Loftus, Jr. seeks to revoke, suspend, or otherwise discipline the real estate broker's license of Norman N. Zipkin t/a Sun Up Realty. As grounds therefor it is alleged that after entering into a contract with the Leiningers for the sale and purchase of a residence in Miami, and accepting from purchasers an earnest money deposit of $1750, Defendant failed to return the earnest money deposit when the purchaser failed to qualify for the mortgage upon which the consummation of the sale was contingent. Three witnesses, one by deposition, were called by Plaintiff, Defendant testified in his own behalf, and eight exhibits were admitted into evidence. Five exhibits were attached to the deposition, two of which duplicated two of the eight exhibits.
In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings.
Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account.
The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts.
The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan.
The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above.
Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises.
Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence.
The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part:
"2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement."
"3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section
in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report.
"14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the
aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided."
"It is further agreed that in case of default
by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs;
or else the Seller may at his option retain
one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller."
Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller.
Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
CONCLUSIONS OF LAW
Section 475.25(1) F.S. provides in pertinent part that the registration of a registrant may be suspended for a period not to exceed two years upon a finding of facts showing that the registrant has:
"(c) Failed to account or deliver to any person, including registrants under this chapter, any personal property such as money, fund, deposit, check, draft, abstract of title, mortgage, conveyance, lease, or other document, or thing of value, including a share of a real estate commission or any secret or illegal profit, or any divisible share or portion thereof, which has come into his hands and which is not his property, or which he is not in law or equity entitled to retain, under the circumstances,
and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to
such accounting and delivery; ..."
By failing to deposit the additional $1700 required before closing the buyer breached the contract and the seller was therefore authorized to execute the remedies provided pursuant to said contract. Any verbal agreement of the parties purporting to vary the terms of this contract would be unenforceable under the statute of frauds (Chapter 725 F.S.).
The issue raised at the hearing regarding damages, or lack thereof, to the premises while occupied by the buyer pursuant to the rental agreement has no relevancy to these proceedings and will not be considered.
The terms of the contract provide that in the event the buyer breaches the contract the seller may sue for specific performance or retain one half of the deposit as consideration for the release of the buyer from all further obligations under the contract. While retaining all of the deposit the seller not only released the buyer of his obligations pursuant to the contract, but also retained monies due the buyer. In so doing Defendant violated the provisions of s475.25(1)(c) F.S. above quoted.
Although Defendant was the owner of the property and the realty office, when the deposit was placed in the escrow account of the realty office all transactions thereafter affecting deposit were subject to Defendant's duties as escrow agent and as a fiduciary. He was not acting as an individual but as a real estate broker and as such was required to conform to all of the provisions of Chapter 475 F.S. Self help by taking the escrow deposit to recover for alleged damage to his property by the buyer is not an available remedy. As a registered broker and as an attorney Defendant should have bean well aware of this fact.
From the foregoing it is concluded that the buyer breached the contract and therefore was not entitled to return of his $1750 deposit.
