STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF FLORIDA LAND SALES ) AND CONDOMINIUMS, )

)

Petitioner, )

)

vs. ) CASE NO. 82-1763

) COUNTRY LINE SOUTH, INC., d/b/a ) PINECREST ESTATES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on November 29, 1982, in Miami, Florida.

APPEARANCES

For Petitioner: Daniel J. Bosanko, Esquire

Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

For Respondent: No appearance

ISSUE

Whether respondent violated Section 498.023, Florida Statutes, by offering or disposing of an interest in subdivided lands (Pinecrest Estates) without first registering it or delivering a public offering statement to the purchasers and, if so, what penalty should be assessed or affirmative action ordered.

BACKGROUND

By Notice to Show Cause dated April 22, 1982, petitioner Division of Florida Land Sales and Condominiums ("Division") charged respondent County Line South, Inc. d/b/a Pinecrest Estates ("respondent") with violating Section

1. Florida Statutes (1981) by offering or disposing of subdivided lands without first registering it or delivering a public offering statement to the purchasers.

   
   

   Respondent requested a hearing on the charges and, on June 30, 1982, this case was forwarded to the Division of Administrative Hearings for assignment of a Hearing Officer to conduct the requested hearing. Hearing was initially set for October 5, 1982; on the Division's motion, it was continued and reset for November 29, 1982.

   At hearing the Division offered petitioner's Exhibit Nos. 1B - 7B into evidence, each of which was received. Respondent did not appear and offered no evidence. Proposed findings of fact and conclusions of law were filed by the Division on December 28, 1982.

   
   

   Based on the evidence presented, the following facts are determined: FINDINGS OF FACT

   1. Pinecrest Estates is a subdivision of approximately 1045 separate contiguous lots which was platted of record in St. Johns County, Florida in 1925. In 1967, Ponte Vedra, Inc., registered this subdivision with the Division of Florida Land Sales and Condominiums pursuant to Chapter 498, Florida Statutes, then Chapter 478, Florida Statutes. Respondent has never made or held any registration of all or any part of Pinecrest Estates.

      
      

   2. Since 1969, respondent has purchased 20 lots in Pinecrest Estates; since June 20, 1980, it has resold at least nine of them.

      
      

   3. The Division's inspection of Pinecrest Estates revealed that this land is inaccessible by conventional auto, that it is, generally, of a low and swampy character, and that it is unfit for use for human habitation unless it receives extensive improvements, including the adding of substantial fill dirt and building of adequate roads.

      
      

   4. Since respondent did not obtain a registration for its Pinecrest Estates property, it also did not have an approved offering statement to deliver to purchasers as contemplated by Chapter 498 Florida Statutes.

      
      

      CONCLUSIONS OF LAW

      
      

   5. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. Section 120.57(1) Florida Statutes (1981).

      
      

   6. Chapter 498 Florida Statutes (1981) provides in pertinent part:

      
      

      1. Prohibitions on dispositions of interests in subdivided lands. -- Unless the subdivided lands are exempt or the transaction is exempt pursuant

         to s. 498.025: 1/

         1. No person may offer or dispose of, interest in subdivided lands located in this state, nor may any person offer or dispose of any interest in subdivided lands located without this state to persons in this state, nor may any person within this state offer or dispose of, or participate within this state in an offer or disposition of, any interest in subdivided lands located without this state, unless such person has a valid order of registration there- for.

         2. No person may dispose of, or par- ticipate in the disposition of, any interest in sub- divided lands unless a current public offering state- ment is delivered to the purchaser prior to the dis- position, the purchaser is afforded a reasonable opportunity to examine the public offering statement

      prior to the disposition, and the contract and public offering statement used contain a provision which authorizes the purchaser to cancel the agreement with- out cause until midnight of the seventh day after execution by the purchaser.

      
      

      498.005(17) "Subdivision" or subdivided lands" means:

      1. Any contiguous land which is divided or proposed to be divided for the purpose of disposition into 50

         or more lots, parcels, units, or interests; or

      2. Any land, whether contiguous or not, which is divided or proposed to be divided into 50 or more lots, parcels, units, or interests which are offered as a part of a common promotional plan.

         
         

         498.031(1) Inquiry and examination

         1. Upon receipt of an application for registration in proper form, the division shall conduct an examination to determine whether:

            (f) The public offering statement requirements of this Chapter have been satisfied . . .

         2. The division may deny the application of any person who does not meet all of the requirements of subsection (1) . . .

      
      

      498.037(1) Any public offering statement shall disclose fully and accurately the physical characteristics of the subdivided lands offered and shall make known to prospective

      purchasers all annual and material circumstances or features affecting the subdivided lands.

      
      

   7. The Division is empowered to enforce these provisions by imposing civil penalties and issuing cease and desist orders or orders requiring affirmative action by the offending party:

      
      

      498.049(4) The division may, by order, impose civil penalties against any person for violations of this chapter or rules relating hereto. Such imposition of a civil penalty shall not pre-

      clude the division from invoking any other appropriate remedy authorized by this chapter No civil penalty so imposed shall exceed

      $10,000 for each offense, and all amounts collected shall be deposited with the Treasurer to the

      credit of the Florida Land Sales Trust Fund ...

      
      

      498.051(1) The division may issue an order requiring a person to cease and desist, and to take such affirmative action as in the judgment of the division will carry out the purpose of this chapter, if the division determines that the person has:

      1. Violated any provision of this chapter;

   8. Section 498.023 above, prohibits any person from offering or disposing of any interest in subdivided lands without first obtaining a registration for them pursuant to Chapter 498 and delivering a public offering statement to the purchasers of such interests. Here, respondent violated Section 498.023 by offering and disposing of subdivided lands without first obtaining a registration or delivering an approved public offering statement. An approved public offering statement would have disclosed to purchasers the swampy and inaccessible nature of property involved.

      
      

   9. Section 498.049(1), supra, authorizes the Division to assess up to a

      $10,000 civil penalty for each violation of Chapter 498. In this case, the Division seeks a total of $10,000 in civil penalties for the unlawful sales of the subdivided lands.

      
      

   10. Section 498.051(1), supra, authorizes the Division to order affirmative action as necessary to carry out the purposes of Chapter 498. In this case, the Division seeks to order the respondent to fully disclose to its prior purchasers all negative features and aspects of the Pinecrest property, and to make refunds to those persons who request them. The Division also seeks to order the respondent to record all agreements for deeds covering prior lot sales to persons who decline to request a refund of their purchase prices.

       
       

   11. The penalties and affirmative relief sought by the Division are reasonable and appropriate under the circumstances of this case.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the Division enter an order assessing a $10,000 civil penalty against respondent for its violation of Chapter 498 Florida Statutes; requiring respondent to fully disclose the adverse features of the Pinecrest Estates property to each of its prior purchasers, such disclosure to be accomplished in a manner approved by the Division; requiring respondent to offer and make full refunds to its prior purchasers who desire a refund, such refunds to be made in a manner approved by the Division and conditioned only on reconveyance of the land to the respondent or recission of the agreement for deed; and requiring respondent to record in the official records of St. Johns County, Florida, all outstanding agreements for deeds covering lots belonging to prior purchasers who, after disclosure, choose not to request refunds.

DONE AND RECOMMENDED this 11th day of January, 1983, in Tallahassee, Florida.

R. L. CALEEN, JR. 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 11th day of January, 1983.

ENDNOTE

1/ Respondent has not claimed exemption under Section 498.025.

Daniel C. Bosanko, Esquire Tallahassee, Florida 32301 Department of Business Regulation

725 South Bronough Street Gary R. Rutledge, Secretary Tallahassee, Florida 32301 Department of Business

Regulation

Richard Morganthaler Johns Building

Registered Agent 725 South Bronough Street 1600 N.E. Miami Gardens Drive Tallahassee, Florida 32301 North Miami Beach, Florida 33179

Docket for Case No: 82-001763

Orders for Case No: 82-001763