STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, FLORIDA REAL ESTATE ) COMMISSION, )

)

Petitioner, )

)

vs. ) CASE NO. 87-2681

) PHILLIP A. BANKS & ABODE REALTY, ) INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick held a public hearing in the above-styled case on November 16, 1987, in Miami, Florida.

APPEARANCES

For Petitioner: James H. Gillis, Esquire

Division of Real Estate Legal Section

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

For Respondents: Brian M. Berman, Esquire

SMITH & BERMAN, P.A.

2310 Hollywood Boulevard

Hollywood, Florida 33020 PRELIMINARY STATEMENT

By Administrative Complaint, filed with the Division of Administrative Hearings on June 25, 1987, Petitioner charges that Respondents held an ownership interest in real property that was not divulged to the purchaser, and that they failed to account and deliver a deposit as required by law, all in violation of Sections 475.25(1)(b) and (d), Florida Statutes.

At hearing, Petitioner called as witnesses: Patricia Turner, Richard Miller, Joe Ellis, and Phillip A. Banks. Petitioner's Exhibits 1-10 were received into evidence. Respondents called Patricia Turner as a witness, and their Exhibits 1-3 were received into evidence.

The transcript of hearing was filed December 9, 1987, and the parties were granted leave until December 21, 1987, to file Proposed Findings of Fact.

Neither party filed such proposals in a timely manner.

FINDINGS OF FACT

1. Respondents Phillip A. Banks (Banks) was at all times Material hereto a licensed real estate broker in the State of Florida, having been issued license number 0324865. Banks was the qualifying broker for Respondent, Abode Realty, Inc., which was at all tines material hereto registered as a real estate broker in the State of Florida, having been issued license number 0232550.

   
   

2. On August 24, 1985, Respondents received in escrow $2,200 from Patricia Turner, as a deposit on her agreement to purchase a home located at 1300 Westview Drive, Miami, Florida. Pertinent to this case, the agreement was conditioned on Ms. Turner's ability to qualify for and obtain a first mortgage, insured by the FHA or guaranteed by the VA, in an amount not less than $40,837.

   
   

3. Ms. Turner's application for the subject mortgage was duly submitted to American International Mortgage Company (American International). That application was, however, denied because the property did not appraise at the contract price.

   
   

4. Following the denial of her application for mortgage financing on the first house, Ms. turner entered into an agreement through Respondents, dated November 20, 1985, to purchase another home located at 2501 Northwest 155 Terrace, Miami, Florida. At that time, Respondents returned to Ms. Turner the

   $2,200 deposit on the first contract, and she in turn deposited such sums with Respondents as a deposit on her agreement to purchase the second home.

   Pertinent to this case, the agreement was conditioned on Ms. Turner's ability to qualify for and obtain a first mortgage, insured by the FHA or guaranteed by the VA, in an amount not less than $39,867. The agreement further provided:

   
   

   When this contract is executed by the Purchaser and the Seller and the sale is not closed due to any default or failure on the part of the Purchaser, Purchaser shall be liable to Broker for full amount of brokerage fee.

   
   

   The agreed brokerage fee was 7 percent of the purchase price, or $2,800.

   
   

5. The second home was owned by Independent Properties, Inc., a corporation owned, at least in part, by Banks. This ownership interest was, however, fully disclosed to Ms. Turner at the time the agreement was executed.

   
   

6. Ms. Turner's application for the mortgage on the second home, as with the first home, was processed by American International. While that loan was being processed, Ms. Turner contracted to purchase and purchased, unbeknown to Respondents or American International, a different home (the third home). When a American International discovered this fact, Ms. Turner's application was disapproved because she lacked sufficient resources to afford two homes and because she could not comply with the FHA regulation which required that the buyer reside in the home. But for Ms. Turner's purchase of the third home, she would have qualified for the mortgage contemplated by the second agreement.

   
   

7. Ms. Turner entered into the agreement to purchase the third home on or about January 20, 1986, and her application for the mortgage on the second home was disapproved by American International on April 1, 1986. In the interim, on January 30, 1986, Ms. Turner secured a loan of $1,000 from Banks on the pretext that her uncle had been charged with a criminal offense and the monies were needed to secure his release. The proof established, however, that Ms. Turner

   had no intention of fulfilling her agreement to purchase the second home, and that the pretext she used to secure $1,000 from Banks was but a subterfuge to secure the return of some of her deposit.

   
   

8. Ms. Turner made no demand for the return of any of her deposit monies. She did, however, file a civil action in January 1987 to recover such monies. That action was dismissed on motion of Respondents, but faced with the threat of continued litigation Respondents offered to settle with her for $1,100. Ms. Turner rejected Respondents' offer, and commenced a second civil action. That action resulted in the entry of a final judgment in her favor for $1,100 and costs. Respondents are ready, willing and able to satisfy such judgment, and have attempted to satisfy such judgment through Ms. Turner's counsel without success.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

   
   

10. The Administrative Complaint in this case charges that Respondents held an ownership interest in real property that was not divulged to the purchaser, and that they failed to account and deliver a deposit as required by law, all in violation of Sections 475.25(1)(b) and (d), Florida Statutes.

    
    

11. The proof established, however, that Respondents' ownership interest in the subject property was fully disclosed. The proof further established that Respondents did not fail to account and deliver a deposit as required by law. See: Fleischman v. Department of Professional Regulation, 441 So.2d 1121 DCA 1983).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final order be entered dismissing the Administrative

Complaint.

DONE and ENTERED this 11th day of January 1988, in Tallahassee, Florida.

WILLIAM J. KENDRICK

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 a Division of Administrative Hearings this 11th day of January 1988.

COPIES FURNISHED:

James H. Gillis, Esquire Division of Real Estate Legal Section

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

Brian M. Berman, Esquire SMITH & BERMAN, P.A.

2310 Hollywood Boulevard

Hollywood, Florida 33020

William O'Neil, Esquire General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32399-0750

Darlene F. Keller Acting Director Division of Real Estate

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

Docket for Case No: 87-002681

Orders for Case No: 87-002681