STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA REAL ESTATE COMMISSION ) ex. rel. ORVILLE N. THOMAS )

)

Petitioner, )

)

vs. ) CASE NO. 75-2045

)

DAVID JOSEPH WATSON, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to ,notice, the Division of Administrative

Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on 27 January, 1976 a Lakeland, Florida.

APPEARANCES

For Petitioner: Richard J. R. Parkinson III, Esquire

2699 Lee Road

Winter Park, Florida 32789

For Respondent: R. Phillip Haddock, Esquire

601 East Lime Lakeland, Florida

By Administrative Complaint filed 5 November, 1975 the Florida Real Estate Commission ex. rel. Orville N. Thomas seeks to revoke or suspend, or otherwise discipline David Joseph Watson, holder of brokers license No. 0093592 on the allegation that he wrongfully refused to return the purchase money deposit to the buyer depositor in violation of 475.25(1)(c) and (d) Florida Statutes when the contract to purchase was not consummated. The Commission called six witnesses and Respondent and his wife testified on behalf of the Respondent.

FINDINGS OF FACT

1. By Receipt for Deposit Offer to Purchase and Contract for Sale dated April 26, 1971 Michael J. and Mary Martha Solomon deposited with David J. Watson, Respondent herein, a $5,000 earnest money deposit on a house and tract of land in Polk County. This receipt for deposit became a contract for sale when executed by the seller and contained two special clauses that were disputed at the hearing. The first is "This contract is subject to a change in county zoning. The change is from residential to rural conservation for the purpose of keeping horses." The second special clause which purportedly led to the rescission of the contract is "Seller to convey all pumps, air conditioners, and septic tank in good condition."

   
   

2. Michael Solomon (hereafter referred to as Solomon) apparently in response to an advertisement, entered Respondent's office to inquire about the

   property herein involved. Solomon was interested in purchasing the house which was advertised (Exhibit #6) provided he could buy additional land which he intended to develop as lakefront lots. His father, Dr. Solomon, expected to retire soon and move to Florida, and Solomon thought the house would be suitable for his parents who would provide a substantial part of the purchase money at the time of closing. Since his father raised Arabian horses as a hobby he wanted to be sure that he would be able to keep horses on the property.

   Respondent Watson, being a somewhat inexperienced broker, suggested the zoning change to rural conservation, and the special clause relating to zoning change was put in the contract.

   
   

3. Prior to executing the contract Solomon and his wife inspected the premises and, on one occasion prior to the week in which one day was set for closing, Dr. Solomon flew down from Pennsylvania to look over the property.

   
   

4. The testimony of the buyers and others involved in this transaction is in irreconcilable conflict with respect to the details leading to rescission of the contract by the buyers.

   
   

5. Well prior to the date set for closing Respondent, while Solomon was in his office, called the County Zoning Department to inquire about the zoning on the property involved in the contract. He then learned that the zoning of the property was R-1 (Residential) and that horses could be kept on the property for personal use so long as the stables for feeding and housing were located not less than 100-feet from the residence. This was communicated to the buyer and he accepted this explanation.

   
   

6. An official of the County Zoning Department confirmed at the hearing that the property was so zoned and that horses could be maintained on the premises for personal use. He also stated that an administrative determination could permit horses to be raised on the premises as a business venture; however, this issue was not raised at any time by any of the parties to the contract.

   
   

7. Although the buyers testified that they requested the Respondent (or his salesman) to obtain in writing from the county zoning officials confirmation that horses could be kept on the property, neither the broker nor the salesman recall any issue being made of the zoning provision prior to the rescission of the contract. In view of the fact that the sale price of the entire parcel would amount to some $250,000 resulting in a commission to the brokers office of approximately $20,000 it is not conceivable that he would have risked losing such a commission by failure to ask the zoning officials for written confirmation that horses could be kept on the property if the buyers had so requested.

   
   

8. Shortly before the day set for the closing Solomon's parents arrived and inspected the house. Apparently Mrs. Solomon was not satisfied with the house so Solomon requested a formal inspection the following day. Conditions found at this inspection rest in the eye of the beholder. The buyers all testified the house had been vandalized, paint was thrown in the garage, screens had been ripped off, windows broken, the basement was flooded, the sprinkler system and the air conditioner were inoperative. Others who visited the premises acknowledged that paint had been spilled on the concrete floor of the garage when a paint can had been turned over, but none had ever seen water in the basement, there was no evidence of vandalism, and all equipment was operable. Respondent produced a bill for repairs to the air conditioner, dated prior to the preclosing inspection, which showed charges only for installing new filters. Neither the Respondent nor anyone other than the buyers recall any

   complaint by the buyers during this inspection. They did recall that the elder Mrs. Solomon did not like the house. The salesman could not point out the location of the septic tank but there was no evidence that it was not functioning properly.

   
   

9. At a preclosing conference held in the office of the attorney representing both parties to this transaction the elder Solomons became quite upset regarding the cost of title insurance on the property and indicated then that they would not close as scheduled. Apparently there are only two law offices in Auburndale and one of the lawyers in Auburndale is one of the four sellers of the property. The buyers accepted the attorney in the other office as their attorney with knowledge that he was representing both parties.

   
   

10. The evening before the date set for closing Michael Solomon called Respondent Watson to tell him that his mother hated tide house and that he would be unable, to close. Watson advised him that he would forfeit his deposit if he didn't go through with the contract as the sellers were not the type to refund any of the deposit. Clause 11 of the contract provides that the seller may elect to retain the deposit as liquidated damages if he does not choose to sue for specific performance.

    
    

11. At the termite inspection conducted prior to closing, termite infestation was noted and treated at the expense of the seller. N indication was raised by any witness that this issue affected the of the contract.

    
    

12. After the date set for the closing had passed, Michael Solomon never requested return of his earnest money deposit from Respondent. Approximately one year later mesdames Solomon requested Respondent Watson to return the deposit and he advised them he was unable to do so.

    
    

13. Some six weeks after the July 15, 1971 closing date the attorney- seller demanded that Respondent disburse funds due sellers pursuant to Clause 11 of the contract and offered to file suit against ham unless he did so. Respondent contacted the attorney representing sellers and buyers in this transaction for legal advice regarding his responsibilities. He was advised to disburse the funds. He obtained authorization: from the sellers to pay for the air conditioner repairs and for some work done in the yard at the request of Solomon. By checks dated September 7, 1971 Respondent disbursed $502.45 to each of the four sellers. This represented their share of the deposit less expenses.

CONCLUSIONS OF LAW

From the foregoing it is concluded that the buyer was in default when he refused to go forward with the closing. Accordingly the contract was breached by the buyers and the broker was entitled and required, if sellers so demanded, to retain the earnest money d posit and disburse same in accordance with the provisions of the contract. It is therefore,

RECOMMENDED that the complaint be dismissed.

DONE and ENTERED this 17th day of February, 1976, in Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Richard J. R. Parkinson III, Esquire 2699 Lee Road

Winter Park, Florida 32789

R. Phillip Haddock, Esquire 601 E. Lime

Lakeland, Florida

Docket for Case No: 75-002045

Orders for Case No: 75-002045