STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF PROFESSIONAL ) REGULATION, BOARD OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) CASE NO. 81-2504

)

HOMES-R-US, INC. and VERA ) McWEENEY and ANTHONY CUTRONA, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, in Tampa, Florida on January 13, 1982, before Thomas C. Oldham, Hearing Officer.

APPEARANCES

For Petitioner: Salvatore A. Carpino, Esquire

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

For Respondent: Joseph R. Park, Esquire

33 North Ft. Harrison Avenue Clearwater, Florida 33515

ISSUE PRESENTED

Whether Respondent Homes-R-Us, Inc.'s license as a corporate real estate broker, Respondent Vera McWeeney's license as a real estate broker, and Respondent Anthony Cutrona's license as a real estate salesman should be suspended or revoked, or the licensees otherwise disciplined for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint dated September 3, 1981.

The Administrative Complaint herein alleges that the Respondents utilized a contract form in their business of negotiating rentals and furnishing information to prospective tenants which did not conform to Rule 2IV-10.30, Florida Administrative Code, therefore being in violation of various provisions of Chapter 475, Florida Statutes. The Complaint also alleges that Respondents employed various persons to conduct the business who were not licensed by Petitioner, and who were paid compensation, in violation of various provisions of Chapter 475, Florida Statutes.

At the commencement of the hearing, the parties stipulated to the facts set forth in Paragraphs 2-4 of the Administrative Complaint, and that Respondents, in their business of furnishing rental information to prospective tenants for a fee, utilized a contract form which did not conform to Rule 2IV-10.30, Florida Administrative Code. As to Count II, the parties stipulated that during the times alleged in the Administrative Complaint, the corporate Respondent employed unlicensed personnel who performed certain activities, to include (1) acceptance of a rental fee provided in the contract, (2) receipting of the rental contract,

1. delivery to the prospective customer of the "vacancy book" containing available rental properties, and (4) verifying the availability of various rental properties after selection by the customer by telephoning the prospective lessor of the property.

   
   

   Respondents Anthony R. Cutrona and Vera McWeeney testified at the hearing, and Petitioner called its investigator, Francis A. Maye, and a former investigator, Debbie J. Minutoli, as witnesses. Petitioner submitted eight exhibits in evidence and Respondent submitted one exhibit.

   
   

   FINDINGS OF FACT

   
   

   1. Respondent Homes-R-Us, Inc. is now, and was at all times relevant to the matters alleged in the Administrative Complaint, licensed as a corporate real estate broker, License No. 0212520, at 9000A North Florida Avenue, Tampa, Florida. (Stipulation)

      
      

   2. Respondent Vera McWeeney is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate broker, License Nos. MI4 0058950 and MI4 021252, and the active firm member and officer of Homes-R-Us, Inc. (Stipulation)

      
      

   3. Respondent Anthony R. Cutrona is now, and was at all times alleged in the Administrative Complaint, licensed as a real estate salesman for Homes-R-Us, Inc., with License No. MI4 0328427. (Stipulation)

      
      

   4. Homes-R-Us, Inc. is a firm that solicits or otherwise receives from prospective lessors of residential property, information about such rentals which is then placed in a book and provided to prospective tenants who pay a fee to the firm in order to locate appropriate rental property. The firm advertises such available rentals in newspapers and secures customers in this manner. No fee is charged to the owner or prospective lessor of the property. The normal procedure employed by the firm is to receive payment of the fee from a customer, permit the customer to select any suitable properties from the descriptive information, and then seek telephonic confirmation of the continuing availability of the selected properties. The customer then proceeds to visit the property or otherwise contact the owner and negotiate a rental, if desired. If unsuccessful or unsatisfied with the properties, the customer can continue to avail himself of the "listings" maintained by Homes-R-Us, Inc. for a period of three months on a daily basis. (Testimony of Cutrona, Stipulation, Petitioner's Exhibits 2-3, 8)

      
      

   5. Respondent Cutrona has been the general manager of Homes-R-Us, Inc. since it was established in November, 1979. Respondent McWeeney was obtained as the firm broker on a gratuitous basis to supervise the activities of the firm. A form contract is used between Homes-R-Us, Inc. and the customer at the time the fee is paid by the customer to obtain rental information. The form was designed by Cutrona when the firm commenced business and was approved by McWeeney. The contract contained a provision that purportedly was included

      pursuant to law that read in part "If you do not obtain a rental, you are entitled to receive a return of 26 percent of the fee paid, if you make demand within 30 days of this contract date". Respondents used the figure of 26 percent for refund purposes based upon their interpretations of the requirements of Subsection 475.453(1), Florida Statutes. They were not aware of the fact that Petitioner's Rule 21V-10.30, Florida Administrative Code, (formerly Rule 21V-10.15) provided that such contracts should provide for a refund of 75 percent of the fee. Accordingly, the contract form was in violation of the applicable rule. (Testimony of Cutrona, McWeeney, Petitioner's Exhibits 2-3, Respondents' Exhibit 1)

      
      

   6. At the time Homes-R-Us, Inc. commenced business, in November, 1979, Respondent McWeeney was the only licensed employee in the firm. Cutrona received his license as a salesman in January, 1980. During the period February to August, 1980, the firm employed another licensed real estate salesman, but during the period from August to November 21, 1980, Respondents were the only licensed personnel. On the latter date, an employee, Brenda Serino, received her license as a real estate salesman. A branch office in Tampa had been opened in the spring of 1980, and Cutrona spent one day a week in that office. He was at the original Largo office during the other six days of the week. Respondent McWeeney periodically visited the office and kept in touch with activities by telephone communications. (Testimony of Cutrona)

      
      

   7. On November 10, 1980, Deborah Minutoli, an investigator for Petitioner, visited Respondents' office in an "undercover" capacity. Her investigation was prompted by several complaints that had been filed against the firm. She posed as a customer, signed the contract and paid a $45 fee to look through their listing book. She dealt with Brenda Serino, who was at that time an unlicensed employee of Homes-R-Us, Inc. Ms. Serino signed the contract on behalf of the Respondent firm. Ms. Minutoli told the employee that she was looking for a one- bedroom or efficiency-type, apartment and could pay about $180 rent per month. Ms. Serino explained a sample listing in the book and the type of information included in the listings. Ms. Minutoli then looked through the book and found five listings which she wrote on a piece of paper and gave to Ms. Serino. Several persons in the office, including Respondent Cutrona, made telephone calls to verify the listings, but only one person was able to be contacted at that time. An employee, Jackie Mourey, then presented Ms. Minutoli with a form showing the five rentals with addresses, telephone numbers, and rental prices, which both signed. The form also included a sixth rental which Ms. Mourey said was a new listing that had just come in and had not been placed in the book as yet, but since it was within the requested price range and location, it was placed on the form. Ms. Minutoli departed from the office and several days later examined one of the rental properties, drove past the other ones and returned to Respondents' office the following day. At this time, she requested that her fee be returned because the properties were unsatisfactory. Respondent Cutrona urged her to continue using the service, but gave her an "adjustment form" to fill out and told her that they would decide whether or not a refund was in order. She subsequently attempted to reach Cutrona by telephone, but was unsuccessful on several occasions. On November 21st, she spoke to him over the phone and he suggested that she fill out the "adjustment form". On November 24th, she, together with investigator Greg Clift, went to Respondents' office and gave the "adjustment form" to Cutrona, but he declined to make the refund. Subsequently, during the same month, Ms. Minutoli, together with another of Petitioner's investigators, Francis Maye, went back to Respondents' office.

      Maye posed as her uncle and again they sought a refund of the fee which had previously been paid, but again were unsuccessful. (Testimony of Minutoli, Maye, Petitioner's Exhibits 2-7)

   8. Investigator Maye had previously talked to Respondent Cutrona's wife at one of the offices concerning a refund complaint from another customer. At that time a refund was made in full. Maye had a conversation with Respondent Cutrona on November 25, 1980 concerning the percentage of fees payable to a customer on a refund. According to Cutrona, Maye questioned the use of a 26 percent refund amount, and told Cutrona he would get back to him later and verify the correct percentage of any refund, but never did so. Cutrona's testimony in this respect is considered credible. During the conversation, Maye did not advise Cutrona to cease using the 26 percent figure or to revise the contract form. Cutrona later talked to another employee of Petitioner who convinced him that Petitioner's regulations required a 75 percent refund and the firm thereupon revised its form to reflect the correct percentage. Investigator Maye also spoke to Respondent McWeeney in November, 1980 concerning the "seven services of real estate" and what services could be performed by unlicensed personnel in the rental office, but did not inform her concerning any suspected irregularities in the operation of Homes-R-Us, Inc. (Testimony of Maye, Cutrona, McWeeney)

      
      

   9. Respondents' employees were mostly part-time help who were compensated on an hourly basis, and it was therefore difficult to obtain licensed personnel who would remain with the firm. The clerical personnel do not provide any information to customers regarding leasing arrangements, but do receive listings called in to the office by landlords. Only licensed personnel solicit listings from prospective lessors, or owners of property. Additionally, unlicensed clerical personnel accept rental fees, prepare rental contracts, deliver the "vacancy book" to customers, and verify rental availabilities by telephone to the prospective lessors. (Testimony of Cutrona, Stipulation)

      
      

      CONCLUSIONS OF LAW

      
      

   10. Petitioner seeks to take disciplinary action against Respondents on grounds set forth in Section 475.25, Florida Statutes, pertinently as follows:

       
       

       475.25 Discipline.--

       (1) The board. . .may suspend the license for a period not exceeding 10 years, may revoke a license, may impose an administrative fine not to exceed $1,000 for each count or separate offense, or may issue a reprimand, if it finds that the licensee. . .has:

       (e) Violated any of the provisions of this chapter or any lawful order or rule made or issued under the provisions of this chapter or chapter 455;

       (h) . . .paid a fee or other compensation to, a person not properly licensed as a broker, broker-salesman, or salesman under the laws of this state. . .for any one or more of the services set forth in s. 475.01(3). . .

       
       

   11. The Petitioner alleges that Respondents violated Subsection 475.453(1), F.S., which provides that a licensee who provides a prospective tenant with rental information for a fee must provide such tenant with a contract or receipt containing a provision for the payment of any amount over 25 percent of the fee if the prospective tenant does not obtain a rental. It further provides that the contract or receipt shall conform to the guidelines adopted by the board in order to effect disclosure of material information

       regarding the service to be provided to the prospective tenant. Petitioner's Rule 21V-10.30, Florida Administrative Code, and its predecessor Rule 21V-10.15 provided that the statutory requirement concerning amounts of refund to be contained in contracts must contain the following sentence: "If you do not obtain a rental you are entitled to receive a return of 75 percent of the fee paid, if you make demand within 30 days of this contract date."

       
       

   12. Respondents concede that they violated the refund percentage provision in their contract forms, based upon a misapprehension concerning the intent of the statute, and having been in ignorance of the pertinent rule which made such provision clear. Although the statute in question is somewhat ambiguous, Respondents were charged with the duty to inform themselves as to the requirements of Petitioner's rules, and not having done so, cannot be excused for failing to provide accurate information to their customers. No allegations, however, have been made by Petitioner that Respondents actually paid less than the required 75 percent refund to any specific customer when refunds, in fact, were made.

       
       

   13. Petitioner predicates its ground for discipline under Subsection 475.25(1)(h), F.S., on allegations that Respondents employed certain persons for compensation to perform the business of Respondents as follows:

       
       

       ". . .to rent or attempt to rent, lease or attempt to lease the real property of others for compensation or valuable consideration directly or indirectly paid or promised. It is further the business of the Respondents to procure lessors and lessees and to advertise rental property information or list for compensation or valuable consideration directly or indirectly paid or promised."

       
       

   14. Subsection 475.01(3), F.S., describes services which are to be performed only by licensed personnel, and includes "all persons who advertise rental property information or lists". The evidence in this case does not establish that any of Respondents' clerical personnel placed advertisements concerning rental property during the course of their duties. Neither does it show that they performed any services which directly involved the leasing of any of the listed rental properties. Although they did, on occasion, receive information concerning rental properties from prospective lessors over the telephone, this function was ministerial in nature and cannot be considered the performance of real estate services as such. Any solicitations of prospective lessors were made only by licensed personnel. The mere fact that one of Respondents' employees added a listing to the properties selected by one of Petitioner's investigators who posed as a customer, is not considered to come within the purview of prohibited activities for unlicensed personnel. Consequently, it is determined that Petitioner has failed to establish a violation of Subsection 475.25(1)(h), F.S.

       
       

   15. Inasmuch as the established violation of Subsection 475.25(1)(e), F.S., is deemed to have been due to simple negligence rather than a deliberate attempt to defraud or cheat customers, it is believed that an administrative fine of $250.00 against the Respondent Homes-R-Us, Inc. is appropriate under the circumstances. Additionally, Respondents Cutrona and McWeeney should receive a public reprimand for failing to abide by the pertinent law.

RECOMMENDATION

That an administrative fine of $250.00 be imposed against Respondent Homes- R-Us, Inc., and that a public reprimand be issued to Respondent Vera McWeeney and Anthony Cutrona for violation of Subsection 475.25(1)(e), Florida Statutes.

DONE and ENTERED this 25th day of February, 1982, in Tallahassee, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1982.

COPIES FURNISHED:

Salvatore A. Carpino, Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Joseph R. Park, Esquire

33 North Ft. Harrison Avenue Clearwater, Florida 33515

Mr. C. B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801

Frederick H. Wilsen Assistant General Counsel

Department of Professional Regulation

130 North Monroe Street Tallahassee, Florida 32301

Docket for Case No: 81-002504

Orders for Case No: 81-002504