statutes, in failing to account to Ms. Richard, and violation of Section 475.453, Florida Statutes, for failing to provide repayment of any amount over 25 percent of the fee for rental information, if the prospective tenant does not obtain a rental.

Respondent requested an administrative hearing, and the case was referred to this Division for assignment of a Hearing Officer on February 8, 1982.

At the commencement of the hearing, the parties stipulated as to the truth of Paragraphs 2-3, 5-7, 9-11, and 19-20 of the Administrative Complaint. The parties further stipulated that Respondent was licensed by Petitioner at the time of the incident alleged in the Administrative Complaint.

Respondent objected to the proceeding on various grounds, as reflected in the transcript of the hearing. The Hearing Officer treated the objection as a motion to dismiss and denied the same.

Petitioner moved to amend Paragraph 22 of the Complaint to correct a typographical error to allege a violation of subsection 475.25(1)(d), F.S. in lieu of the inadvertent recitation of a violation of subsection 475.25(d), F.S. The motion was granted.

The post-hearing submission by the Petitioner has been fully considered, and those portions not adopted herein are considered to be either unnecessary, irrelevant, or unwarranted in fact or law.

FINDINGS OF FACT

1. Respondent Jack Braunstein is licensed as a real estate broker and was so licensed at all times relevant to the matters alleged in the Administrative Complaint. Respondent operates Rent-Aid, Inc. located in Fort Lauderdale, Florida, a corporate real estate broker, He is the active broker for that firm. (Petitioner's Exhibits 1-2, Stipulation)

   
   

2. On April 15, 1980, Annette H. Richard went to Respondent's firm to ascertain the availability of an apartment for rent in the school district where her child attended school. She had previously talked to Respondent by telephone concerning her needs, and Respondent had informed her that rentals were abundant and that she should come into the office. After she arrived, Respondent turned her over to his associate Jeannie Nemett who took down the information concerning Ms. Richard's apartment requirements. Ms. Nemett informed her that they could find her an apartment in the area, but had nothing available at that time. Although Ms. Nemett looked through the firm's book of apartment listings, she did not permit Ms. Richard to do so. Ms. Nemett told her that there was a new duplex listing not far from the desired area and Ms. Richard agreed to look at it. Ms. Nemett had explained the fact that the firm's services were available for a $50.00 "membership" fee. Since Ms. Richard did not have the money with her, she and Ms. Nemett stopped at the bank on the way to see the property and, after paying the requisite fee, Ms. Nemett gave her a copy of the "membership" agreement. She then showed the duplex and one other rental apartment to Ms. Richard. (Testimony of Richard, Nemett, Petitioner's Exhibit 3)

   
   

3. A few days later, Ms. Nemett, having identified some existing available apartments in the school district area in her book of listings, called Ms. Richard several times but could not reach her. The messages were recorded on a telephone answering device. Ms. Richard did not return the calls immediately. About four days after having been shown the duplex by Ms. Nemett, she found an apartment which met her needs as a result of a newspaper ad. Prior to locating this apartment, Ms. Richard had also left telephone messages for Ms. Nemett which had not been returned. About a week or ten days after their initial meeting, Ms. Richard telephoned Ms. Nemett and informed her that she had secured her own apartment and did not wish Rent-Aid, Inc. to proceed any further in her behalf. (Testimony of Nemett, Richard, Petitioner's Exhibit 3)

4. The agreement signed by Ms. Richard with Rent-Aid, Inc. included the following statement:

   
   

   If you do not obtain a rental you are entitled to receive a return of seventy-five percent of the fee paid, if you make demand within thirty days of this contract date. All notices shall be sent by certi-

   fied mail. A rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. (Emphasis added)

   
   

   By letter dated May 10, 1980, Ms. Richard requested a refund of her $50.00 fee from Rent-Aid, Inc., but by letter dated May 13, 1980, signed by Ms. Nemett, Ms. Richard was informed that a refund could not be made, as follows:

   
   

   It has been construed that the obtaining of rental property is when you receive listings--available, shown by us, in your

   price range and area, or any other listings which you agree to see. We did, in fact, show you available rental property under the terms of the Rent-Aid policy #011061.

   Also at that time, I left messages on your answering machine, concerning other avail- able rentals. Under the conditions and

   terms of this policy--a refund cannot be made.

   
   

   On advice of counsel, Respondent refunded the amount of $37.50 to Ms. Richard on January 11, 1982. (Testimony of Richard, Respondent, Petitioner's Exhibits 4-5)

   
   

5. On March 27, 1980, Respondent's attorney wrote to Salvatore A. Carpino, Staff Attorney of the Department of Professional Regulation enclosing Rent-Aid, Inc.`s contract form and requesting review of it to determine whether or not it met the requirements of Chapter 475. The form sent to Mr. Carpino contained the same language as that used in the Richard transaction. By letter of April 1, 1980, the attorney informed Respondent that he had heard from the Department of Professional Regulation about the case and that the form would be acceptable if he deleted the word "registered" in "registered mail." Thereafter, on May 8, 1980, the attorney again wrote Mr. Carpino enclosing print sizes of the form to determine if it met the Department's print size requirements. By letter of May 15, 1980, Carpino informed the attorney that the Respondent could continue to use the existing forms "with the changes that we have previously discussed." Respondent utilized the contract form in question in reliance upon the advice given to him by his attorney in the above regards, and believed that he was operating properly in accordance with the Department's requirements. He had inserted the definition of "obtaining a rental" in the contract form in order to eliminate the vagueness of the statute pertaining to refunds. (Testimony of Braunstein, supplemented by Respondent's Exhibits 1-2)

   
   

   CONCLUSIONS OF LAW

   
   

6. The gist of Petitioner's Administrative Complaint is that Respondent violated Section 475.453, Florida Statutes, by failing to make a partial refund

   to Ms. Richard upon her demand, thus giving rise to grounds for disciplinary action under subsection 475.25(1)(b), Florida Statutes, by violating a duty imposed upon him by law or by the terms of a listing contract in a real estate transaction, and under subsection 475.25(1)(d), Florida Statutes, in failing to account or deliver to any person, upon demand of any person entitled to such accounting and delivery, any personal property such as money, fund, deposit, or check. The statutory provisions in question read pertinently as follows:

   
   

   1. Discipline. --

      1. The board . . . may suspend a license for a period not exceeding

   10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand, if it finds that the licensee . . . has:

   (b) . . . 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 . . .

   (d) Failed to account or deliver

   to any person . . . 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 . . . 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.

   
   

   475.453 Rental information; contract or receipt; refund; penalty. --

   1. Each broker . . . who furnishes rental information to a prospective tenant, for a fee paid by the prospective tenant, shall provide such 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. 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 . . .

   has contracted to perform services to the prospective tenant . . . . (Emphasis added)

   
   

   It is apparent that the disposition of this case turns on the definition of the words "obtain a rental" as used in subsection 475.453, F.S. Respondent's form agreement which was utilized in the Richard transaction purported to bind the client to its definition that a "rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by

   member." Even if it could be said that the quoted language of the contract was in compliance with the terms of the statute, the circumstances surrounding the transaction show that the company had not provided a suitable rental unit to Ms. Richard prior to the time she requested a refund. No time frames were contained in the agreement as to the provision of a suitable available rental unit and, accordingly, Ms. Richard was free to request the partial refund at any time after Respondent had had a reasonable time to provide the requested services.

   Although Respondent apparently had suitable units available from the outset, this information had not been conveyed to Ms. Richard and, accordingly, the firm had not provided an appropriate unit and Ms. Richard had not "obtained" a rental prior to her timely demand for refund. Although subsection 475.453(1), Florida Statutes requires that the full fee be repaid to the prospective tenant if the rental information provided is not current or accurate, there is no duty imposed by that section to make a partial refund if the client does not "obtain" a rental. Thus, there is no violation of a duty imposed by law shown here.

   Neither was there a "listing contract" involved in this transaction. Thus, no violation of subsection 475.25(1)(b) has been established.

   
   

7. However, Respondent's failure to make partial refund to Ms. Richard upon her timely demand constituted grounds for discipline under subsection 475.25(1)(d), F.S. by failing to account or deliver to her money which had come into his hands and which he was not entitled to retain under the contract. See Department of Professional Regulation, Board of Real Estate v. Jack Braunstein and Rent-Aid, Inc., DOAH Case No. 81-2641.

   
   

8. In view of the foregoing, and inasmuch as Petitioner did not seek to attack the language contained in the Rent-Aid, Inc. contract in its Administrative Complaint, it is unnecessary to address Respondent's contentions concerning the approval of the contract's format by one of Petitioner's staff attorneys. Neither is Respondent absolved by his belated refund to Ms. Richard which came only after the Administrative Complaint herein was filed. Such action on his part only can serve as a matter in mitigation in this proceeding.

   
   

9. In view of the relatively minor nature of the violation in question which arose out of a single incident, it is considered that an appropriate penalty would be an administrative fine of $100 and a private reprimand.

RECOMMENDATION

That the Florida Real Estate Commission (formerly Board of Real Estate) issue a private reprimand and impose a $100 administrative fine against Respondent, Jack Braunstein, pursuant to subsection 475.25(1)(d), Florida Statutes.

DONE and ENTERED this 20th day of July, 1982.

THOMAS C. OLDHAM

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 20th day of July, 1982.

COPIES FURNISHED:

Bruce Lamb, Esquire Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32301

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

Mr. C. B. Stafford Executive Director

Florida Real Estate Commission

P. O. Box 1900

Orlando, Florida 32801

Docket for Case No: 82-000329

Orders for Case No: 82-000329