STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL ) REGULATION, DIVISION OF REAL ESTATE, )
)
Petitioner, )
)
vs. ) CASE NO. 91-8273
)
RICHARD CHARLES WEIT and ) R C PROPERTIES INTERNATIONAL, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on March 25, 1992, in Miami, Florida.
APPEARANCES
For Petitioner: Theodore Gay, Esquire
Department of Professional Regulation
401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128
For Respondents: Richard C. Weit, pro se
775 Northeast 79th Street, Suite B Miami, Florida 33138-4743
STATEMENT OF THE ISSUE
The issue presented is whether Respondents are guilty of the allegations contained in the Administrative Complaint filed by Petitioner against them, and, if so, what disciplinary action should be taken, if any.
PRELIMINARY STATEMENT
Petitioner filed an Administrative Complaint charging Respondents with violations of the statutes regulating the conduct of real estate brokers, and Respondents timely requested a formal
hearing regarding the allegations contained within that Administrative Complaint. This cause was thereafter transferred to the Division of Administrative Hearings for the conduct of that formal proceeding.
Petitioner presented the testimony of Jose Martinez, Jorge Garcia, Justo Gomez, Maurice Majszak, and James Williams.
Respondent Weit testified on behalf of the Respondents and presented the testimony of Jesse Deveras. Additionally, Petitioner's Exhibits numbered 1-8 and Respondents' Exhibits numbered 1-5 were admitted in evidence.
Petitioner submitted post-hearing proposed findings of fact in the form of a proposed recommended order. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order. Respondents filed a post-hearing submittal which contains no proposed findings of fact but is, rather, in the nature of closing argument.
FINDINGS OF FACT
At all times material hereto, Respondent Richard Charles Weit has been a real estate broker licensed in the state of Florida, having been issued license numbered 0094418, and Respondent R C Properties International, Inc., has been a real estate broker licensed in the state of Florida, having been issued license numbered 0195105. At all times material hereto, Respondent Weit has been licensed and operating as a qualifying officer and broker of Respondent R C Properties.
Jose Martinez met Respondent Weit in approximately 1986 as a result of a newspaper ad which had been placed by Weit. Weit personally owned a number of properties. At the time, Martinez was a construction worker, looking for real estate considered to be a "handyman special." Martinez wanted to buy property which was in need of repair so that he could make the repairs and then sell the property at a profit.
Martinez purchased from Respondent Weit three such properties owned by Weit during 1986 and one during 1987. He bought them, repaired them, and sold them at a profit. On several occasions, Respondent Weit sold those properties for Martinez after Martinez had executed the necessary repairs. On all occasions, Respondent Weit sold those properties to Martinez for very small down payments since they both understood that Martinez needed his available cash to make the necessary repairs in order to be able to sell them at a profit.
Respondent Weit was not acting as a real estate broker in any of those transactions or in the transaction involved in this proceeding. The properties which he sold to Martinez were owned by Weit. As the business relationship developed between Martinez and Weit, both men developed a trust for each other and worked together somewhat informally in that business relationship which resulted in a profit for both of them.
By 1989 Martinez had gone into business with a partner, Jesse Deveras. As a licensed general contractor, Deveras was able to "pull permits" for the repairs which Martinez needed to make to the "handyman specials."
In early 1989, Martinez and Deveras talked with Respondent Weit about purchasing an apartment building that Weit owned at 227 Northeast 26th Street, Miami, Florida. The apartment building was a three-story CBS structure containing 18 units. At the time, Martinez and Deveras were interested in purchasing that apartment building and another building located on the next street. Respondent Weit set the sale price for the apartment building at $190,000 and drafted a contract to that effect. Martinez and Deveras did not wish to pay that much for that building, and the contract was never executed. Martinez and Deveras thoroughly inspected that building at that time and fully understood that the building was in need of repair.
Around that time, Respondent Weit received a letter from the Department of Housing and Urban Development of Metropolitan Dade County, Florida, notifying him that the apartment building was in need of repairs and was in violation of certain minimum housing standards. That letter gave Respondent Weit 60 days in which to remedy the violations. The violations were all clearly visible and involved such things as repairing windows and screens, replacing deteriorated door jambs and baseboards, replacing broken electrical switch cover plates, and repairing the damage from some "apparent water seepage." Respondent Weit showed Martinez and Deveras that letter.
On November 13, 1989, Jorge Garcia, a police officer for the City of Miami Police Department, was dispatched to Respondent Weit's apartment building to check for "criminal elements." While there, he noticed a strong smell of gas. He notified the Fire Department, which responded to his call with fire engines and a fire inspector. The Fire Department subsequently summoned an inspector from the City of Miami Code Enforcement Section. A determination was made that there was a gas leak in the building.
Accordingly, the remaining tenants were evacuated, and all utility service to the building was terminated.
Officer Garcia obtained from a family living there the name and telephone number of Respondent Weit as the person in charge of collecting rent. He contacted Respondent Weit and spoke with him personally no later than the following day. He advised Weit that the building was going to be condemned, that the tenants needed to be relocated, and that the building was to be boarded up to prevent entry. Since the tenants had just made a rent payment, Officer Garcia told Respondent Weit that he should refund the rent payment so the tenants could move elsewhere.
Respondent Weit went to the police station on Biscayne Boulevard where Officer Garcia worked and left the rent money he had collected so that it could be returned to the tenants. On November 14, when City of Miami officials returned to the apartment building, they discovered that Respondent had complied with their instructions. The doors and windows of the apartment building were locked and boarded up to prevent entry. Further, the iron gate at the front door was padlocked and chained.
Maurice Majszak was the City of Miami fire inspector who responded to the property on November 13, 1989. During his inspection he found violations of the South Florida Building Code and the National Fire Protection Agency life/safety handbook, which the City of Miami was authorized to enforce. He returned to his office and drafted a letter to Respondent Weit on that same day, describing the violations which he had found and ordering Respondent Weit to correct those violations within 45 days. That violation letter was attached to a transmittal letter dated November 14, 1989.
Respondent Weit had continuing problems with receiving his mail at the address of R C Properties. Accordingly, he had made arrangements with fire inspector Maurice Majszak so that whenever the City of Miami Fire Department needed to contact Respondent regarding any of the properties owned by him, rather than mailing notices to Respondent, Inspector Majszak would hand- deliver notices to Respondent after 2:00 p.m. That arrangement had worked well over the years, and Respondent Weit had always signed for any notices which the fire department hand-delivered to him.
On November 14, 1989, Inspector Majszak attempted to hand deliver the two fire department letters to Respondent Weit-- the November 13 violation letter and the November 14 transmittal
letter. Since he was unable to do so because Respondent Weit was not there, Inspector Majszak subsequently sent the letters to Respondent Weit by certified mail, but he failed to receive them.
Pursuant to his inspection, the inspector from the Code Enforcement Section of the Building and Zoning Department of the City of Miami directed a letter to Respondent Weit dated November 22, 1989, advising him that the apartment building needed to be repaired or demolished. That letter was sent to Respondent Weit by regular mail but was not received by him.
On December 9 or 10, 1989, Martinez and Deveras approached Respondent Weit about purchasing the apartment building. They advised Respondent Weit that they had again inspected the building approximately a week earlier. Since the apartment building was now vacant (not producing rental income) and due to the nature of the repairs needed, Respondent Weit agreed to reduce the purchase price by $40,000.
On December 11, 1989, Martinez and Deveras entered into a contract with Respondent Weit whereby they agreed to purchase the apartment building from him. The new purchase price was
$153,000, for which Martinez and Deveras put up a deposit of only
$500. The contract recited that although Respondent Weit was a registered real estate broker, he was selling the property on his own account, that no commission would be paid by the purchasers, and that the property was being sold "as is." The contract further provided that the buyers would pay $8,500 in cash at the time of closing, of which the $500 deposit would be a part. Under the contract, Respondent Weit would take back a purchase money wrap-around mortgage. The contract specifically provided that the purchasers were taking title to the building on that same day although the closing would take place at a later date. It further provided that although interest on the mortgage would begin running from that same day, no mortgage payment would be due until
75 days later. Taxes, rent, and other revenue and expenses were to be prorated as of December 11, 1989, the date of the contract. The contract also specifically recited that the apartment building being purchased was vacant.
It was understood by Respondent Weit, by Martinez, and by Deveras that Weit was requiring only a small down payment because Martinez and Deveras needed to have their cash available to effectuate repairs to the building in order to rent it and then sell it at a profit. Further, all three understood that the repairs needed to commence quickly so that the building could be rented. Although the three men considered Martinez and Deveras to
be the "official owners" of the building as of December 11, 1989, the date they signed the contract for the purchase and sale of the building, they knew Martinez and Deveras would not be owners of record until the closing took place.
They also understood that there might be some problem with the City of Miami insofar as Deveras "pulling permits" to begin the repair work prior to Deveras and Martinez becoming the owners of record. Accordingly, at the request of Martinez and Deveras, Respondent on December 11, 1989, executed an affidavit that he had just sold the property to Martinez and Deveras. The three men reasoned that the affidavit would be sufficient to allow Deveras to begin "pulling permits."
The closing was scheduled for January 12, 1990. Martinez requested that Respondent Weit's attorney prepare all of the closing documents so that Martinez could avoid incurring additional expenses relative to acquiring title to the property. No title examination was performed by Martinez or Deveras or by anyone on their behalf, and they did not require one. Prior to the closing date, Martinez again approached Respondent Weit and explained that he could not pay the cash at closing because he needed to utilize all of his money for the necessary repairs. Respondent Weit agreed that Martinez and Deveras would pay him no cash at closing and that Martinez would give him a mortgage on a different property owned by Martinez instead.
The closing did take place on January 12, 1990, using a closing statement computed as of December 11, 1989. Rather than receiving cash at closing, Respondent Weit received a mortgage in the amount of $8,500 on the other piece of property owned by Martinez. Accordingly, on January 12, 1990, Martinez and Deveras became owners of record of an 18-unit apartment building for a total expenditure of approximately $500 in closing costs.
Thereafter, Martinez and Deveras went to the City of Miami to "pull permits" to begin the repair work. At that time, City of Miami officials showed Deveras and Martinez copies of the November letters which had been mailed to Respondent Weit. Respondent Weit had never told Martinez or Deveras about those November letters since he had not known about them.
Deveras and Martinez never made any repairs to the apartment building. Further, they never made any mortgage payments to Respondent Weit pursuant to either the mortgage on the apartment building or the mortgage on the other property owned by
Martinez which had been used to substitute for the cash owed to Respondent at closing pursuant to the purchase and sale contract.
Instead, on April 23, 1990, Martinez and Deveras entered into a contract to sell the apartment building to Miguel Santiago for $165,000. That contract recited that the property was being sold "as is." The only specific disclosure regarding the condition of the building contained in that contract is as follows: "Buyer acknowledges that there exists code violations on the property which he agrees to correct at his own expense." The contract further required the buyer to begin repair work on the property within two weeks of closing.
Respondent Weit agreed to the transfer of the mortgage and approved of the sale to Santiago. In approximately November of 1990 he voluntarily appeared before the Unsafe Structures Board of Metropolitan Dade County, Florida, to assist the subsequent owners of the apartment building to show cause why the building should not be demolished. Eventually, the City of Miami entered into a contract for the demolition of the building. The building was demolished in September of 1991.
By 1990, Martinez had become licensed as a real estate salesman in the state of Florida. Since then, he has been employed part time as a real estate salesman working out of his own home. Respondent Weit eventually filed suit against Martinez and Deveras due to their nonpayment under the mortgages.
In June of 1991 Martinez and Deveras filed a complaint with the Department of Professional Regulation alleging that Respondent Weit had sold them a building without them knowing its condition. That complaint resulted in the Administrative Complaint filed in this cause.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.
The Administrative Complaint in this cause contains two counts. Count I alleges that Respondent Weit is guilty of misrepresentation, concealment, culpable negligence, or breach of trust in a business transaction, in violation of Section 475.25(1)(b), Florida Statutes. Count II alleges the same as to Respondent R C Properties. Petitioner has failed to meet its burden of proof in this proceeding.
Petitioner argues that Respondent Weit had a duty to disclose to Martinez and Deveras facts materially affecting the value of the apartment building which were not readily observable and which were not known to the buyer. The testimony of Martinez that he did know the condition of the building at the time that he contracted to purchase it is incredible and is not strongly supported by his partner, Deveras. Their testimony that they inspected the building one week before December 11, 1989, and found tenants living there and did not know that any of the utilities had been cut off is contradicted by the consistent testimony of the other witnesses who testified on behalf of Petitioner. It is clear that as of November 13, 1989, no one was living in that building, all utilities had been terminated, the building was sealed and secured, the windows were boarded up, the front door was locked, and the iron gate was chained and padlocked. Further, Martinez' testimony that the necessary repairs were not discussed in the contract negotiations defies common sense. It is clear from the contract that the parties anticipated Martinez and Deveras entering the building immediately to begin repairs prior to closing. Further, there was some reason why the contract was re-negotiated so that Martinez and Deveras would pay no cash down in order to become owners of a 18-unit apartment building.
The overall evidence is that Respondent Weit acted in good faith in his dealings with Martinez and Deveras. His testimony that they discussed the repairs is supported by Martinez' own testimony during the final hearing that he knew exactly what he was buying. Further, Respondent Weit's testimony that he did not receive the letters in question is supported by the testimony of the fire inspector who had, at a earlier time, agreed to hand-deliver letters to Respondent due to Respondent's problems with receiving his mail.
The only allegation made by Petitioner as to the misconduct engaged in by Respondent R C Properties is that the
$500 deposit paid by Martinez and Deveras on December 11, 1989, was placed in the R C Properties escrow account. Petitioner reasons, therefore, in its proposed recommended order, that Respondent R C Properties "is thereby implicated as a participant in Respondent Weit's misconduct . . ." Implications are rarely sufficient to constitute the competent, substantial evidence required before Petitioner can take disciplinary action against a licensee. Accordingly, Petitioner has failed to prove that either Respondent Weit or Respondent R C Properties is guilty of misrepresentation, concealment, culpable negligence, or breach of
trust in a business transaction as alleged in Counts I and II of the Administrative Complaint filed in this cause.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered finding Respondents Richard Charles Weit and R C Properties International, Inc., not guilty and dismissing the Administrative Complaint filed against them in this cause.
RECOMMENDED this 11th day of June, 1992, at Tallahassee, Florida.
LINDA M. RIGOT
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675 SC 278-9675
Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1992.
COPIES FURNISHED:
Theodore Gay, Esquire
Department of Professional Regulation
401 Northwest 2nd Avenue, Suite N-607 Miami, Florida 33128
Mr. Richard C. Weit
775 Northeast 79th Street, Suite B Miami, Florida 33138-4743
R C Properties International, Inc. 775 Northeast 79th Street, Suite B Miami, Florida 33138-4743
Darlene F. Keller, Division Director Division of Real Estate
Post Office Box 1900 Orlando, Florida 32802-1900
Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street
Tallahassee, Florida 32399
APPENDIX
Petitioner's proposed findings of fact numbered 1-11 have been adopted either verbatim or in substance in this Recommended Order.
Petitioner's proposed finding of fact numbered 12 has been rejected as not being supported by any competent evidence in this cause.
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.
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AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION
DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE
Petitioner,
vs. CASE NOS. 9182729 9184008
DOAH CASE NOS. 91-8273
RICHARD CHARLES WEIT and R C PROPERTIES INTERNATIONAL, INC.,
Respondents.
/
FINAL ORDER
On August 18, 1992, the Florida Real Estate Commission heard this case upon a Stipulation. After considering this Stipulation and being fully advised in the premises, the Commission ORDERS that the agreement be accepted. A copy of this Stipulation is attached hereto as Exhibit A and made a part hereof.
DONE AND ORDERED this 18th day of August 1992 in Orlando, Florida.
Darlene F. Keller, Director Division of Real Estate
I HEREBY CERTIFY that a true copy of the foregoing was sent by U.S. Mail to: Richard C. Weit, 775 Northeast 79th Street, Suite E, Miami, Florida 33138-4743; to the Division of Administrative Hearings, 1230 Apalachee Parkway, Tallahassee, Florida 32399-1550; to Theodore Gay, Esquire, DPR, Rhode Bldg. Phase II, 401 Northwest
2nd Ave., Suite 607, Miami, Florida 33128; and to Frederick Wilsen, Esquire DPR P.O. Box 1900, Orlando, Florida 3280) this 2nd day of September, 1992.
EXHIBIT A TO AGENCY FINAL ORDER
STATE OF FLORIDA
DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION
FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE,
Petitioner,
vs FDPR CASE NOS. 9182729
9184008
RICHARD CHARLES WEIT and
R C PROPERTIES INTERNATIONAL, INC.
Respondents.
/
STIPULATION
Respondents, and the Petitioner, Florida Department of Professional Regulation, Division of Real Estate, hereby stipulate and agree to the issuance of a Final Order by the Florida Real Estate Commission (hereafter, the "Commission") adopting and incorporating the provisions of this Stipulation in reference to the above styled case.
STIPULATED FACTS AND CONCLUSIONS OF LAW
Respondent Richard Charles Weit is now and was at all times pertinent herein a licensed real estate broker in the State of Florida having been issued license number 0094418. The last license issued was as a broker, c/o R C Properties International, Inc., 775 N.E. 79th Street, Suite B, Miami, Florida 33138-4743.
The Respondent R C Properties International, Inc. is now and was at all times material hereto a corporation registered as a real estate broker in the State of Florida having been issued license number 0195105. The last license issued was at the address of 775 N.E. 79th Street, Suite B, Miami, Florida 33138- 4743.
At all times material hereto, the Respondent Richard Charles Weit was licensed and operating as a qualifying broker and officer of Respondent R C Properties International, Inc.
Respondents being licensed real estate brokers, admit they are subject to the provisions of Chapter 455 and 475, Florida Statutes, and therefore subject to the jurisdiction of the Department and the Commission.
Respondents admit that they have been served with the Administrative Complaint, copy attached, which charges the Respondents with having violated certain provisions of Chapter 475, Florida Statutes.
Respondents deny all of the matters contained in the Administrative Complaint.
Respondents, while denying all of the matters contained in the Administrative Complaint, admit that if the alleged facts contained in the Administrative Complaint were true, they would support a finding of a violation of the Real Estate Practice Act.
On March 25, 1992, at the Respondents' request, a formal hearing in this case was held before a Hearing Officer appointed by the Division of Administrative Hearings. On June 11, 1992, the Hearing Officer issued a Recommended Order recommending that a Final Order be entered finding the Respondents not guilty and dismissing the Administrative Complaint. The Petitioner does not propose to file exceptions to the Recommended Order.
STIPULATED DISPOSITION
The Commission shall enter a Final Order finding the Respondents not guilty and dismissing the Administrative Complaint.
It is expressly understood that this Stipulation is subject to the approval of the Department and of the Commission,
and this Stipulation has no force and effect until a Final Order has been issued and filed.
This Stipulation is executed by the Petitioner and the Respondents for the purpose of avoiding further administrative action with respect to this cause and specifically to relieve the Department and the Commission of the necessity of copying and reviewing all documents which would otherwise be needed in order to review the complete record as defined by Section 120.57(1)(b)6., Florida Statutes. In this regard, the Respondents authorize the Commission to review as much or as little of the record and the investigative file materials concerning the Respondents as in its sole discretion it deems necessary or appropriate, prior to, or in conjunction with, the consideration of this Stipulation. Furthermore, should this Stipulation not be approved by the Commission, it is agreed that presentation to, and consideration of this Stipulation and other documents and matters by, the Commission shall not unfairly or unlawfully prejudice the Department, the Commission or any of its members from further participation, consideration or resolution of these proceedings.
Respondents and the Department fully understand that this Stipulation and resulting Final Order adopting and incorporating the provisions of this Stipulation shall in no way preclude any other disciplinary proceedings by the Department or the Commission against the Respondents for acts or omissions not specifically set forth in the attached Administrative Complaint.
The Respondents expressly waive all notice requirements and right to seek judicial review of or to otherwise challenge or contest the validity and enforcement of this Stipulation and resulting Final Order of the Commission adopting and incorporating this Stipulation.
All parties to this Stipulation shall bear their own attorneys' fees and costs.
SIGNED this 24th day of 1991.
Richard Charles Weit, Respondent and broker of R C Properties International, Inc., Respondent
BEFORE ME personally appeared Richard C. Weit whose identity is known to me by .
Sworn and subscribed by the Respondent before me this 13th day of July, 1992.
Notary Public
Theodore R. Gay, Senior Attorney Dept. of Professional Regulation
401 N.W. 2nd Avenue, Suite N-607 Miami, Florida 33128
(305) 377-7115
Approved this day of , George Stuart, Secretary 1992. Florida Department of
(undated) Professional Regulation By: Frederick H. Wilsen Chief Staff Attorney
| Issue Date | Proceedings |
|---|---|
| Sep. 18, 1992 | Final Order filed. |
| Jun. 11, 1992 | Recommended Order sent out. CASE CLOSED. Hearing held 3-25-92. |
| May 07, 1992 | Petitioner`s Proposed Recommended Order filed. |
| Apr. 17, 1992 | Transcript of Proceedings filed. |
| Apr. 17, 1992 | Letter to LMR from R. Weit (re: statement of facts) filed. |
| Apr. 01, 1992 | CC: Exhibits from Hearing & Cover Letter to LMR from T. Gay filed. |
| Mar. 25, 1992 | CASE STATUS: Hearing Held. |
| Feb. 04, 1992 | (Petitioner) Notice of Substitute Counsel filed. |
| Jan. 23, 1992 | Notice of Hearing sent out. (hearing set for March 25, 1992; 1:30pm;Miami). |
| Jan. 08, 1992 | (Petitioner) Response to Initial Order filed. |
| Dec. 31, 1991 | Initial Order issued. |
| Dec. 23, 1991 | Agency referral letter; Administrative Complaint; Election of Rights filed. |
| Issue Date | Document | Summary |
|---|---|---|
| Aug. 18, 1992 | Agency Final Order | |
| Jun. 11, 1992 | Recommended Order | Brokers not guilty of misrepresentation, concealment, culpable negligence or breach of trust in a business transaction. |
DIVISION OF HOTELS AND RESTAURANTS vs. ROBERT J. GROVER, TRUSTEE, 91-008273 (1991)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. LEONARDO SANCHEZ, 91-008273 (1991)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. DONALD W. NETTLES, 91-008273 (1991)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. NORMAN BROUSSEAU, 91-008273 (1991)
CONSTRUCTION INDUSTRY LICENSING BOARD vs. EUGENE AMRHEIN, 91-008273 (1991)
