that in April, 1979, Respondent placed a sales listing with his employer on residential property located in Coconut Grove, Florida; that although the listing stated that the house was completely rebuilt in 1977-78, had a new roof and was entirely fenced for privacy, these representations were untrue; and by reason of the foregoing, Respondent is guilty of violating Subsection 475.25(1)(b), supra; and (2) that in May, 1979, when
showing the property to a prospective purchaser Respondent intentionally failed to disclose that the roof was not new and that the house was not completely rebuilt; that Respondent later induced the buyer to agree to quit-claim the property on which a property line fence stood to the adjoining property owner without telling the buyer that the grantee could then remove the fence at anytime; and by reason of the foregoing Respondent is guilty of violating Subsection 475.25(1)(b), supra.
Respondent disputed the above allegations and requested a formal hearing pursuant to Subsection 120.57(1), Florida Statutes. The matter was transmitted to the Division of Administrative Hearings by Petitioner on September 24, 1981, with a request that a Hearing Officer be assigned to conduct a hearing.
By Notice of Hearing dated November 16, 1981, the final hearing was scheduled for January 25, 1982, in Miami, Florida. At the outset of the hearing Respondent made an ore tenus motion for continuance on the ground his attorney had a conflict and
could not be present. After considering argument of the parties, the rtotion was determined to be without merit and was denied.
At the final hearing Petitioner presented the t stimony of Anthony Cooper, Lonnie Cooper, Fredrico Jaca, Shirley Deitz and John F. Phillips and offered Petitioner's Exhibits 1-16, each of which was received into evidence. Respondent testified on his own behalf and presented the testimony of Raymond W. Romeo and offered Respondent's Exhibits 1-3, each of which was received into evidence.
The transcript of hearing was filed on February 10, 1982. Proposed findings of fact and conclusions of law were filed by Petitioner on February 15, 1982, and have been considered by the undersigned in the preparation of this order. Findings of fact not included in this order were considered irrelevant, not supported by competent and substantial evidence or immaterial to the results reached.
The issue herein is whether Respondent's real estate salesman license should be suspended or revoked, or whether other disciplinary action should be taken for the alleged violations set forth in the Administrative Complaint.
At all times material hereto, Respondent, Dean R. Stewart, held real estate license number 0172552 issued by Petitioner, Department of Professional Regulation, Board of Real Estate. He was employed as a salesman for Don Capin, Inc. a real estate firm located at 3001 Salzedo Street, Coral Gables, Florida.
In March, 1977, Respondent and one Raymond W. Romeo purchased a parcel of property located at 1720 Wa-Kee-Na, Coconut Grove, Florida, for approximately $65,000. The parcel consisted of a large two-story house built in 1930 and an adjoining vacant lot. The vacant lot was later sold by Stewart and Romeo to a builder who wished to construct a new home. Respondent began a substantial restoration of the older house shortly after the parcel was purchased and eventually spent approximately $100,000 in modernizing and repairing the house. The entire first floor was torn out and replaced with new walls, windows, bathrooms, kitchen and electrical wiring. The house was repainted inside and out, recarpeted and landscaped. A swimming pool was installed in the back yard. The studs and plates on the second floor were also replaced and the bathrooms and kitchen modernized. An associate of Don Capin, Inc. described the list of things done to the house as incomprehensibly large".
In March, 1979, Respondent contracted with Cooper Roofing, Inc. to "reroof" the house. According to the terms of their agreement dated March 12, 1979, Cooper was to perform the following work:
Remove roof to sheating and hauling all trash away replacing rotten lumber where needed, using 30 lbs. felt in cap 12 on 12.
Gravel stop around edges nail every 8" mopping on 2-15 with hot asphalt strip out with 1, 6" and 1, 9" 15 lbs felt flood coat and gravel, on top part only.
On tile remove roof to locations of leaks re- pairing and relaying tiles back. gravel roof carries four (4) year guarantee.
This roof is water tight with no evidence of leaks at this time.
Price $1,400
/s/ Lonnie Cooper
The main portion of the roof consisted of a large flat gravel area with parapets; the remaining area was made up of several smaller roofs, one covered with barrel tile and the other two with gravel. The two small gravel roofs were on the lower deck where the entrance to the house is located. Cooper reroofed the main gravel area and replaced missing tile on the small tile roof. However, notwithstanding the contract, he did not check the three smaller roofs for leaks. After the job was completed, he certified that the roof was in "satisfactory condition with no evidence of leaks at the time of inspection. (Petitioner's Exhibit 14). When the work was performed, Stewart believed that approximately 80 percent of the entire roof was being replaced and that the work was guaranteed. Stewart later repainted the small tile roof to improve its appearance. At the hearing, representatives of Cooper Roofing, Inc. agreed with Stewart that the area replaced represented about 80 percent of the entire roof.
In April, 1979, Stewart and Romeo decided to sell their property. They listed the home with Respondents's employer, Don Capin, Inc., with an asking price of $275,000. The realtor accepted the listing knowing that the restoration project on the house was still underway, and was not yet completed. On April 18, 1979, Stewart gave the realtor an information sheet from which the firm prepared a brochure for inclusion in the Coral Gables Multiple Listing Service. The brochure described or stated the property's location, legal description, lot size, year built, improvements, taxes, price, terms, and procedure for inspection. It also included the following information:
First Floor consists of 2 Large Apts: 3 Bedrooms
2 Baths, Large Living Room, NEW KITCHEN. 2 Bedroom
1 Bath, Living Room, NEW KITCHEN. Baths on First Floor are NEW, NEW ROOF, NEW CARPETING.
NEW BLACK LAGOON POOL with Wood DECKING, Circular Drive, Entire Property is Walled In for Privacy Over 5000 Square Feet. (Petitioner's Exhibit 3)
The listing included a proviso that it was made subject to omissions, errors and prior sale without notice. After reviewing the brochure several weeks later, Stewart noted a number of errors. Thereafter, on May 14, 1979, be prepared a corrected listing. In it, he changed the year the house was built from 1928 to 1930, modified the lot size from 90' x 120' to 89' x 122' and advised that the purchaser must qualify for assumption of the mortgage and be subject to escalating interest rates. (Petitioner's Exhibit 5).
John F. Phillips, a salesman at Don Capin, Inc., received an inquiry concerning the property in May, 1979, from one Shirley Deitz, who had read an advertisement in the Miami Herald. Prior to this he had shown the house to only one other prospective buyer. Phillips took Dietz and her late husband to the property where they met Stewart. There Phillips accompanied Dietz and Stewart on an inspection of the house while Stewart explained the work done in the restoration project, including those areas that were not finished. During the inspection, Phillips and Dietz noted several items requiring repair. As is pertinent here, they included sagging and water-damaged ceilings in the living room, the upstairs hall, and above the kitchen sliding door. Stewart readily acknowledged that the ceilings had been damaged by a leaking roof, but advised the roof had been recently replaced. He also agreed to repair the sagging ceilings, and other items, prior to closing. Stewart claimed he told Dietz that only the parapet roof had been replaced; Dietz did not recall this, and Phillips was not privy to their conversation.
Although the brochure stated that the entire property was "[w]alled in for privacy", there was no fence or wall on its west side. At the time of inspection, the property was enclosed on three sides by a concrete wall in front, and wooden fences in the back and on the east side. The missing wall was obvious to all, and Stewart made no effort to conceal it. In fact he agreed to construct a fence in the missing area prior to closing which was acceptable to Dietz. Stewart told her he intended to construct a wooden fence rather than a wall so that it would be compatible with the fences on the other two sides of the house and decking on the rear. There was no objection by Dietz. When the fence was constructed, it lay slightly over the property line and on the adjoining neighbor's property. This was caused by a water pipe which lay under the property line and required the foundation and fence to be placed beyond Stewart's property.
Dietz executed a contract for sale and purchase on May 19, 1979. After an initial offer was rejected, the parties finally agreed upon a sales price of $225,000. The contract provided that:
[s]ellers shall give credit at closing (to) repair ceilings in living room and hall upstairs, repair
wall above sliding glass in upstairs kitchen, complete fence to west, property line, resurface driveway,
and paint steps and porch to upstairs apartment.
Prior to closing, Stewart repaired the ceilings, resurfaced the driveway, painted the steps and porch, and completed the fence as required by the contract.
On or about Augusta 15, 1979, a closing was held on the property. Both parties were represented by counsel. Just after the closing, Respondent orally advised Dietz that the newly constructed fence on the west side was actually six inches over the property line and lay on Lot 4, her neighbor's property. Earlier that day Stewart had given Dietz a letter that she had signed and which acknowledged this problem. (Petitioner's Exhibit 7). The letter explained that a conveyance of the fence to the neighbor was necessary in order "to avoid any dispute with the owner of lot 4." However, Dietz claims she did not understand what this meant. At the closing Stewart and Romeo also executed a quit-claim deed conveying a strip of land...and fence lying approximately two feet from the east boundary of Lot 4..." to George I. and Rebecca Pope Stoeckert, who owned the adjacent property. (Petitioner's Exhibit 6). The document was prepared upon the advice of both parties' counsel although Dietz claimed it was never shown to her.
Approximately one week after the closing a tropical storm swept through the Miami area and caused large amounts of rainfall. As a result, the ceiling in the house began to leak. Dietz complained to John Phillips, who told her that it should not leak because Stewart had recently had a new roof installed. Dietz attempted to contact Stewart but he was out of the State. She then called Cooper Roofing who, after a number of visits, ran a water test on her roof and found the lower deck to be leaking. This was the area that had not been replaced or repaired. Cooper advised her to get a roofing contractor to fix the leak. After finally contacting Stewart, he paid Andrews Roofing $900 to replace and repair a part of the barrel tile roof. The leaks continued and Dietz finally hired Fredrico Jaca, a roofing contractor, to inspect the roof. Jaca found the three smaller roofs needing repair and thereafter replaced "about two or three hundred feet of bad lumber" and about 500 square feet of tile. Dietz incurred the cost for making these repairs.
In early November, 1979, George Stoeckert told Dietz that the fence between their property was actually 2.4 feet over his property line. He showed her a copy of a property survey to verify this. Dietz claimed this was the first time she was aware of the problem. Stoeckert then removed the fence in January, 1980, for ten months while he built a swimming pool and landscaped his yard. When it was rebuilt, the new fence was compatible with his own fencing rather than the one torn down.
Stewart contended that neither the realtor or Dietz was misled. He stated he always advised that the house was rebuilt and that it had a new parapet roof, which covered approximately
75 percent to 80 percent of the roofing area. He believed the remainder had been patched and made watertight by Cooper Roofing, Inc. After learning of Dietz's dissatisfaction, he offered to re- purchase the house for what she had paid plus any moving expenses she had incurred; however, Dietz refused. Given the amount of money spent in remodeling the housed ($100,000), he considers the brochure representation that the house was "completely" rebuilt to be accurate. He further stated that he signed the quit-claim deed only after being advised to do so by both attorneys at the closing.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.
Subsection 475.25(1)(b), Florida Statutes, 1/
provides that the Department may take disciplinary action against a licensee if it finds that a licensee has:
(b) Been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device... or breach of trust in any business transaction in this State...
It is charged In Count I that Respondent made "false representations" in the information supplied to his broker for the real estate listing and that he "....was well aware that brokers or salesmen...would be guided by, and rely upon the representations made in the listing and that they would so in turn represent the same to their prospective purchasers." Count II alleges that Respondent failed "....to advise Dietz of the fact that the roof was not new and that the house was not completely rebuilt..." and that he failed "...to advise Dietz of the consequences of her execution of the Quit-Claim Deed..." For these acts Petitioner contends Respondent has violated Subsection 475.25(1)(b), supra, and recommends that his license be suspended for a period of three years. Each count will be dealt with separately.
A. Count I - The false representations allegedly made by Respondent revolve around three representations in the sales brochure: (1) the property was completely walled in, (2) the roof was "new", and (3) the house was "completely rebuilt".
Initially, it should be pointed out that the property was shown only to Dietz and one other person. There is no evidence that any other prospective buyers were shown the home. It must also be noted that the realtor understood that, when the listing was made, the property was still in the restoration stage, but would be completed prior to a sale.
The allegation that Stewart misled his broker by stating the property was completely walled in for privacy is without merit. Respondent construed a wall and fence to be the same since each afforded privacy to the owner. Moreover, there was no effort by Stewart to conceal the condition of the property, and a personal inspection of the home by the realtor and prospective purchaser readily disclosed this fact. All parties understood the restoration project was still underway. Stewart intended to finish the missing link of the fencing prior to a sale, and with the buyer's acquiescence, he did so. Accordingly, it is concluded there was no misrepresentation on the part of Stewart, and this portion of the charges should be dismissed.
The contention that the house was not "completely rebuilt" is unavailing The house was originally purchased by Stewart and Romeo for between sixty and seventy thousand dollars. In 1977 and 1978 Respondent spent $100,000 in rebuilding the structure. Even a representative of the listing broker described the list of items rebuilt or remodeled as "incomprehensibly large". The evidence supports a conclusion that the representation was correct, and that the charge should be dismissed.
The final charge centers around the representation by Respondent that the house had a "new roof". The evidence discloses that Stewart spent approximately $1400 to replace the parapet roof, which constituted 80 percent of the entire roof. Additionally, his contract with the roofer called for the "repairing and relaying" of tiles on the smaller tile roof at "locations of leaks". When the job was completed, Stewart was advised by his roofer that there was no evidence of leaks at the time of inspection". To substantiate a charge of misrepresentation, the Department must prove that at the time the listing was made, Stewart knew the roof was in need of repair, or had bad lumber, or tiles that leaked. It has failed to do so, for Stewart believed he had a four-year guarantee on the work, and understandably relied upon representations by the roofer that there was no evidence of leaks.
His representation in April, 1979, that the house had a new roof" was substantially correct, and without intent to deceive or trick the realtor or prospective buyers. Accordingly, the charge that Respondent falsely represented the condition of the roof should be dismissed.
B. Count II - Under this count Petitioner first contends that Stewart misrepresented to the buyer vis a vis realtor the condition of the roof and the amount of rebuilding done to the house. It has previously been found that the house was indeed completely rebuilt, and that the facts do not support this charge. The same is true as to the allegation concerning the roof, and this charge should also be dismissed.
Finally, it is alleged that Stewart induced Dietz to execute a quit-claim deed conveying a strip of land on which a fence was erected to the adjoining property owner, and when doing so, failed to advise her that the grantee could remove the fence at his will. Initially, it should be noted that the allegations in the complaint and the actual facts are at variance. To begin with, it was Stewart and Romeo, and not Dietz, who executed a quit-claim deed conveying a strip of land to the neighbors.
