STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF PROFESSIONAL )
REGULATION, FLORIDA REAL )
ESTATE COMMISSION, )
)
Petitioner, )
)
vs. ) CASE NO. 83-4015
) LILA K. TERRY, RITA ANN SIMON, ) JOSEPH S. BERG, and PREFERRED ) PROPERTY ENTERPRISES, INC., )
)
Respondent. )
)
RECOMMENDED ORDER
A final hearing was held in this case in Fort Lauderdale, Florida, on February 29, 1984. The issue is whether the Florida Real Estate Commission should discipline respondents Lila K. Terry (Terry), Rita Ann Simon (Simon), Joseph S. Berg (Berg), and Preferred Property Enterprises, Inc. (Preferred Property), upon allegations made by petitioner Department of Professional Regulation (the Department) by Administrative Complaint.
The Administrative Complaint contains three counts. Count I alleges that respondents violated Section 475.25(1)(b), Florida Statutes (1982 Supp.), by failing, refusing, or neglecting to return all or part of a $75 advance fee paid for rental information not current or accurate and which did not result in a rental. Count II alleges that the facts alleged in Count I constitute a violation of Sections 475.453(1) and 475.25(1)(d) and (e), Florida Statutes (1982 Supp.). Count III alleges that respondents Simon and Berg, only salesmen, performed real estate brokerage services and acted free from the direction, control, and management of their broker, respondent Terry, and that respondents Simon and Berg thereby violated Sections 475.42(1)(b) and 475.25(1)(a), Florida Statutes (1982 Supp.). Count IV alleges that the same facts alleged in Count III constitute a violation by respondent Terry of Section 475.25(1)(b), Florida Statutes (1982 Supp.), through "license lending."
FINDINGS OF FACT 1/
Respondent Lila K. Terry is now and was at all times referred to herein a licensed real estate broker having been issued License No. 0087973. The last license issued is as a broker c/o Preferred Property Enterprises, Inc., 2130 Hollywood Boulevard, Hollywood, Florida 33020.
Respondent Rita Ann Simon is now and was at all times referred to herein a licensed real estate salesman having been issued License No. 0081037. The last license issued was as a salesman c/o Preferred Property Enterprises, Inc., 2130 Hollywood Boulevard, Hollywood, Florida 33020.
Respondent Joseph S. Berg is now and was at all times referred to herein a licensed real estate salesman having been issued License No. 0363693. The last license issued was as a salesman c/o Preferred Property Enterprises, Inc., 2130 Hollywood Boulevard, Hollywood, Florida 33020.
Respondent Preferred Property Enterprises, Inc., is a corporation licensed as a real estate broker having been issued License No. 0220707, c/o 2130 Hollywood Boulevard, Hollywood, Florida 33020.
At all times referred to herein, respondent Terry was the sole qualifying broker and officer of respondent Preferred Property Enterprises, Inc.
At all times referred to herein, respondents Rita Ann Simon and Joseph
S. Berg were salesmen licensed in the employ of respondent Preferred Property Enterprises, Inc.
On September 13, 1982, Preferred Property, through Berg and Simon, entered into a contract with Eileen and Alan Furedi, a copy of which was introduced in evidence as Petitioner's Exhibit 1, a copy of which is attached hereto and made a part hereof.
On September 13, 1982, Berg drove the Furedis to at least four available rental properties. Only one of the properties was in West Hollywood because rent on properties otherwise meeting the description in the contract exceeded the maximum rent stipulated in the contract. One rental property was near where the Furedis were residing at that time. Two others were in East Hollywood. One of the properties seemed suitable to Mr. Furedi, although it was located in East Hollywood. The rent was $375. However, Mrs. Furedi did not like the property because she saw what she thought was a water stain.
The next day, Mrs. Furedi telephoned Preferred Property to request a refund of the $75. Berg told her that Preferred Property would make the refund, but that the request had to be in writing. Berg also suggested that he thought a suitable rental property would become available in a reasonable amount of time.
The Furedis heard nothing more from Preferred Property on the subject and, on October 12, 1982, made a written request for a refund of the $75. The request was received on October 13, 1982. Berg, Simon, and Terry discussed the written request for refund and decided that it was not timely under the contract. Preferred Property therefore did not make a refund and did not respond to two subsequent inquiries by or on behalf of the Furedis. When the Department inquired of Preferred Property, Simon and Berg explained that the refund demand was not timely. Respondent Terry responded on May 9, 1983, that she was "leaving the facts and tribulations of the Furedi case to my salespeople, Rita Simon and Joseph Berg."
Later, after seeing a copy of the Administrative Complaint the Department was preparing to file in this case, Preferred Property refunded the
$75 to the Furedis in approximately November, 1983.
On the one to two occasions the Department's investigator appeared at the Preferred Property offices in connection with his investigation in this case, respondent Terry was not in the office. In a total of six to eight visits to Preferred Property on official business, the investigator only saw Terry at the office one time. However, it was not established whether Terry was the qualified broker for Preferred Property at the time of each of those visits.
Generally, Terry assumes overall supervisory responsibility for assuring that Preferred Property operates legally. This includes checking the stationery, checking the capital and escrow account books, signing checks on the escrow account, and attending to overall appearances of the Preferred Property office. To accomplish this, she appears at the office almost every morning.
But it only requires about an hour a day for her to attend to those responsibilities, and she usually then leaves the office. On other, less frequent occasions, she is required to come into the office in the afternoons and evenings to attend to these matters. Terry shows rental properties to customers on an infrequent basis (she has shown a total of approximately 30).
Preferred Property pays Terry 4 percent of its commissions on rentals for her services as qualified broker. Simon and Berg each get 20 percent of the commissions. The balance is divided between payments to a third Preferred Property salesman and general expenses of the business.
When Terry is at the Preferred Property office, Simon and Berg discuss questions that arise in the course of their activities with Terry and abide by her instructions. If questions cannot be resolved through this process, Terry asks Simon and Berg to telephone the Department for advice. Terry also advises Simon and Berg to telephone the Department for advice immediately if questions arise when she is not in the office. Terry herself has not placed any calls for advice to the Department.
Although Terry signs all checks on the escrow account, she does not sign on Preferred Property's operating account.
CONCLUSIONS OF LAW
Respondents' motion at the conclusion of the Department's case to dismiss Counts III and IV of the Administrative Complaint (on the ground that the Department did not present a prima facie case) is denied.
The Department argues that the facts show a violation of Section 475.25(1)(b), Florida Statutes (1982 Supp.). That statute provides:
The commission may deny an application for licensure or renewal, may suspend a license for a period not exceeding 10 years, or may revoke a license, 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 or applicant:
* * *
(b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in this state or any other state, nation, or territory; has violated a duty imposed upon him by law or by the terms of a
listing contract, written, oral, express, or implied, in a real estate transaction;
has aided, assisted, or conspired with any other person engaged in any such misconduct and in furtherance thereof; or has formed an intent, design, or scheme to engage in any such misconduct and committed an overt act in furtherance of such intent, design, or scheme. It is immaterial to the guilt of the licensee that the victim or intended victim of the misconduct has sustained no damage or loss; that the damage or loss has been settled and paid after discovery of the misconduct; or that such victim or intended victim was a customer or a person in confidential relation with the licensee or was an identified member of the general public. (Emphasis added.)
In this case, respondents failed to promptly refund the $75 advance fee upon timely demand. This failure resulted from respondents' mistaken belief that the demand for refund was untimely, absolving them from guilt under most of the proscriptions in the statute. However, respondents are guilty of culpable negligence and violation of a duty imposed on them by the terms of Preferred Property's contract with the Furedis.
The Department also charges that the facts constitute violations of Sections 475.453(1) and 475.25(1)(d) and (e), Florida Statutes (1982 Supp.).
Section 475.453(1) provides:
Each broker or salesman who attempts to negotiate a rental, or who furnishes rental information to a prospective tenant, for a fee paid by the prospective tenant shall provide such prospective tenant with a contract or receipt, which contract or receipt contains a provision for the repayment of any amount over 25 percent of the fee to the prospective tenant if the prospective tenant does not
obtain a rental. If the rental information provided by the broker or salesman to a prospective tenant is not current or accurate in any material respect, the
full fee shall be repaid to the prospective tenant upon demand. A demand from the prospective tenant for the return of the fee, or any part thereof, shall be made within 30 days following the day on which the real estate broker or salesman has contracted
to perform services to the prospective tenant. The contract or receipt shall also conform to the guidelines adopted by the commission in order to effect disclosure of material information regarding the service to be provided to the prospective tenant.
Rule 21V-10.30, Florida Administrative Code, provides:
Any broker or salesman who attempts to negotiate a rental or who furnishes information to a prospective tenant for a fee paid by the tenant shall provide such prospective tenant with a contract or receipt agreement in writing which
contract or receipt agreement must contain the following provision or legend in type size 10 point bold or larger:
NOTICE
PURSUANT TO FLORIDA LAW:
If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. 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.
Each contract or receipt agreement shall be contained on one side of one page not larger than 8 1/2 inch [sic] x 11 inches. The type size of the balance of the terms of the contract shall be in a size not smaller than 8 point type.
Each rental data company shall furnish the Department a copy of its contract or receipt agreement currently being
utilized within 30 days of the commencing use of such agreement.
Although the Furedi contract contains a provision providing the information required by Section 475.453(1) and Rule 21V-10.30, it also includes additional language, and the type size is not in compliance with the rule. Therefore, respondents technically have violated Section 475.453(1) and Rule 21V-10.30.
Section 475.25(1)(d) and (e), Florida Statutes (1982 Supp.), authorizes discipline against a licensee who:
Has failed to account or deliver to any person, including a licensee under this chapter, 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, any personal property such as money, fund, deposit, check, draft, abstract of titled 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.
However, if the licensee, in good faith, entertains doubt as to what person is entitled to the accounting and delivery of the escrowed property, or if conflicting demands have been made upon him for the escrowed property, which property he still maintains in his escrow or trust account, the licensee shall promptly notify the commission of such doubts or conflicting demands and shall promptly:
Request that the commission issue an escrow disbursement order determining who is entitled to the escrowed property;
With the consent of all parties, submit the matter to arbitration; or
By interpleader or otherwise, seek adjudication of the matter by a court.
If the licensee promptly employs one of the escape procedures contained herein, and if he abides by the order or judgment resulting therefrom, no administrative
complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property.
Has 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. (Emphasis added.)
Therefore, respondents' technical violation of Section 475.453(1) is grounds for discipline under Section 475.25(1)(e). In addition, the same conduct which constitutes a violation of subparagraph (b) also constitutes a violation of subparagraph (d) of Section 475.25(1).
Finally, Section 475.42(1)(b), Florida Statutes (1982 Supp.), provides:
VIOLATIONS.--
(b) No person licensed as a salesman shall operate as a broker or operate as a salesman for any person not registered as his employer.
Violation of that provision is made a ground for discipline under Section 475.25(1)(a), Florida Statutes (1982 Supp.).
Section 475.01(1)(d), Florida Statutes (1982 Supp.), defines a salesman as "a person who performs any act specified in the definition of
`broker,' but who performs such act under the direction, control, or management of another person." It therefore is violative of Section 475.42(1)(b) to operate as a broker except under the direction, control, or management of a broker. While the facts in this case raise a suspicion as to the extent to which Berg and Simon operated under Terry's control, the facts are insufficient to sustain a conclusion either that Berg and Simon violated Sections 475.42(1)(b) or 475.25(1)(a), or that Terry violated Section 475.25(1)(b) for "license lending."
Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Florida Real Estate Commission impose an administrative fine in the amount of $75 on each of the respondents.
RECOMMENDED this 16th day of April, 1984, in Tallahassee, Florida.
J. LAWRENCE JOHNSTON 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 16th day of April, 1984.
ENDNOTE
1/ Except to the extent consistent with the following findings of fact, respondents' proposed findings of fact are rejected as either being not supported by competent substantial evidence, being contrary to the greater weight of the evidence, or being irrelevant.
COPIES FURNISHED:
Fred Langford, Esquire Department of Professional
Regulation
Post Office Box 1900 Orlando, Florida 32802
Dewey A. F. Ries, Esq.
215 North East Third Street Fort Lauderdale, Florida 33301
Mr. Fred Roche Secretary
Department of Professional Regulation
130 North Monroe Street Tallahassee, Florida 32301
Mr. Harold Huff, Director Division of Real Estate Department of Professional
Regulation
Post Office Box 1900 Orlando, Florida 32802
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AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION
DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION
Petitioner,
vs. CASE NO. 0032033
DOAH NO. 83-4015
LILA K. TERRY, RITA ANN SIMON, JOSEPH S. BERG and PREFERRED PROPERTY ENTERPRISES, INC.
Respondents.
/
FINAL ORDER
The Florida Real Estate Commission heard this case on June 19, 1984 to issue a Final Order.
Hearing Officer J. Lawrence Johnston of the Division of Administrative Hearings presided over a formal hearing on February 29, 1984. On April 16, 1984, he issued a Recommended Order, which is adopted by the Florida Real Estate Commission as to all Findings of Fact and Conclusions of Law. A copy of this Recommended Order is attached here to as Exhibit A and made a part hereof.
However, as to the Recommendation, after a complete review of the record the Florida Real Estate Commission hereby ORDERS that the recommended fine of
$75.00 for each Respondent be increased to $500.00 for each Respondent, said
administrative fine to be paid to the Department of Professional Regulation on or before the effective date of this Order.
This Order shall be effective thirty (30) days from the date of filing with the Clerk of the Department of Professional Regulation.
DONE AND ORDERED this 19th day of June 1984 in Orlando, Florida.
Brian J. Ladell, Chairman Florida Real Estate Commission
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was sent by
U.S. Mail to: Dewey A.F. Ries, Esquire, 215 North East 3rd Street, Ft. Lauderdale, Florida 33301; to Fred , Staff Attorney, Dept. of Professional Regulation, P O Box 1900, Orlando, Florida 32802; and to Hearing Officer J. Lawrence Johnston, Division of Administrative Hearings, 2009 Apalachee Parkway, Tallahassee, Florida 32301, this 6th day of July 1984.
Harold R. Huff, Director
RA:pep
| Issue Date | Proceedings |
|---|---|
| Jul. 09, 1984 | Final Order filed. |
| Apr. 16, 1984 | Recommended Order sent out. CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Jun. 19, 1984 | Agency Final Order | |
| Apr. 16, 1984 | Recommended Order | Respondents didn't return advance fee on unsuccessful rental agreement and violated statute on type size used in the contract provisions. |
