STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

A final hearing was held before Daniel M. Kilbride, Administrative Law Judge, of the Division of Administrative Hearings, between Orlando and Tallahassee, Florida, by video teleconference on June 2, 2009.

APPEARANCES

For Petitioner: Jennifer Leigh Blakeman, Esquire

Department of Business and Professional Regulation

400 West Robinson Street, Suite N-801 Orlando, Florida 32801

For Respondent: Anthony Alexander, pro se

1135 Calanda Avenue

Orlando, Florida 32807 STATEMENT OF THE ISSUE

Whether Respondent committed fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of

trust in any business transaction as alleged in the Administrative Complaint in violation of Subsection 475.25(1)(b), Florida Statutes (2006).1

PRELIMINARY STATEMENT

On or about November 26, 2008, Petitioner filed a one-count Administrative Complaint against Respondent alleging that Respondent violated the statute set forth above. Respondent denied the essential factual allegations and requested an administrative hearing. This matter was then referenced to the Division of Administrative Hearings (DOAH) for a formal hearing.

The final hearing was originally scheduled for March 23, 2009. The final hearing was continued to June 2, 2009, upon Respondent’s Motion. The final hearing was held on June 2, 2009. At the hearing, Petitioner called three witnesses: Investigator Debbie C. Terry, Jacqueline Danzer and Lois Henry. Petitioner also offered nine exhibits into evidence. Exhibits 1 through 5, 8, and 9 were admitted in their entirety, and the first two pages of Exhibit 6 were admitted. Official recognition was taken of Chapters 120 and 475, Florida Statutes. Respondent testified in his own behalf, but offered no additional exhibits.

A two-volume Transcript was filed on June 19, 2009. Each party was advised at the hearing that they could submit proposed findings of fact and conclusions of law within ten days of the

filing of the transcript. Petitioner filed its proposal on June 25, 2009. Respondent has not filed his proposal as of the date of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.165 and Chapters 120, 455 and 457, Florida Statutes.

2. Petitioner has jurisdiction over disciplinary proceedings before the Florida Real Estate Commission (FREC) and is authorized to prosecute administrative complaints against licensees within FREC’s jurisdiction.

3. At all times material, Respondent was a licensed Florida real estate broker, license number 684990, under Chapter 475, Florida Statutes.

4. The last license issued to Respondent was as a broker at Florida’s Best Buy Realty & Mortgage Lender, LLC, Post Office Box 551, Winter Park, Florida 32793.

5. On or about February 15, 2007, Respondent entered into a contract to manage the single-family dwelling owned by Jacqueline Danzer. The property is located at 2979 Krista Key Circle, Orlando, Florida 32817 (Subject Property). The agreement was for the period February 15, 2007, until

   February 15, 2008.

6. Respondent was authorized, under the management agreement, to seek a tenant for the property. Said management agreement authorized Respondent to be compensated at the rate of

   10 percent of the rent due during each rental period.

   
   

7. On or about March 27, 2007, Respondent negotiated a lease agreement with Veronica Valcarcel to rent the Subject Propery.

8. The tenant applied through the federal Section 8 program, administered by the Orange County Housing and Community Development Division (Agency), for rental assistance in order to rent the Subject Property.

9. Section 8 assists low-income families with their rent.

   
   

   A tenant who qualifies for Section 8 assistance is prohibited from paying more than 40 percent of his or her income for rent and utilities.

10. On April 26, 2007, Respondent, acting on behalf of the landlord for the Subject Property, entered into and signed a “Housing Assistance Payment Contract” or “HAP” contract with the Agency as part of the Section 8 program. The HAP contract provided that for the initial lease term for the Subject Property (for the period April 1, 2007, until March 31, 2008), the initial monthly rent was $1,150 per month. This was determined to be the maximum payment the tenant could pay without exceeding 40 percent of her income.

11. The HAP contract explicitly provides in its terms that “[d]uring the initial lease term, the owner may not raise the rent to tenant.”

12. Respondent knew that he was prohibited from charging more than the monthly rent stated in the HAP contract.

13. Respondent has had experience in the past with other tenants who participated in the Section 8 program. Respondent has previously signed other HAP contracts which contained the same restrictive language.

14. Under the lease contract that the tenant Veronica Valcarcel signed with the property owner Jacqueline Danzer, the monthly rent would be $1,150 per month.

15. The signature page in the lease contract is not the same page on which the monthly rental amount is written.

16. The property owner Jacqueline Danzer asserts that the initials in the lease contract reflecting a monthly rental of

    $1,150 were not all her initials.

    
    

17. Under the terms of the Exclusive Property Management Agreement, Respondent was being compensated at the rate

    of 10 percent per month after the first month.

    
    

18. A monthly rental amount of $1,500 indicates that the property owner would receive a net of $1,350 per month.

19. The property management agreement provided that Respondent would make payments to the property owner by direct deposit.

20. The property management agreement lists a 12-digit bank account number, with the last four digits of “6034,” into which Respondent was to make direct deposits.

21. At the hearing, property owner Jacqueline Danzer testified that she had received payments from Respondent for the Subject Property to her Bank of America savings account, with the account number ending in “6034.” The last four digits of the account number on the Bank of America Statement match the last four digits on the account number found on the Property Management Agreement.

22. According to the Bank of America records, Respondent made the following payments to the property owner:

    a) $1,550 on May 9, 2007

    
    

    b) $1,000 on May 9, 2007

    
    

    c) $850 on June 12, 2007

    
    

    d) $1,350 on July 11, 2007

    
    

    e) $1,350 on September 10, 2007

    
    

23. On September 12, 2007, property owner, Jacqueline Danzer went to see Lois Henry, the manager of the Section 8 department for the Agency. During the course of that meeting,

    Dnazer advised that Respondent was collecting $1,500 a month rent from the tenant instead of $1,150 a month.

24. On September 12, 2007, during the course of a telephone conference with Jacqueline Danzer and Lois Henry, Respondent admitted that he had been collecting $1,500 monthly rent for the Subject Property, retaining a commission of $150 and depositing the balance in Danzer’s account.

25. Respondent denied making an admission during the telephone conference on September 12, 2007. He also denied that he was collecting $1,500 from the tenant, and further denied that he was violating Section 8 regulations. Respondent’s testimony is not credible.

26. The witness Danzer’s testimony is credible.

    
    

27. Petitioner has proven by clear and convincing evidence that Respondent violated the Housing Assistance Payments Contract.

28. The total amount of investigative costs for the Petitioner for this case, not including attorney’s time, were

    $874.50.

    
    

    CONCLUSIONS OF LAW

    
    

29. DOAH has jurisdiction over the parties and subject matter of this cause pursuant to Subsection 120.57(1) and Sections 120.569 and 120.60, Florida Statutes (2008).

30. Petitioner is the state agency charged with regulating the practice of real estate, pursuant to Section 20.165 and Chapter 475, Florida Statutes.

31. The Florida Real Estate Commission is empowered to revoke, suspend or otherwise discipline the license of a real estate broker who is found guilty of any of the grounds enumerated in Subsection 475.25(1)(b), Florida Statutes.

32. Petitioner has the burden to prove that relevant and material findings of fact are supported by clear and convincing evidence of record. Department of Banking and Finance v. Osborne Stern & Company, 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987).

33. Subsection 475.25(1)(b), Florida Statutes, states in pertinent part:

    1. The commission . . . may place a licensee . . . on probation; may suspend a license, registration, or permit for a period not exceeding ten years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $5,000 for each count or separate offense; . . .

       if it finds that the licensee . . .

       
       

       * * *

       
       

       (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 her or 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 or paid after discovery of the misconduct; or that such victim or intended victim was customer or a person in confidential relation with the licensee or was an identified member of the general public.

       
       

34. Petitioner has presented clear and convincing evidence that Respondent is guilty of violating Subsection 475.25(1)(b), Florida Statutes.

35. The credible evidence is clear and convincing that at the same time Respondent signed an agreement with the Agency, in regard to a Section 8 HAP Contract with a monthly rental amount of $1,150, he entered into a verbal side agreement with the tenant that the rent for that same property would be $1,500 per month. The mere fact that he had two different rental agreements at the same time for the same rental property is probative of dishonest dealings, violation of a contractual duty, and conspiracy to engage in such misconduct.

36. In addition, the HAP contract was clear that the rent could not be raised above $1,150 per month. The purpose of the

    HAP Contract was that the rent would not go above 40 percent of a tenant’s income. Anything above that amount would defeat the purpose of the Section 8 program.

37. The clear and convincing evidence supports the fact that Respondent was actually charging the tenant $1,500 a month rent for the Subject Property.

38. Property owner Danzer’s testimony is credible that Respondent told her the monthly rent would be $1,500 a month for the Subject Property. Henry’s testimony is also credible that Respondent confessed to her that he had been charging $1,500 a month on September 12, 2007. The details of this phone conversation on September 12, 2007, were corroborated by Danzer, who was present at the time.

39. Additionally, the testimony of Danzer and Henry are supported by Danzer’s bank records. For a monthly rent of

    $1,500 with Respondent receiving 10 percent commission, Danzer should have received $1,350. According to Danzer’s bank records, she did receive a couple of payments in the amount of

    $1,350, which is consistent with a $1,500 a month rental payment.

40. There were no payments received by Danzer that were consistent with an $1,150 per month rental figure.

41. Respondent misrepresented the amounts he was charging for rent. To the property owner, he misrepresented how much the

    Section 8 program was allowing him to charge for rent on the property. To the Section 8 program, he misrepresented how much rent he was actually charging the tenant.

42. In regard to the above-statutory prohibitions, the Commission’s disciplinary guidelines are codified in Florida Administrative Code Rule 61J2-24.001(1). These rules provide that the usual penalty for committing fraud, misrepresentation or dishonest dealing is revocation. The usual penalty for committing concealment, false promises or false pretenses is a three-to-five-year suspension and an administrative fine of

    $1,000. The usual penalty for committing culpable negligence or breach of trust is a $1,000 fine to a one-year suspension.

43. Although there was no evidence that Respondent had been previously disciplined, Petitioner’s proof, being clear and convincing, is therefore sufficient to justify the imposition of a penalty within the range of those provided for in the above- cited authority.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Business and Professional Regulation, Florida Real Estate Commission, enter a final order:

1. Finding Respondent guilty of violating Subsection 475.25(1)(b), Florida Statutes;

2. Revoking Respondent’s license, and imposing an administrative fine of $1,000.00; and

3. Requiring Respondent pay fees and costs related to the investigation in the amount of $874.50.

DONE AND ENTERED this 26th day of August, 2009, in Tallahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 2009.

ENDNOTE

1/ All references to Florida Statutes are to Florida Statutes (2006), unless otherwise indicated.

COPIES FURNISHED:

Ned Luczynski, General Counsel Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

Thomas W. O’Bryant, Jr., Director Division of Real Estate

400 W. Robinson Street, Suite 802N Orlando, Florida 32801

S. W. Ellis, Chairman Real Estate Commission Division of Business and

Professional Regulation

400 West Robinson Street, Suite 801N Orlando, Florida 32801

Jennifer Leigh Blakeman, Esquire Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N Orlando, Florida 32801

Anthony Alexander 1135 Calanda Avenue

Orlando, Florida 32807

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 09-000441PL

Orders for Case No: 09-000441PL