STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION: FLORIDA REAL ESTATE COMMISSION . FLORIDA DEPARTMENT OF BUSINESS O0- 49 ") AND PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE, Petitioner, vs. FDBPR Case N° 99-83278 FRED O’CONNOR SMITH, JR. Respondent. / ADMINISTRATIVE COMPLAINT State of Florida, Department of Business and Professional Regulation, Division of Real Estate (hereinafter "Petitioner") files this Administrative Complaint against Fred O’Connor Smith, Jr. (hereinafter "Respondent") and alleges: ESSENTIAL ALLEGATIONS OF MATERIAL FACT 1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular § 20.165, Fla. Stat., Chapters 120, 455 and 475, Fla. Stat., and the rules promulgated pursuant thereto. 2. Respondent is and was at all times material hereto a licensed Florida real estate broker, issued license number 0355894 in accordance with Chapter 475, Fla. Stat. 3. The last license issued was as a voluntary inactive broker at 1100 N. 4" Street, Riviera Beach, Florida 33404. FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint 4. Respondent represented a potential buyer, Roy G. Clayton as single agent. The buyer deposited $500 with Respondent as an escrow deposit. 5. On or about September 12, 1998, the buyer entered into a Contract for Sale and Purchase (“contract”) with Jimmie McAdams for property located at 142 W. 34" St., Rivera Beach, Florida. A copy of the contract is attached hereto, incorporated herein and made a part hereof by reference as Administrative Complaint Exhibit 1. 6. McAdams is a real estate licensee, and listed his property with Mirsky Realty Group, Inc. 7. The contract provided that the closing would take place 12 days after the buyer obtained a loan commitment, and that the buyer was to obtain a loan commitment within 24 days from the contract date. 8. The buyer was unable to obtain financing, and it appears that the parties orally agreed to continue with the contract,.where on December 13, 1998, the parties executed an Addendum to the contract. A copy of the addendum is attached hereto, incorporated herein and made a part hereof by reference as Administrative Complaint Exhibit 2. 9. The real estate transaction continued and on January 29, 1999, the buyer received a letter of denial from a lender dated January 29, 1999. The buyer continued to attempt to obtain financing, and on February 5, 1999, the buyer received a denial letter from a second lender. 10. On or about February 18, 1999 and March 11, 1999, the seller forwarded a Release of Deposit Form to Respondent requesting a disbursal to the seller. Additionally, the seller alleges that FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint he orally advised Respondent at some point between February 10, 1999 to February 17, 1999 that he was making a demand on the deposit. 11. Rule 61J2-10.032, Fla. Adm. Code provides in part that: (1)(@) A real estate broker, upon receiving conflicting demands for any trust funds being maintained in the broker’s escrow account, must provide written notification to the Commission within 15 business days of the last party’s demand, and the broker must institute one of the settlement procedures as set forth in s. 475.25(1)(d)1., Florida Statutes, within 30 business days after the last demand. (b) A broker, who has a good faith doubt as to whom is entitled to any trust funds held in the broker’s escrow account, must provide written notification to the Commission within 15 business days after having such doubt and must institute one of the settlement procedures as set forth in s. 475.25(1)(d)1., Florida Statutes, within 30 business days after having such doubt. The determination of good faith doubt is based upon the facts of each case brought before the Commission. Based upon prior decisions of the Commission, good faith doubt shall be deemed to exist in the following situations: 1. the closing or consummation date of the sale, lease, or other transaction has passed, and the broker has not received conflicting or identical instructions from all of the parties concerning the disbursement of the escrowed funds)... (Emphasis added). - 12. Respondent did not notify the Florida Real Estate Commission within 15 business days from the date of the seller’s last demand, nor did he notify based upon the good faith doubt, as he did not have identical instructions from both parties as to the escrowed funds. Respondent did not institute a settlement procedure within 30 days as provided in r. 61J2-10.032, Fla. Adm. Code and sec. 475.25(1)(d)1, Fla. Stat. 13. On or about February 17, 1999, Respondent disbursed the $500 escrow deposit to the buyer. 14. Pursuant to an office inspection and audit conducted on October 14, 1999, during 3 FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint investigation of this complaint, it was discovered that Respondent had failed to prepare monthly reconciliation statements. Respondent had not maintained any funds in his escrow account from July 1999 to October 1999. A copy of the office inspection and audit form is attached hereto, incorporated herein and made a part hereof by reference as Administrative Complaint Exhibit 3. COUNT I Based upon the foregoing, Respondent is guilty of failure to provide written notification to the Commission within 15 business days of the last demand or good faith doubt of the procedure instituted to resolve the escrow fund dispute and must institute one of the settlement procedures as set forth in § 475.25(1)(d)1., Fla. Stat., within 30 days after having such doubt, all in violation of Fla, Admin. Code R. 61J2-10.032(1){a) and therefore in violation of § 475.25(1)(e), Fla. Stat. (1998). COUNT II Based upon the foregoing, Respondent is guilty of failure to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement thereof was properly authorized in violation of § 475.25(1)(k), Fla. Stat. (1998). COUNT IT Based upon the foregoing, Respondent is guilty of breach of trust in any business transaction in violation of § 475.25(1)(b), Fla. Stat. (1998). COUNT IV Based upon the foregoing, Respondent is guilty of failure to account or deliver funds in 4 FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint violation of § 475.25(1)(d)1, Fla. Stat. (1998). COUNT V Based upon the foregoing, Respondent is guilty of failure to prepare the required written monthly escrow statement-reconciliations in violation of Fla. Admin. Code R. 61J2-14.012(2) and (3) and is, therefore, in violation of § 475.25(1)(e), Fla. Stat. WHEREFORE, Petitioner respectfully requests the Florida Real Estate Commission, or the Department of Business and Professional Regulation, as may be appropriate, to issue a Final Order as final agency action finding the Respondent(s) guilty as charged. The penalties which may be imposed for violation(s) of Chapter 475, Fla. Stat., depending upon the severity of the offense(s), include: revocation of the license or registration or permit; suspension of the license, registration or permit for a period not to exceed ten (10) years, imposition of an administrative fine of up to $1,000 for each count or. offense; imposition of investigative costs; issuance of a reprimand; imposition of probation subject to terms including, but not limited to, requiring the licensee, registrant or permitee to complete and pass additional real estate education courses; publication; or any combination of the foregoing which may apply. See § 475.25(1), Fla. Stat. and Rule 61J2- 24.001, Fla. Admin. Code. The penalties which may be imposed for violation(s) of Chapter 455, Fla. Stat., depending upon the severity of the offense(s), include: revocation of the license, registration, or permit; suspension of the license, registration, or permit for a period not to exceed ten (10) years; imposition of an administrative fine of up to $5,000 for each count or offense; imposition of investigative costs; issuance of a reprimand; imposition of probation subject to terms 5 FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint including, but not limited to, requiring the licensee, registrant, or permitee to complete and pass additional real estate education courses; publication; restriction of practice; injunctive or mandamus relief; imposition of a cease and desist order; or any combination of the foregoing which may apply. See § 455.227, Fla. Stat. and Rule 6132-24.001, Fla. Admin. Code. SIGNED this [5 Ue day of utly , 2000. Lhe PLLALE epartment of Business-and—— Professional Regulatio: By: Herbert S. Fecker, Jr. Director, Division of Real Estate ATTORNEY FOR PETITIONER Sunia Y. Marsh CaN loa Florida Bar N° 0068896 boee >) 4 | ee Senior Attorney, Real Estate ne, Sara B® Department of Business and ee Professional Regulation, Legal Section - Suite N 308 Hurston Bldg. North Tower 400 West Robinson Street Orlando, Florida 32801-1772 (407) 481-5632 (407) 317-7260 FAX FDBPR v. Fred O’Connor Smith, Jr. Case No. 99-83278 Administrative Complaint SM/k PCP: DS/MV 7/00 NOTICE TO RESPONDENTS PLEASE BE ADVISED that mediation under § 120.573, Fla. Stat, is not available for administrative disputes involving this type of agency action. PLEASE BE FURTHER ADVISED that pursuant to this Administrative Complaint you may request, within the time proscribed, a hearing to be conducted in this matter in accordance with Sections 120.569 and 120.57, Fla. Stat.; that you have the right, at your option and expense, to be represented by counsel or other qualified representative in this matter; and that you have the right, at your option and expense, to take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf if a formal hearing is requested. PLEASE BE FURTHER ADVISED that if you do not file an Election of Rights form or some other responsive pleading with the Petitioner within twenty-one (21) days of receipt of this Administrative Complaint, the Petitioner will file with the Florida Real Estate Commission a motion requesting an informal hearing and entry of an appropriate Final Order which may result in the suspension or revocation of your real estate license or registration. Please see the enclosed Explanation of Rights and Election of Rights form.

Docket for Case No: 00-004917PL