Judges: J. LAWRENCE JOHNSTON
Agency: Department of Business and Professional Regulation
Latest Update: Jul. 21, 1987
Summary: Recommended Order to reprimand and fine brokers $500 each for advertising deceptive in form or content; that buyer pays no commission, license as buyer's broker.
86-4102.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL ) REGULATION, )
)
Petitioner, )
)
vs. ) CASE NO. 86-4102
) FREDERICK HODGDON and PELICAN ) REALTY OF MARCO ISLAND, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
For Petitioner: James H. Gillis, Esquire, of Orlando
For Respondent: Michael R. McDonnell, Esquire, of Naples
Frederick Hodgdon (Hodgdon) does business as, and is qualifying broker of, Pelican Realty of Marco Island, Inc., (Pelican Realty). Petitioner, Department of Professional Regulation, charges Hodgdon and Pelican Realty with fraudulent, false, deceptive and misleading advertising in violation of Section 475.25(1)(c), Florida Statutes (1985). Hodgdon and Pelican Realty deny the charges. A formal administrative hearing was held in the case in Naples, on June 9, 1987, Respondents ordered the preparation of a transcript of the hearing, and Petitioner requested and received 20 days from the filing of the transcript for the parties to file Proposed recommended orders. The transcript was filed on June 23, 1987, making Proposed recommended orders due on July 13, 1987. Neither party timely filed a Proposed recommended order.
FINDINGS OF FACT
Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934.
July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze:
DO YOU KNOW ... that all Florida real estate brokers are agents for
the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer?
UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay
no fees or commissions. Call or send for our informative brochure, you will be glad you did.
The real estate buyer's best bet for the best price is to have a Buyer's Broker.
On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/
BUYER BEWARE!
DON'T BUY REAL ESTATE ON MARCO ISLAND.
... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved
by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee.
The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE!
... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new
roof and a seawall that is on the verge of collapse.
Thats what!
... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down.
INCREDIBLE!
.... Paragraph 7) states quote:
"Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any
of Seller's or broker's agents" (Excluding
those rare occasions when the seller and his agents remain silent.)
INCREDIBLE!
... The above subject sections of Paragraphs
5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side.
... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to
the Buyer's best interests.
... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are
at NO additional expense to the buyer.
CALL US FOR FURTHER DETAILS. NOW!!
On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News:
CASH BACK
FOR THE REAL
ESTATE BUYER.
THAT'S INCREDIBLE!
Pelican Realty GUARANTEES CASH BACK to every buyer on every sale.
The bigger the sale, the bigger the cash gift to the buyer.
On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price
for the seller.
The thousands you SAVE already belong to you.
THINK ABOUT IT!
Call us for further details NOW!
"WE PAY OUR BUYERS TO DO BUSINESS WITH US"
There is nothing false or fraudulent about the three advertisements.
However, the following statements in the advertisements are deceptive or misleading in form or content:
The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale.
The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker.
The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer.
Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate.
Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
CONCLUSIONS OF LAW
Section 475.25(1)(c), Florida Statutes (1985), provides:
(1) The commission may deny an application for licensure, registration, or permit, or renewal thereof; may suspend a license or permit for a period not exceeding 10 years; may revoke
a license or permit; may impose an administrative fine not to exceed
$1,000 for each count or separate offense; and may issue a reprimand, or any or all of the foregoing, if it finds that the licensee, permittee, or applicant:
* * *
(c) Has advertised property or services in a manner which is fraudulent, false,
deceptive, or misleading in form or content.
As found, three of the representations in respondents' advertising were deceptive or misleading in form or content, in violation of Section 475.25(1)(c). The other representations in the advertisements were legal. None of the representations were clearly false or fraudulent.
RECOMMENDATION
Based on the foregoing Findings Of Fact and Conclusions Of Law, it is recommended that the Florida Real Estate Commission enter a final order (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985).
RECOMMENDED this 21st day of July, 1987, in Tallahassee, Florida.
J. LAWRENCE JOHNSTON 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 July, 1987.
ENDNOTE
1/ This may be the advertisement run on February 12, not February 19, 1986; but the Administrative Complaint attaches a copy of this advertisement as the advertisement used on February 19, 1986, and the respondents stipulated for purposes of this proceeding that it is the advertisement the respondents ran on February 19, 1986, as alleged.
COPIES FURNISHED:
James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
Michael R. McDonnell, Esquire The Commons
Suite 304
720 Goodlette Road
Naples, Florida 33940
Harold Huff Executive Director
Florida Real Estate Commission Post Office Box 1900
Orlando, Florida 32802
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
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION
DEPARTMENT OF PROFESSIONAL REGULATION DIVISION OF REAL ESTATE,
Petitioner,
CASE NOS.: 0153724
vs. 0152907
DOAH NO.: 86-4102
FREDERICK HODGDON and PELICAN REALTY OF MARCO ISLAND, INC.,
Respondents.
/
FINAL ORDER
The Florida Real Estate Commission heard this case on September 15, 1987 to issue a Final Order.
Hearing Officer J. Lawrence Johnston of the Division of Administrative Hearings presided over a formal hearing on June 9, 1987. On July 21, 1987, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. On August 4, 1987, Respondents timely filed Exceptions to the Recommended Order. After a
complete examination of the entire record, each and every Exception filed by the Respondents is rejected as not being supported by the evidence on record. A copy of this Recommended Order is attached hereto as Exhibit A and made a part hereof.
However, as to the Recommendation, after a complete review of the record, the Florida Real Estate Commission hereby ORDERS:
That the Respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., be, and the same are hereby, issued a reprimand;
That an administrative fine in the amount of $500. be, and the same is hereby, imposed to and upon each of the said Respondents, such fine to be paid by the Respondents within 30 days from the date this Order becomes effective; and, should either or both Respondents fail to pay said fines within the time indicated, said Respondents license or registration shall be revoked.
This Order shall be effective 30 days from date of filing with the Clerk of the Department of Professional Regulation. This Order shall be appealable to the Distrist Court of Appeal within 30 days from filing date.
DONE and ORDERED this 15th day of September, 1987 in Orlando, Florida.
Darlene F. Keller, Acting Director Florida Real Estate Commission
I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Michael R. N. McDonnell, McDonnell & Berry, The Commons, Suite 304, 720 Goodlette Road, Naples, Florida 33940; to Hearing Officer J. Lawrence Johnston, Division of Administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida 32301; and to James H. Gillis, DPR, Post Office Box 1900, Orlando, Florida 32802, this 22nd day of September, 1987.
Darlene F. Keller
MO:ba
Case Nos.: 0153724
0152907
DOAH No. 86-4102
Docket for Case No: 86-004102
Orders for Case No: 86-004102
| Issue Date |
Document |
Summary |
|
Sep. 15, 1987 |
Agency Final Order
|
|
|
Jul. 21, 1987 |
Recommended Order
|
Recommended Order to reprimand and fine brokers $500 each for advertising deceptive in form or content; that buyer pays no commission, license as buyer's broker.
|
