STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ) ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 86-3340

) SHANKAR S. AGARWAL and SUPER ) REALTY, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause was heard by Linda M. Rigot, on January 26, 1987 at the University of Miami School of Law in Coral Gables, Florida.

Petitioner Department of Professional Regulation, Division of Real Estate, was represented by Arthur R. Shell, Jr., Esquire, Orlando, Florida. Respondent Shankar S. Agarwal appeared on his own behalf and on behalf of Super Realty, Inc., although for a short time during the final hearing Respondents were represented by Dennis E. Berger, Esquire, Fort Lauderdale, Florida.

Petitioner filed an Administrative Complaint against Respondents seeking to take disciplinary action against their real estate broker licenses, and Respondents timely requested a formal hearing. Accordingly, the issues for determination herein are whether Respondents are guilty of the allegations contained within that Administrative Complaint, and, if so, what disciplinary action should be taken, if any.

Petitioner presented the testimony of Warren Wayne Fieldhouse and Zane Harrington. Respondents also presented the testimony of Warren Wayne Fieldhouse. Additionally, Petitioner's exhibits numbered 1-3 and Respondents' exhibits numbered 1-5 were admitted in evidence.

Only Petitioner submitted post-hearing Proposed Findings of Fact in the form of a Proposed Recommended Order. All of Petitioner's Proposed Findings of Fact have been adopted in this Recommended Order either verbatim or in substance except far for proposed finding numbered 14 which was rejected as not constituting a Finding of Fact and proposed finding numbered 18 which was rejected as not being supported by the evidence.

FINDINGS OF FACT

1. Respondent Shankar S. Agarwal is now and was at all times material hereto a licensed real estate broker in the State of Florida having been issued license number 0312860. The last license issued was as a broker.

2. Respondent Super Realty, Inc., is now and was at all times material hereto a licensed real estate corporation in the State of Florida having been issued license number 0231630. The last license issued was as a broker located in Hollywood, Florida.

   
   

3. At all times material hereto, Respondent Shankar S. Agarwal was licensed and operating as a qualifying broker and officer for Respondent Super Realty, Inc.

   
   

4. Respondents advertised for sale by newspaper advertisement a VA repossessed property being a four unit apartment building in Fort Lauderdale, Florida.

   
   

5. In April, 1985, Warren and Judith Fieldhouse responded to Respondents' ad, and Respondent Agarwal arranged to meet the Fieldhouses at the property.

   
   

6. At the property, the Fieldhouses informed Respondents that they wished to purchase a property as an investment and required that any property purchased by them result in income to them as opposed to resulting in a loss for them. Respondent Agarwal specifically represented to the Fieldhouses that the rental character of the neighborhood had been assessed by the Respondents, that Respondents were qualified to appraise the rental character, and that each unit could be rented for $300 or more per month. Respondent Agarwal further represented that the rent for the property would therefore exceed its expenses.

   
   

7. The Fieldhouses decided that they wished to purchase the property based upon Respondents' representations. Respondent Agarwal required the Fieldhouses to give him a check for $1,000 a while still at the property before he would return with them to the office of Super Realty, Inc., to draft a purchase contract.

   
   

8. Respondent Agarwal and the Fieldhouses went to Super Realty, Inc., where a purchase contract was drafted by Respondent Agarwal and signed by the Fieldhouses. Respondent Agarwal refused to give to the Fieldhouses a copy of that contract. Respondent Agarwal further advised the Fieldhouses that they were to obtain the required liability insurance on the property from his insurance agency and that they were not to use their own insurance agency. The Fieldhouses refused to comply with Agarwal's direction to them.

   
   

9. Changes were subsequently made by Respondents to the Fieldhouses' purchase contract. Although those changes were approved telephonically by the Fieldhouses, Respondents never obtained the Fieldhouses signatures approving the changes in the contract.

   
   

10. A closing was scheduled by Respondents at the office of Super Realty, Inc., on May 22, 1985. The Fieldhouses inspected the property just before the closing and found that the property's "as is" condition on the day of closing was worse than its "as is" condition on the day that they first saw it and entered into the contract for the purchase and sale of the property. Appliances were missing, and damage was done to the structure. The Fieldhouses objected to the condition of the property on the date of closing. Yet, the closing began.

    
    

11. Respondent Agarwal began handing the Fieldhouses individual documents to sign. When he handed them a required financial disclosure statement, the Fieldhouses realized that the mortgage plus insurance and taxes payments would exceed the rental income which Respondents had represented could be projected from the units, that the amount of payments and other representations initially

    made by the Respondents were not incorporated into the closing documents, and the rental income for the property would not exceed the property's monthly expenses.

    
    

12. The Fieldhouses refused to continue with the closing. They demanded copies of the documents that they had signed, but Respondents refused to give them copies of those documents. They demanded a refund from Respondents of their $1,000 deposit, but Respondents refused to refund their money to them.

    
    

13. Although the Fieldhouses had signed a note and mortgage on the property before they refused to continue forward with the closing, they gave Respondents no monies toward the purchase of the property to increase the $1,000 earnest money deposit to the required down payment for the property.

    Respondents knew that the Fieldhouses did not pay the required cash to close on the property, the additional consideration required under the contracts.

    
    

14. After the closing, the Fieldhouses made additional demands on Respondent for the return of their $1,000. Respondents refused to return that money to them and further refused to discuss the matter with them further.

    
    

15. Respondents submitted the Fieldhouse closing documents to the Veterans Administration claiming a sales commission due to the Respondents in the amount of $5,740, even though Respondents knew that the sales transaction had never closed. Since the Veterans Administration had experienced difficulties with Respondents' complying with their rules and regulations on previous occasions, the VA took the position that the Respondents were not entitled to a commission since no sale had taken place and that the Respondents should refund to the Fieldhouses their $1,000.

    
    

16. Respondents sued the Veterans Administration for a sales commission. At the time that Respondents sued for a commission, they knew that they were entitled to no commission since there was no sale. When the Veterans Administration filed an Answer to Respondents' Complaint indicating that it intended to fully defend Respondents' false claim, Respondents voluntarily dismissed their litigation against the Veterans Administration.

    
    

17. The VA now has possession of the Fieldhouses' $1,000 deposit which it intends to return to the Fieldhouses.

    
    

18. Although Mr. Fieldhouse was a licensed real estate salesman during the time period material hereto, he had not actively worked as a real estate salesman. Therefore, the Fieldhouses relied upon the Respondents as licensees to responsively perform the sales transaction and further relied upon Respondents' representations regarding the property's income and expenses.

    
    

19. Respondents never advised the Florida Real Estate Commission that demands had been made for the return of the $1,000 which Respondents held in escrow until such time as they voluntarily forwarded the money to the Veterans Administration despite the Fieldhouses' demands for its return to them.

    
    

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. Section 120.57(1), Florida Statutes.

21. The Administrative Complaint filed herein contains six counts, three against the individual Respondent and three identical charges against the corporate Respondent. Both Respondents are, therefore, charged with having violated with regard to the Fieldhouses' transaction Sections 475.25(1)(b), having committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction; 475.25(1)(d), having failed to notify the Florida Real Estate Commission of a deposit dispute and having failed to deliver a deposit on demand; and 475.25(1)(j), Florida Statutes, having failed to advise a prospective purchaser to consult with his attorney on the merchantability of the title or to obtain title insurance. Petitioner has clearly proven that both Respondents are guilty of violating Sections 475.25(1)(b) and (d), Florida Statutes. However, Petitioner only presented uncorroborated hearsay in support of its allegation that the Respondents violated Section 475.25(1)(j), Florida Statutes.

    
    

22. In its Proposed Recommended Order, Petitioner recommends that the appropriate penalty in this matter would be revocation of the Respondents' licenses. No evidence in mitigation of that recommended penalty was offered during the final hearing in this cause, and the level of dishonesty exhibited by the Respondents in the Fieldhouse transaction indicates that serious disciplinary action is warranted. Accordingly, Petitioner's recommended penalty is appropriate under the circumstances.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore,

RECOMMENDED that a Final Order be entered dismissing Counts V and VI of the Administrative Complaint, finding Respondents guilty of the remaining allegations in the Administrative Complaint, and revoking Respondents' real estate broker licenses.

DONE and RECOMMENDED this 21st day of April 1987, in Tallahassee, Florida.

LINDA M. RIGOT

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 21st day of April, 1987.

COPIES FURNISHED:

Arthur R. Shell, Jr., Esquire Division of Real Estate

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

Shankar S. Agarwal 6912 Stirling Road

Hollywood, Florida 33024

Super Realty, Inc. c/o Shankar S. Agarwal 6912 Stirling Road

Hollywood, Florida 33024

Van Poole, Secretary Department of Professional

Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Joseph A. Sole, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Harold Huff, Executive Director Division of Real Estate

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

Docket for Case No: 86-003340

Orders for Case No: 86-003340