STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS REGULATION, ) DIVISION OF FLORIDA LAND SALES, ) CONDOMINIUMS AND MOBILE HOMES, )

)

Petitioner, )

)

vs. ) CASE NO. 88-1372

)

T. CAYTON ENTERPRISES, INC. )

d/b/a FOUR OAKS VILLAGE, )

)

Respondent. )

)

RECOMMENDED ORDER

Final hearing in this proceeding was held on August 8, 1988, in Rockledge, Florida, before Mary Clark, Officer of the Division of Administrative Hearings.

The parties were represented as follows:

For Petitioner: Debra Roberts, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007

For Respondent: no appearance

(See explanation below) BACKGROUND AND PROCEDURAL MATTERS

Petitioner's Notice to Show Cause, dated October 27, 1988, alleges that Respondent entered into 12 rental agreements for mobile home lots between July 1, 1986, and July 8, 1987, without delivering to the new tenants a prospectus approved by the Division of Florida Land Sales, Condominiums and Mobile Homes, in violation of Section 723.011(1)(a), F.S. (1986 Supp.) and Rule 7D-31.01(13),

1. Each rental agreement is allegedly a separate violation.

   
   

   Thomas Cayton, sole officer and Director of T. Cayton Enterprises, Inc., did not appear at the hearing in person, or through an attorney or authorized representative. Bonita D. Cayton, Thomas Cayton's wife, did appear. She did not have written authority to appear on Respondent's behalf, nor, after inquiry on the record, was she found to have the knowledge of administrative proceedings or other legal qualifications for a "qualified representative", as provided in Rule 22I-6.008, F.A.C.

   
   

   Ms. Cayton provides clerical and office work for the mobile home park and was permitted to testify.

   
   

   In support of its case Petitioner presented the testimony of two witnesses and four exhibits.

   After hearing Petitioner submitted a proposed recommended order. Its proposed findings of fact have been substantially incorporated in this recommended order. The dates in proposed findings #5-#8 are inaccurate and have been corrected to conform to the evidence.

   
   

   ISSUES

   
   

   The issue for determination is whether Respondent committed the violations as alleged and, if so, what civil penalty is appropriate.

   
   

   FINDINGS OF FACT

   
   

   1. Respondent, T. Cayton Enterprises, Inc. is the owner and operator of Four Oaks Mobile Home Village, a mobile home park located in Titusville, Brevard County, Florida.

      
      

   2. On or around June 27, 1986, Thomas Cayton, as President of T. Cayton Enterprises, Inc. filed a prospectus for the park with Petitioner, Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes. The filing statement provided that 49 lots would be offered for rent, and that none of the lots were occupied. The $10.00 per lot filing fee ($490.00) was paid.

      
      

   3. The filing was rejected as the form was deficient. Between the end of June 1986, and August 26, 1987, the date of the approval letter, eight versions of the prospectus were filed by the park owner and were reviewed by staff of the division. After each review, the owner was sent a letter outlining the deficiencies. At one point, sometime around June 1987, Mr. and Mrs. Cayton travelled to Tallahassee to meet with Selena Einwechter, the Supervisor of the Examination Section in the agency's Bureau of Mobile Homes. The prospectus submittals and correspondence to and from the Bureau comprise 425 pages.

      
      

   4. Between the filing of the first version of the prospectus and the final approval, approximately 14 months later, twelve lots were rented at Four Oaks Mobile Home Village. The lot numbers and dates of the rentals are:

      
      

      Lot #3 August 1, 1986

      Lot #2 August 2, 1986

      Lot #44 August 15, 1986

      Lot #46 August 30, 1986

      Lot #12 November 1, 1986

      Lot #4 November 30, 1986

      Lot #19 January 15, 1987

      Lot #7 March 9, 1987

      Lot #6 June 1, 1987

      Lot #15 June 1, 1987

      Lot #5 June 6, 1987

      Lot #9 June 30, 1987

      
      

   5. Six of the recitals are evidenced by written leases; the remainder were oral agreements, reflected in the office records of the park. All of the tenants commenced paying rent upon occupancy of the lot and no one was told that the leases were unenforceable.

      
      

   6. At the beginning of the process, on July 29, 1986, Thomas Cayton was sent a letter from the Bureau of Mobile Homes confirming that his prospectus

      filing had been received and was being examined. The bottom of the letter includes this statement, clearly displayed:

      
      

      NOTE: Section 723.011, Florida Statutes, and Rule 7D-31.01, Florida Administrative Code, requires the delivery of a prospectus which has been deemed adequate by the Division prior to entering into enforceable rental agreements or renewal of existing rental agreements. Renewals of existing rental agreements or entering into new rental agreements without delivery of a prospectus which has been deemed adequate will constitute a violation of the Florida Mobile Home Act.

      (Petitioner's Exhibit #1, composite) CONCLUSIONS OF LAW

   7. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding pursuant to Section 120.57(1), Florida Statutes.

      
      

   8. Subsection 723.005(d)1., F.S. authorizes the Division of Florida Land Sales, Condominiums and Mobile Homes to impose a civil penalty not to exceed five thousand dollars ($5,000) against a mobile home park owner for each separate violation of Chapter 723, F.S. or regulation promulgated pursuant thereto.

      
      

   9. The statute and rule allegedly violated by Respondent provides as follows:

      
      

      723.011 Disclosure prior to rental of a mobile home lot; prospectus, filing, approval.--

      (1)(a) In a mobile home park containing 26 or more lots, the park owner shall file a prospectus with the diversion. Prior to

      entering into an enforceable rental agreement for a mobile home lot, the park owner shall deliver to the home owner a prospectus approved by the division. This subsection shall not be construed to invalidate those lot rental agreements for which an approved prospectus was required to be delivered and which was delivered on or before July 1, 1986, if the mobile home park owner had:

      1. Filed a prospectus with the division prior to entering into the lot rental agreement;

      2. Made a good faith effort to correct deficiencies cited by the division by responding within the time limit set by the division, if one was set; and

      3. Delivered the approved prospectus to the mobile home owner within 45 days of approval by the division.

      This paragraph shall not preclude the finding that a lot rental agreement is invalid on other grounds and shall not be construed to limit any rights of a mobile home-owner from seeking any remedies allowed by this chapter, including a determination that the lot rental agreement or any part thereof is unreasonable or unconscionable.

      (emphasis added)

      * * *

      7D-31.001 Prospectus and Rental Agreement.

      * * *

      (13) The park owner shall deliver the prospectus to existing tenants prior to the renewal of their rental agreements or prior to entering into a new rental agreement. Once a tenant has been given a prospectus, the park owner shall not be required to provide another prospectus but shall provide amendments, as described in Rule 7D-30.004 and this rule.

      
      

   10. Because Four Oaks' prospectus was not approved until the end of August 1987, the 12 rental agreements entered between August 1, 1986 and June 30, 1987, violated the above provisions.

       
       

   11. Respondent claims that he thought that as long as the prospectus had been filed, he could enter into rental agreements.

       
       

       This would have been true under the original version of the Florida Mobile Home Act, passed by the Legislature in 1984. The relevant provision of that act is found in Section 720.302(1), F.S. (1984) as follows:

       
       

       Every mobile home park owner of a park which contains 26 or more lots shall file a prospectus or offering circular with the division prior to entering into an enforceable rental agreement.

       Chapter 84-80, Laws of Florida, Part III)

       
       

       This section took effect on January 1, 1985, for parks with more than 100 lots, and on July 1, 1985 for parks with less than 100 lots. (Chapter 84-80, Laws of Florida)

       
       

       The current version, reflected in Section 723.011, F.S., cited above, took effect on July 1, 1986. (Chapter 86-162, Laws of Florida)

       
       

       Respondent cannot avail himself of the "grand-father" provision of Section 723.011, since his rental agreements and prospectus approval occurred after July 1st.

       
       

       Further, the explicit language of the note on the July 29, 1986, letter should have put him on notice of the new requirements of the law.

       
       

   12. There are no guidelines for the imposition of a penalty, other than the $5,000.00 maximum per violation found in Section 723.006(5)(d)1. F.S.

No evidence was presented as to prior violations by this Respondent. The extensive file evidences a good faith attempt to comply with a law that was still relatively new.

RECOMMENDATION

Based on the foregoing, it is, hereby RECOMMENDED:

That Respondent be found guilty of violation of Section 723.011(1)(a), F.S. (1986), as charged, and that a civil penalty of $100.00 per violation be imposed, for a total of $1,200.00.

DONE and RECOMMENDED this 13th day of September, 1988, in Tallahassee, Florida.

MARY CLARK

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 13th day of September, 1988.

COPIES FURNISHED:

Richard Coates, Director Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Thomas Cayton, Registered Agent 2475 Cheney Highway

Titusville, Florida 3270

Debra Roberts, Esquire Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Van B. Poole, Secretary Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Thomas A. Bell, Esquire Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Docket for Case No: 88-001372

Orders for Case No: 88-001372