The Issue Whether Respondent acted as a real estate agent without being licensed in violation of section 475.42(1)(a), Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the administrative hearing, the following findings of facts are made: COMPLAINT This complaint was instituted when Mr. Manning became aware of a $250.00 payment to a Keller Williams real estate agent (KW agent). Upon inquiring, Mr. Manning was told the fee was to pay the KW agent for securing the third tenant of his rental property located at 12522 Belcroft Drive, Riverview, Florida (property). Mr. Manning was not informed that this process would be engaged, and he was caught off guard when the payment came to light. Mr. Manning was also concerned that he was not receiving consistent payments for the rental of his property. PARTIES Petitioner is the state agency charged with the responsibility of regulating the real estate industry pursuant to chapters 455 and 475. Petitioner is authorized to prosecute cases against persons who operate as real estate agents or sales associates without a real estate license. At all times material, Respondent was not a licensed real estate broker, sales associate or agent. Respondent is a co-owner of J & D Associates, a property management company that he owns with his wife, Ms. Woltmann. Additionally, J & D Associates was not licensed as a real estate broker, sales associate or agent. PARTICULARS In 2012, Mr. Manning was serving in the U.S. Air Force, and was stationed in the Tampa Bay area of Florida. At some point, Mr. Manning received military orders to report to Texas for additional cross-training. Mr. Manning wanted to sell his property, and he was referred to Ms. Woltmann, a Florida licensed real estate agent. Mr. Manning and Ms. Woltmann met and discussed the possibility of selling Mr. Manning’s property. Ms. Woltmann performed a market analysis and determined that Mr. Manning would have to “bring money” to a closing in order to sell his property. Mr. Manning made the decision that he would rent his property. Thereafter, Ms. Woltmann introduced Mr. Manning to Respondent. Mr. Manning assumed that Respondent was a licensed real estate agent. If he had known that Respondent was not a licensed real estate agent, Mr. Manning would not have hired Respondent. On or about April 26, 2012, Respondent executed a “Management Agreement”5/ (Agreement) with Mr. Manning, regarding his property. The Agreement provided in pertinent part the following: EMPLOYMENT & AUTHORITY OF AGENT The OWNER [Mr. Manning] hereby appoints J & D Associates as its sole and exclusive AGENT to rent, manage and operate the PREMISES [12522 Belcroft Drive, Riverview, Florida]. The AGENT is empowered to institute legal action or other proceedings on the OWNER’S behalf to collect the rents and other sums due, and to dispossess tenants and other persons from the PREMISES for cause. * * * RESPONSIBILITIES OF THE AGENT: In addition to the forgoing authorizations, the AGENT will perform the following functions on the OWNER’S behalf. Collect all rents due form [sic] the tenants. Deduct from said rent all funds needed for proper disbursements of expenses against the PROPERTY and payable by the OWNER, including the AGENT’S compensation. Collect a security deposit received from a tenant of the PROPERTY and place it into an escrow account as required by the laws of the State of Florida. COMPENSATION OF THE AGENT: In consideration of the services rendered by the AGENT, the OWNER agrees to pay the AGENT a fee equal to FIFTY PERCENT (50%) OF THE FIRST MONTH’S RENT AND ten percent (10%) per month of the monthly rent thereafter during the term of the tenancy as management fees for the PROPERTY. In the case of holding over the lease beyond the terms of the lease by the same tenant, the Fifty (50%) up front [sic] fee shall also be waived and only the TEN PERCENT (10%) per month fee shall apply. The Fifty (50%) fee shall apply to new tenants only. In the case of a tenant moving out within the first three months of the tenancy, then the fee for obtaining a new tenant and new lease shall be only FIFTEEN PERCENT (15%) of the first month’s rent from the new tenant and TEN PERCENT (10%) of the monthly rent thereafter. (Emphasis added via underline.) At various times, Respondent provided Mr. Manning a list of eligible tenants. Also, Respondent would provide his opinion as to who would be the best candidate to rent the property. Mr. Manning would, “nine times out of ten,” go with Respondent’s recommendation for the rental tenant. In June 2012, “Richard L. Sovich J & D Associates, Agent For Elijah Manning,” executed a “Residential Lease for Single Family Home and Duplex” with a tenant. On the signatory page, the following printed form language is found on the upper half of the page: This Lease has been executed by the parties on the date indicated below: Respondent’s signature is over the “Landlord’s Signature line, “As” “Agent.” On the lower half of the signatory page, the following printed form language is found; the handwritten information is found in italics: This form was completed with the assistance of Name Richard Sovich Address 1925 Inverness Greens Drive Sun City Center, Fl 33573-7219 Telephone No. 813/784-8159 Ms. Woltmann testified that she had a listing agreement for each time she listed Mr. Manning’s property for rent. With each listing agreement, Ms. Woltmann was able to list the property in the multiple-listing system (MLS)6/ while she was associated with the Century 21, Shaw Realty Group. The three listings, as found in Respondent’s composite Exhibit E, included (along with other information) the list date, a picture of the property taken by Ms. Woltmann, and the dates the property would be available: May 5, 2012, for the rental beginning on June 1, 2012, at $1,550.00 per month; November 1, 2012, for the rental beginning on December 1, 2012, at $1,550.00 per month; and March 14, 2014, for rental beginning on May 1, 2014, at $1,600.00 per month. Each time the property was rented, Ms. Woltmann changed the MLS listing to reflect the actual lease dates: June 16, 2012; December 13, 2012; and May 19, 2014, and each was rented at the monthly rental price listed. Ms. Woltmann claimed that the rental price had to be lowered for the second rental. However, the documentation that she confirmed she inputted into the MLS at the time the property was rented, reflects the rental price was not lowered during the second rental period.7/ The rental price was actually raised for the third rental period. Ms. Woltmann also claimed she procured the first two tenants for Mr. Manning’s property and waived (with the consent of her broker agent) her lease fee each time. Three years ago (2014) during the Manning lease periods, Ms. Woltmann “left abruptly” the real estate company she was working for and that company “is now closed.” Yet, she testified that those listing agreements “should be there” if she went back to her broker and asked for them. Based on inconsistencies in her testimony, Ms. Woltmann’s testimony is not credible. Mr. Manning received payments from Respondent for approximately three years totaling “about $45,000.” Mr. Manning paid Respondent “maybe four or five thousand dollars. Maybe a little bit less” for his service. Respondent admitted he received compensation from the rental of Mr. Manning’s property for approximately three years, but denied that he procured any tenants for the property. It is determined that the testimony of Respondent and his wife Ms. Woltmann, is not credible and persuasive. Neither can be considered “disinterested.” The testimony of Mr. Manning is more credible. As the investigator supervisor, Mr. McAvoy is knowledgeable about the purpose of conducting unlicensed activity investigations. Its purpose is “to investigate matters surrounding unlicensed activity within the real estate profession . . . so to protect the public from possible harm surrounding those transactions.” Each investigator is required to record the amount of time spent in an investigation. An investigation was undertaken regarding Mr. Manning’s complaint. Petitioner incurred $49.50 in investigative costs during this case.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission finding Richard Sovich in violation of section 475.42(1)(a), Florida Statutes, as charged in the Administrative Complaint; and imposing an administrative fine of $500, and $49.50 as reasonable costs. DONE AND ENTERED this 5th day of May, 2017, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK 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 5th day of May, 2017.
Findings Of Fact At all times pertinent to these proceedings, Respondent, Private Money Mortgage Company (PMMC), was a mortgage brokerage business in the State of Florida holding License Number HB592732699 that had been issued by Petitioner. At all times pertinent to these proceedings, Frank Donahue was a licensed mortgage broker in the State of Florida holding License Number HA267474770 that had been issued by Petitioner. The Department of Banking and Finance, the Petitioner in these proceedings, is the agency of the State of Florida charged with the responsibility of enforcing the provisions of Chapter 494, Florida Statutes. In 1985, Mr. and Mrs. A. Charles Cinelli bought a house in Palm Beach County, Florida, and moved from upstate New York to Palm Beach County, Florida. Respondent, Frank Donahue, assisted Mr. and Mrs. Cinelli in obtaining financing for the home the Cinellis purchased in Palm Beach, County. In connection with this 1985 transaction, Mr. Donahue forwarded to the Cinellis an "Exclusive Broker Agreement", which they executed and returned to him. Because this 1985 transaction involved a purchase, Mr. Donahue ordered an appraisal for this property and charged its cost as a part of the Cinelli's closing costs. Subsequent to that transaction, Mr. Donahue and his wife, Brenda, saw Mr. and Mrs. Cinelli at occasional social events. Franklin T. Smith is a certified public accountant who performed professional services for Mr. and Mrs. Cinelli and for Mr. and Mrs. Donahue. Mr. Smith referred the Cinellis to Mr. Donahue in 1985 and advised the Cinellis during the transaction that is the subject of this proceeding. Prior to December 2, 1988, Mr. Cinelli contacted several mortgage brokers in the Palm Beach County area to discuss the possibility of obtaining a mortgage on certain real property located in upstate New York. Mr. Cinelli contacted Mr. Donahue by telephone and discussed with him his desire to raise capital to begin a business in Florida. Mr. Cinelli estimated that he would require approximately $1,000,000 to start this business. Mr. Cinelli told Mr. Donahue that he and Mrs. Cinelli owned certain commercial real property in upstate New York and that State Farm Insurance Company held an option to purchase this property for the sum of $1,450,000. Mr. Cinelli did not want to wait to learn whether State Farm intended to exercise this option to purchase and he discussed with Mr. Donahue the possibility of obtaining the desired capital by securing a mortgage on this property. Mr. Donahue advised Mr. Cinelli that he could expect to secure a mortgage for approximately $700,000 (which was approximately 50% of the amount of the option contract) and that he would need a current appraisal. Mr. Donahue also informed Mr. Cinelli that he would require the sum of $2,500 as a non-refundable deposit to begin seeking such a commitment. On or about December 2, 1988, Mr. Cinelli provided Mr. Donahue with a copy of the option agreement with State Farm and with a copy of the agreement dated September 21, 1988, which extended the time within which State Farm could exercise its option for an additional six months. Mr. Cinelli reiterated to Mr. Donahue that the option price was for $1,450,000 and that he wanted to mortgage the property for $1,000,000. Mr. Cinelli also provided Mr. Donahue with the name, address, and telephone number of Mr. Wayne Lupe, who was represented by Mr. Cinelli to be his MAI appraiser in Schenectady, New York. On December 15, 1988, Mr. Donahue sent to Mr. Cinelli a letter which attached an "Exclusive Broker Agreement" that had been executed by Mr. Donahue on December 15, 1988. This was the same "Exclusive Broker Agreement" form that Mr. Donahue had used for the 1985 Cinelli transaction. The body of the letter provided as follows: Enclosed please find a copy of my exclusive brokers agreement detailing the probable terms of the loan which you are seeking. This agreement is the same agreement which you signed when you purchased your current resi- dence. The agreement calls for both you & Joan to sign and return along with a nonrefundable deposit in the amount of $2500.00 to Private Money Mortgage Corp. The above noted deposit shall be credited towards your closing costs at the time of closing, if a commitment is offered. I have spoken to several of my investors about your concerns and I am awaiting confirmation of their substantial interests prior to ordering the appraisal. I will contact you as soon as I have received the return of this agreement along with your deposit in order to fill you in on our efforts to secure you the most competitive loan on your desired terms. The Exclusive Broker Agreement reflected that the amount of the mortgage would be $700,000 and disclosed that the total estimated costs that would be incurred in securing the mortgage was $78,346, which included a broker's fee of $35,000 and an estimated appraisal fee of $3,500. The Exclusive Broker Agreement, signed by Mr. Donahue on December 15, 1988, contained the following provision: DEPOSIT: In consideration of the sum of $2,500, receipt of which is hereby acknowledged, and in compliance with Chapter 494, Florida Statutes, Broker accepts this application and agrees to exert his/her best effort to obtain a commitment for loan in accordance with the terms and conditions set forth herein. This deposit shall be credited toward closing costs at the time of closing the permanent loan or commitment, less Broker's expenses. Among the "Standards" which were incorporated as terms and conditions of the Exclusive Broker Agreement was the following: Deposit. Client simultaneously with execution of this agreement has deposited with broker the amounts stated in this agreement in order to secure the obligations owed by client to broker in the event of default of client as provided in the agreement and to reimburse broker of any and all expenses, including telephone charges, lodging, and administrative fees for credit checks and processing appraisals and the like, including upon any cancellation by client, reimbursement for broker's time expended incurred by broker, whether or not a loan commitment is obtained by broker. Mr. Cinelli was concerned that he would be incurring substantial fees and costs if Mr. Donahue obtained a commitment and Mr. Cinelli decided not to accept it. Mr. Smith advised Mr. Cinelli that the estimated expenses were not abnormally high, but he suggested that his liability should be limited. In response to those concerns, Mr. Donahue prepared and delivered between December 15, 1988, and the end of the year an addendum to the Exclusive Broker Agreement that would have limited Mr. Cinelli's liability to the sum of $7,500. That addendum provided, in pertinent part, as follows: It is hereby understood and agreed by the parties that in the event a loan commitment is offered to the applicants & they decide to refuse this commitment, the applicants liability will be limited to the sum of Five Thousand Dollars plus the original deposit of $2,500.00 for a total amount of $7,500.00. It is further understood that said commitment must bear approximately the same terms and conditions as the attached agreement. Mr. and Mrs. Cinelli gave Mr. Smith the sum of $2,500 in cash to deliver to Mr. Donahue, but there is conflicting testimony as to when this money was delivered to Mr. Smith for delivery to Mr. Donahue. Mr. Cinelli testified that the money was delivered before the Exclusive Broker Agreement dated December 15, 1988, was prepared. Mr. Donahue testified that the money was delivered after both the Exclusive Broker Agreement and the addendum thereto had been delivered to Mr. Cinelli. Mr. Donahue also testified that the statement contained in the Exclusive Broker Agreement that he signed on December 15, 1988, acknowledging his receipt of the $2,500 deposit was false. He did not explain why the addendum referred to the sum of $2,500 as "the original deposit". Mr. Smith did not recall when he delivered this money to Mr. Donahue, but he did recall having delivered the cash the same day he received it from the Cinellis. While his testimony is that he received the $2,500 during his initial meeting with Mr. and Mrs. Cinelli (which would be before Mr. Cinelli received the Exclusive Broker Agreement) this testimony lacks credibility because of Mr. Smith's lack of certainty as to dates. In addition, this testimony conflicts with the letter Mr. Smith wrote to Mr. Donahue at Mr. Donahue's request on August 28, 1989, which clearly indicates that the $2,500 was not paid until after the addendum to the Exclusive Broker Agreement had been prepared. This conflict is resolved by finding that the greater weight of the evidence establishes that the sum of $2,500 was delivered by Mr. Smith to Mr. Donahue after Mr. Cinelli had received both the Exclusive Broker Agreement and the addendum thereto. Mr. Donahue did not provide the Cinellis with any type of written agreement, other than his letter of December 15, 1998, the Exclusive Broker Agreement, and the addendum when he received the cash from Mr. Smith. There was no written receipt for these funds, nor was there any written memorandum of understanding between Mr. Donahue and the Cinellis as to whether payment for the appraisal that Mr. Donahue and Mr. Cinelli had discussed would be made from the $2,500. Mr. Cinelli was of the belief that $2,000 of the $2,500 deposit would be earmarked for the payment of the appraisal. Mr. Donahue was of the belief that the $2,500 was a non-refundable retainer and he treated that sum as an earned fee. There was no meeting of the minds between Mr. Cinelli and Mr. Donahue as to the nature of the $2,500 deposit, other than it was non-refundable. Specifically, there was no agreement as to what costs, if any, would be paid from that deposit. Mr. Donahue's normal business practice in transactions involving a refinance of property is different than his practice in transactions involving a purchase of property. In purchase transactions (such as the 1985 Cinelli transaction), Mr. Donahue arranges for the appraisals and treats the costs of the appraisal as an expense to be paid by the purchaser at closing. In refinance transactions (such as the 1988 Cinelli transaction), it is his practice to require his customer to deal directly with the appraiser in ordering and paying the costs of the appraisal. Respondents failed to establish that in the subject transaction, Mr. Donahue made it clear that Mr. Cinelli would be responsible for ordering and paying the cost of the appraisal. Mr. Cinelli believed that $2,000 of the $2,500 he later gave Mr. Donahue would be earmarked for the payment of the appraisal. Neither Mr. Donahue's letter of December 15, 1998, the Exclusive Broker Agreement, nor the addendum clearly resolved the dispute. There was a dispute between Mr. Donahue and Mr. Cinelli as to who ordered the appraisal. Mr. Cinelli denied that he ordered the appraisal and that his calls to his appraiser, Mr. Lupe, was only to advise him of Mr. Donahue's forthcoming call. Mr. Donahue denied that he ordered the appraisal and that his contacts with Mr. Lupe were after Mr. Cinelli had ordered the appraisal. Mr. Donahue contends that his contacts with the appraiser were merely to give the appraiser instructions as to the information that should be reflected by the appraisal. This dispute is resolved by finding that Mr. Cinelli ordered the appraisal through Mr. Lupe and that Mr. Donahue advised Mr. Lupe as to the information that should be reflected by the appraisal. It was determined from conversations between Mr. Donahue and Mr. Lupe that Mr. Lupe was not qualified to perform the appraisal and that Mr. Lupe would engage Albert L. Friedman, MAI and William J. McEvoy of Capitol Real Estate and Appraisal Company of Schenectady, New York, on Mr. Cinelli's behalf to perform the work. Messrs. Friedman and McEvoy prepared the appraisal and certified the same to Mr. Cinelli on March 13, 1989. The appraised value of the property was $2,100,000. As of the date of the formal hearing, the appraiser's bill of $2,000 had not been paid. Capitol Real Estate and Appraisal Company had billed both Mr. Donahue and Mr. Cinelli and an attorney representing Capitol Real Estate and Appraisal Company had written Mr. Cinelli a demand letter. It was the dispute over the payment of the appraiser's fee that prompted the complaint the Cinellis filed against Respondents. The Cinellis did not execute the Exclusive Broker Agreement and the addendum because they wanted to wait on the appraisal to see if the appraised value would permit them to borrow more than $700,000 and because they were not satisfied with the amount of the projected costs of consummating the transaction. Mr. Cinelli misled Mr. Donahue as to his intentions to execute these agreements. Mr. Donahue made several requests to the Cinellis that they execute the Exclusive Broker Agreement and addendum and return them to him. Despite the absence of an executed brokerage agreement, Mr. Donahue exerted considerable effort to seek a commitment consistent with the Exclusive Broker's Agreement and succeeded in securing such a commitment in April 1989. No part of the $2,500 Mr. Donahue received from Mr. Smith on behalf of the Cinellis was placed in escrow by Mr. Donahue. Respondents have made no accounting of the $2,500 and have paid no part of the appraisal bill. Mr. Donahue claims the deposit as a non-refundable earned fee, despite the absence of a written agreement to that effect. The Cinellis sold the subject property to State Farm in June 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered by Petitioner which finds: that Respondents violated the provisions of Rule 3D-40.006(5), Florida Administrative Code, by accepting the $2,500 deposit from the Cinellis without a written agreement as to the disposition of those funds; that Respondents violated the provisions of Section 494.055(1)(e), Florida Statutes, and Rule 3D-40.006(6)(a), Florida Administrative Code, by failing to place said deposit in escrow; and that Respondents violated the provisions of by Section 494.055(1)(f), Florida Statutes, by failing to account for said deposit. It is further recommended that an administrative fine be levied against Respondents in the total amount of $1,000.00 for said violations. It is further recommended that the final order place the licenses of Respondents on probation for a period of one year with three special conditions of probation. The first special condition of probation would require Respondents to pay Capitol Real Estate and Appraisal Company the sum of $2,000 within sixty days of the Final Order. The second special condition of probation would terminate Respondents' probation upon timely compliance with the first special condition of probation. The third special condition of probation would prohibit Respondents from conducting any business as mortgage brokers within the State of Florida for a period of six months should Respondents fail to timely comply with the first condition of probation. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th day of January, 1991. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-4708 The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraphs 1, 3-10, and 13 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 2 and 11 are adopted in part by the Recommended Order, and are rejected in part as being contrary to the findings made. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order, and are rejected in part as being argument. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraphs 1-3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraphs 4-6, 14, and 17 are rejected as being subordinate to the findings made. The proposed findings of fact in paragraph 7 are adopted in part by the Recommended Order. The characterization of the Cinellis having a "long standing relationship" with Mr. Donahue is rejected as being ambiguous and unnecessary to the conclusions reached. The proposed findings of fact in paragraph 8 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraphs 9-11 are adopted in part by the Recommended Order, but are rejected to the extent that they are subordinate to the findings made. The proposed findings of fact in paragraphs 12 and 13 are rejected as being recitation of testimony or as being subordinate to the findings made. The proposed findings of fact in paragraph 15 are rejected as being subordinate to the findings made or as being contrary to the findings made or to the conclusions reached. The proposed findings of fact in paragraph 16 are adopted in part by the Recommended Order, and are rejected in part as being unnecessary to the conclusions reached. COPIES FURNISHED: Deborah Guller, Esquire Office of the Comptroller 111 Georgia Avenue, Suite 211 West Palm Beach, Florida 33401-5293 Marie A. Mattox, Esquire Douglass, Cooper, Coppins & Powell Post Office Box 1674 Tallahassee, Florida 32302-1674 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel The Capitol Plaza Level, Room 1302 Tallahassee, Florida 32399-0350
Findings Of Fact Petitioner is the state licensing regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated pursuant thereto. During times material, Respondent was a licensed real estate salesman in Florida, having been issued license number 0319604. The last license issued Respondent was as a salesman, c/o Referral Realty Center, Inc. (herein Referral) at 8974 Seminole Boulevard, Seminole, Florida. On December 1, 1988, Respondent entered into a management agreement with Madeira Beach Yacht Club Condominium Association, Inc. (herein Madeira) to serve as property manager. Respondent assumed the property manager position with Madeira in June of 1987, which was formalized by a written agreement in December 1988. While acting as property manager for Madeira, Respondent handled the rental transactions of individual units for owners. In return for her services, Respondent was compensated based on a commission of 10% to 20% of the monthly rental. On at least one occasion, Respondent rented an individual unit for owners for a term greater than one year. Respondent was aware that she was renting the one unit for a term in excess of one year. Respondent signed leases for units belonging to individual owners as the rental agent or representative. Respondent used the commissions that she received to defray operating expenses for her rental business such as cleaning fees for the units and for personal compensation. Respondent maintained a bank account at the First Federal of Largo Savings and Loan Association entitled "Dorothy K. Livingston Rental Account" for her rental business. Deposits to that account were rental monies received from tenants from which disbursements were made to unit owners and the remaining commissions went to Respondent as compensation. The rental account maintained by Respondent was neither an account with her employing real estate broker, nor was it an escrow account. Respondent placed security deposits that she received from tenants in the referenced rental account that she maintained. Respondent did not inform her employing broker of the receipt of security deposits nor did she discuss with her employing broker any of her activities involving rental of units for owners at Madeira. However, there is credible testimony evidencing that her broker was knowledgeable of Respondent's activities relative to her rental of units for owners. During May 1989, Respondent placed her real estate license with Referral Realty Center (Referral) as her employing broker. She did so in order to receive payment for referring prospects to Referral. On or about May 22, 1989, Respondent entered into an independent contractor agreement with Referral. That agreement provided in pertinent part that: Independent contractor agrees that Independent contractor will not list any real estate for sale, exchange, lease or rental... . Independent contractor agrees to refer all prospective clients, customers, buyers and sellers of which Independent contractor becomes aware to the Center... . Independent contractor agrees that so long as this Agreement is in force and effect the Independent contractor will not refer any prospective seller or buyer to another real estate broker... . 9. Independent contractor agrees to act, and to represent that he or she is acting solely as a referral associate of the Center... . While employed by Referral, Respondent also received commissions from individual unit owners at Madeira. During the time when Respondent had her license listed with Referral, she also received commissions from Referral for prospects she generated while renting units for owners and acting as property manager at Madeira. Respondent received a copy of a letter from attorney R. Michael Kennedy, addressed to J.L. Cleghorn of Building Managers International, Inc., dated September 5, 1989. In that letter, attorney Kennedy expressed his opinion that condominium or cooperative managers are exempted from the licensing provisions of Chapter 475, Florida Statutes, and that receipt of a percentage of rental proceeds would not be precluded even if the manager was salaried. The Kennedy letter erroneously states support for attorney Kennedy's opinion by Alexander M. Knight, Chief of the Bureau of Condominiums, and Knight so advised attorney Kennedy of that erroneous support by a subsequent letter to him. It is unclear to what extent Respondent apprised attorney Kennedy as to the specifics of her activities and to what extent she relied on his opinion prior to engaging in her property manager's rental and referral activities. (Petitioner's Exhibit 7.) Respondent did not seek advice from Petitioner as to whether her activities fell within the guidelines of Chapter 475, Florida Statutes. Respondent is familiar with the statutory definitions of a broker and salesman and what activities constitute brokerage and sales activities. During times material, Respondent's employing broker, David Hurd, was a licensed real estate broker in Florida, and the broker of record for Referral for procuring prospects and making referrals of real estate activities. Employment under an independent contractor agreement is considered employment under Chapter 475, Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a Final Order imposing an administrative fine against Respondent in the amount of $1,500.00, issue a written reprimand to her, place her license on probation for a period of one (1) year with the further condition that she complete 60 hours of continuing education. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1991. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jerry Gottlieb, Esquire GOTTLIEB & GOTTLIEB, P.A. 2753 State Road 580, Suite 204 Clearwater, Florida 34621 Darlene F. Keller, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Mini-Warehouses At Kendall, Ltd., d/b/a A+ Mini-Storage (Petitioner) is a business located in Dade County, engaged primarily in the rental of storage space. Petitioner employs 20 to 21 employees and has been operating for 13 to 14 years. Petitioner's property on which its business is located consists of approximately four acres and abuts property owned by the Florida Department of Transportation (Respondent), known as Parcel 0739, which contains approximately .0986 acres. On June 28, 1985, Petitioner executed a written lease agreement leasing Parcel 0739 from Respondent. The lease terms provided that it was a year-to- year lease, automatically renewable yearly until terminated by either party upon a 30-day notice, and that the yearly rental cost was $2,400 plus tax. Petitioner leased Parcel 0739 from Respondent because the parcel provides better access to Petitioner's property from the rear and prevents water from encroaching onto Petitioner's property. The same lease agreement was renewed yearly until 1991. In 1991, prior to the expiration of the lease, Respondent notified Petitioner that a new lease form would have to be executed. Respondent provided Petitioner with its Lease Agreement Form 225-080-03, OGC-00031, dated 7/92 (Form Lease) for execution. The Form Lease was developed by Respondent's Office of General Counsel and the General Counsel of each of its Districts, so that there would be a standard lease form statewide with minimal review by Respondent. The Form Lease contains blanks to be completed by Districts to comport with their specific situations. The Form Lease dramatically changed the terms and conditions of leasing Parcel 0739. Petitioner attempted to modify Paragraphs 6 and 8 of the Form Lease, but Respondent refused to agree to any modifications. Paragraph 6 of the Form Lease provides: 6. Indemnification. Lessee shall indemnify, defend, save and hold Lessor, its agents and employees, harmless of and from any losses, fines, penalties, costs, damage, claims, demands, suits and liabilities of any nature, including attorneys fees (including regulatory and appellate fees), arising out of, because of, or due to any accident, happening or occurrence on the leased land or arising in any manner on account of the exercise or attempted exercise of Lessee's rights hereunder, whether the same regards person or property of any nature whatsoever, regardless of the apportionment of negligence, unless due to the sole negligence of Lessor. Lessee's obligation to indemnify, defend, and pay for the defense or at the Department's option, to participate and associate with the Department in the defense and trial of any claim and any related settlement negotiations, shall be triggered by the Department's notice of claim for indemnifica- tion to Lessee. Lessee's inability to evaluate liability or its evaluation of liability shall not excuse Lessee's duty to defend and indemnify within seven days after such notice by the Department is given by registered mail. Only an adjudication or judgment after the highest appeal is exhausted specifically finding the Department solely negligent shall excuse performance of this provision by Lessee. Lessee shall pay all costs and fees related to this obligation and its enforcement by the Department. Department's failure to notify Lessee of a claim shall not release Lessee of the above duty to defend. Under Paragraph 6, Respondent intended to limit lessee's liability to its (lessee's) own negligence or damages it causes. Paragraph 8 of the Form Lease provides: 8. Eminent Domain. Lessee acknowledges and agrees that its relationship with Lessor under this Lease is one of Landlord and Tenant and no other relationship either expressed or implied shall be deemed to apply to the parties under this Lease. Termination of this Lease for any cause shall not be deemed a taking under any eminent domain or other law so as to entitle Lessee to compensation for any interest suffered or lost as a result of termination of this Lease, including but not limited to (i) any residual interest in the Lease, or (ii) any other facts or circumstances arising out of or in connection with this Lease. Lessee hereby waives and relinquishes any legal rights and monetary claims which it might have for full compensation, or damages of any sort, including but not limited to special damages, severance damages, removal costs or loss of business profits resulting from its loss of occupancy of the leased property specified in this Agreement, or adjacent properties owned or leased by it, when any or all such properties are taken by eminent domain proceedings or sold under the threat thereof. This waiver and relinquishment applies whether (i) this Lease is still in existence on the date of taking or sale; or, (ii) has been terminated prior thereto. Under Paragraph 8, Respondent did not intend for the lessee to waive any of its eminent domain rights or relinquish such rights subsequent to the termination of the lease, which would be improper. Presently, Respondent refuses to lease the Parcel to Petitioner unless Petitioner executes the Form Lease without modification. However, at hearing Respondent admitted that it has no intention of requiring Petitioner to agree to Paragraph 8 of the Form Lease. Rule Chapter 14-19, Florida Administrative Code, sets forth Respondent's rules on right-of-way property management. Rule 14-19.002 provides that the purpose of Chapter 14-19 is to set forth standardized methods for, among other things, the leasing of surplus property owned by Respondent. In 1992, the Form Lease was incorporated by reference in Rule Chapter 14-19. Rule 14-19.0012 specifically provides that the Form Lease is one of the forms incorporated by reference in and made a part of Chapter 14-19. Moreover, Rule 14-19.013 requires the Form Lease to be used for short term leasing. Chapter 14-19 is silent as to whether the Form Lease must be used in any of Respondent's other lease situations. Rule 14-19.013, Florida Administrative Code, does not apply to the circumstances of this case. Respondent has a Right Of Way Manual (Manual) for statewide use. Chapter 10, Section 6 of the Manual, entitled "Right of Way Property Leases" and effective January 21, 1993, provides in its "Purpose" section that the purpose of Section 6 is to establish uniform procedures for leasing property owned by Respondent. Also, the Manual's "Procedure" section mandates the use of the Form Lease for all of Respondent's leases. Prior to this mandate, Respondent had no standard lease form for its leases. In October 1992, Respondent required the Form Lease to be used in surplus property leases. The Form Lease is applicable statewide and implements procedures and policies involved in leasing surplus property. Parcel 0739 is considered by Respondent to be surplus property. The Manual is silent as to whether the Form Lease may be modified. Since the implementation of the Form Lease for surplus property, Respondent's District Offices have modified the Form Lease but rarely. In the rare instances when modification has been made, it has been on a case-by-case basis and only with approval of the District General Counsel. Respondent's Office of the Right-Of-Way Administrator under which the responsibility for leasing falls has no authority to approve or disapprove modifications made to the Form Lease by District Offices. However, Respondent's Office of General Counsel does have such authority, but it has not exercised its authority in any of the District situations in which the Form Lease has been modified. Even though there have been modifications to the Form Lease by Respondent's District Offices, although rare, no District Office has modified Paragraphs 6 or 8. Respondent admits that Petitioner has standing in this proceeding.
The Issue Whether the Respondent's real estate broker's license should be suspended, revoked, or otherwise disciplined based upon alleged violations of Chapter 475, Florida Statutes.
Findings Of Fact The Respondent, Peter H. Bos, Jr., is a licensed real estate broker in the State of Florida, holding License Nos. BK 0225668 and 0189099. He is the registered broker for Bos Realty Company, Inc., and Sandestin Realty, Inc. Bos Realty, Inc., and Sandestin Realty, Inc., are registered real estate brokerage companies. The Respondent is also the Chairman of the Board and Vice President of Sandestin Corporation, Inc. ("Sandestin") . Sandestin is not a real estate brokerage company and does not engage in any real estate business regulated under Chapter 475, Florida Statutes. Sandestin is a licensed hotelier. In 1987, Sandestin ceased acting as the management company of Sandestin Resort. Sandestin Corporation instead became a company which operated a hotel. In order to obtain rooms for its hotel operation, the corporation entered into leases with various local condominium owners, including Sandestin Resort unit owners. These leases were entered into under a landlord and tenant contract and not a management contract. The landlord and tenant contract did not establish any fiduciary relationship between Sandestin Corporation, Respondent, or the landlord/unit owner. Similarly, the landlord and tenant agreement did not establish any escrow relationship between Sandestin Corporation, Respondent, or the landlord/unit owner. During this time, the leasehold agreement did contain two typographical errors. One error, committed by the law firm who drafted the agreement, placed Sandestin Realty's name over the signature block at the end of the contract. The other error was contained in an exhibit to the contract and listed Sandestin Realty in its title. All of the typographical errors were discovered and corrected by 1988. None of the errors materially effected the understanding of the parties as to who those parties were or the relationship they had. In reality none of the parties involved in the contracts containing the typographical errors noticed either fallacy. Around May 22, 1987, Margaret Irwin purchased a unit from Sandestin Realty Company, Inc. She signed a landlord and tenant agreement dated March 25, 1987, between herself, as landlord, and Sandestin Corporation, Inc., as tenant. Although Ms. Irwin was somewhat confused about the exact relationship between the parties, the contract she signed was plain on its face and unambiguous in its language that the agreement she was entering into was a leasehold agreement with her as a landlord and Sandestin Corporation as a tenant. Ms. Irwin's confusion appeared to result from assumptions that emanated from her own mind. The evidence did not establish that any representation was made either on behalf of or by Respondent that the lease agreement was other than what it purported to be. Moreover, the evidence did not establish that Ms. Irwin's confusion was caused by any actions of Respondent or any of the typographical errors which were in the agreement at the time Ms. Irwin signed it. Up until 1989, Ms. Irwin received all of the lease payments she was entitled to receive under the lease agreement. In 1989, Sandestin Corporation experienced financial difficulties. Beginning in August 1989, Sandestin Corporation, on the advice of its attorneys, did not make the agreed upon lease payments to Ms. Irwin as well as other unit owners from which it had leased units. All of the unit owners's including Ms. Irwin, were made aware of Sandestin Corporation's financial difficulties in a letter dated October, 1989. Ms. Irwin elected to terminate her lease agreement with Sandestin Corporation and demanded the back rant which was owed to her. The back rent remains unpaid to this date. In late 1989, Sandestin Corporation filed for a Chapter 11 bankruptcy. That bankruptcy is ongoing today. The unit owners who elected to continue leasing their units to Sandestin Corporation have begun to receive incremental payments on the back rent owned to them by a special order of the bankruptcy court. Importantly, all of the unit owners, including Ms. Irwin, were treated as landlord/creditors of Sandestin Corporation. The money owed to these unit owners has been treated as property of Sandestin Corporation and therefore part of the bankrupt's estate. The money was not treated as property being held by Sandestin Corporation on behalf of and as fiduciary for these various unit owners. There was absolutely no clear and convincing evidence presented of any fraud, misrepresentation, scheme, trick, or device, or breach of trust on the part of Respondent. The language of the lease agreement is plain on its face and clearly establishes a landlord and tenant contract. The agreement did not establish any fiduciary or escrow relationship. Additionally, Respondent's duties in relation to Sandestin Corporation were not those which involved any real estate duties regulated by Chapter 475, Florida Statutes. Therefore, Respondent is not guilty of violating any of the provisions of 475.25(1)(b), (d), or (k), Florida Statutes.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, the pleadings and argument of the parties, it is therefore, RECOMMENDED that the Board enter a Final Order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 30th day of January 1991. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of January 1991. APPENDIX The facts contained in paragraphs 2, 3, 4, 5, 6, 12, 13, 14, 15, 24, 26, 26, and 30, of Petitioner's Proposed Findings of Fact are adopted. The facts contained in paragraphs 1, 7, 8, 9, 10, 11, 18, 20, 21, 22, 31, 32, 33, 34, and 35 of Petitioner's Proposed Findings of Fact are subordinate. The facts contained in paragraphs 16, 17, 19, and 28, of Petitioner's Proposed Findings of Fact are immaterial. The facts contained in paragraphs 23, 25, 29, and 36 of Petitioner's Proposed Findings of Fact were not shown by the evidence. The facts in paragraphs 1, 2, 3, and 4 of Respondent's Proposed Findings of Fact are adopted. COPIES FURNISHED: Janine B. Myrick, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 E.C. Kitchen, Esquire Post Office Box 1854 Tallahassee, Florida 32302-1854 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact On or about July 7, 1967, Raymond M. Tonks leased certain property located in Dade County, Florida, from E. L. Phillips, Jr. and Ruth P. Phillips. A copy of the lease executed by the Phillipses as Lessors, and Tonks as Lessee, was received in evidence at the hearing as Petitioner's Exhibit 2. The property is described in the lease. The term of the lease was a period of five years, commencing from the date, of execution. The Lease Agreement contained an option to purchase which could be exercised by the Lessee at any time during the term of the lease. On or about July 25, 1972, the Phillipses and Tonks entered into a Lease Extension Agreement, which extended the terms of the previous lease agreement through July 9, 1975. A copy of this agreement was received in evidence as Petitioner's Exhibit 3. The Lease Extension Agreement explicitly included the option to purchase. On or about May 6, 1975, Tonks and the Petitioner entered into an agreement which they styled "Assignment of Lease". A copy of this agreement was received in evidence as Petitioner's Exhibit 1. Through the Assignment of Lease, Tonks assigned all of his interest in the earlier lease and Lease Extension Agreements to the Petitioner. Tonks explicitly warranted in the agreement that the option to purchase could be exercised by the Petitioner. The term of the lease in the Lease Extension had approximately two months to run at the time that Tonks and Petitioner entered into the agreement. Petitioner paid $275,000 for the interests that it received from Tonks. See: Petitioner's Exhibit 4. Tonks took a promissory note for a substantial portion of the purchase price. See: Petitioner's Exhibit 5. Petitioner placed no documentary stamp tax or documentary surtax stamps on the Assignment of Lease. Petitioner executed the option to purchase shortly after it received the Assignment of Lease from Tonks. The sale transaction between the Petitioner and the Philipses was closed on August 8, 1975. See Petitioner's Exhibit 6 and 7. The Respondent took the position that the documentary stamp tax and surtax stamps should have been placed on the "Assignment of Lease" so, as to reflect a $275,000 consideration. Accordingly the Respondent issued a Proposed Notice of Assessment of Tax and Penalty to the Petitioner on October 23, 1975. The proposed assessment included a penalty in the amount of the total taxes which Respondent contended were due. By letter dated December 11, 1975 from a representative of the Respondent to counsel for the Petitioner, the Respondent stated that the assessment was made against the assignment of lease and not against the option to purchase contained within the lease. Petitioner filed this action in order to contest the validity of the assessment. Petitioner contends that the consideration paid to Tonks was for the option to purchase, rather than for the assignment of lease. Respondent contends that the largest possible consideration that could be attributed to the assignment of lease is the amount of rent that would have been due under the lease for the unexpired term of the lease.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
The Issue Whether Respondent, Brenda W. Smith, violated sections 475.25(1)(b) and 475.25(1)(d)1., Florida Statutes (2013),1/ as alleged in the Administrative Complaint and, if so, what is the appropriate penalty.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute real estate licensees, pursuant to section 20.165 and chapters 120, 455, and 475, Florida Statutes. Respondent is licensed by Petitioner as a real estate broker in the state of Florida, license BK 534400. Respondent’s address of record with Petitioner is Post Office Box 15453, Panama City, Florida 32406. Respondent’s brokerage, Spirits Realty, Inc., is a registered for-profit corporation in the state of Florida with its principal place of business listed as 3812 Dolphin Drive, Panama City Beach, Florida 32408, and a mailing address listed as Post Office Box 15453, Panama City, Florida 32406. On May 31, 2012, Respondent, on behalf of her brokerage, Spirits Realty, Inc., entered into a property management agreement (Property Management Agreement) with Ronald W. Roberts to manage the rental of Mr. Roberts’ property located at 3803 Long John Drive, Panama City Beach, Florida 32408.3/ The term of the Property Management Agreement was for one year, beginning May 31, 2012, and provided: THIS PROPERTY MANAGEMENT AGREEMENT is made on the 31st day of May 2012 and is effective 31 May 2012 by and between Ronald W. Roberts whose address is 3555 Walden Land, Acworth, Ga 30102, hereinafter referred to as “Owner” and SPIRITS REALTY INC., BRENDA SMITH, LICENSED REAL ESTATE BROKER, Post Office Box 15453, Panama City, Florida 32406, hereinafter referred to as “Agent”. WITNESSETH in consideration of the mutual promises and covenants herein contained, the Owner and Agent agree as follows: The Owner represents to the Agent as follows: (a) The Owner is the sole owner and holder of marketable record title to the following described property: 3803 Long John Drive, Panama City Beach, Florida 32408. The Owner hereby appoints the Agent as the sole and exclusive Agent to Lease and manage the premises known as 3803 Long John Drive. This Agreement is for 1 year beginning 31 May 2012. Agent to enter into an agreement for 1 year lease, $1000 per month rental, tenant to pay Jun/July rent in advance (non-refundable); & $1000 security deposit. The owner agrees to the following: Spirits Realty Inc. Commission of 10% of the rents collected in each calendar month (which shall be deducted from rents collected each month). Spirits Realty Inc., Hancock Bank, holds the security deposit (for liquidated damages) and advanced last months [sic] rent in Escrow. If Agent is not available, Jesse Smith, Admin, is authorized signer. 4. [sic] Owner authorizes the broker to secure tenant; and enter into a 1 year lease. Manage tenant relations collecting, give receipts, holding and disbursing rents to owner, serving notices, initiating eviction & damage actions. Agent will receive and forward $2500 check from tenant to Ron Roberts, for sale agreement of furniture and furnishings, on site. The Property Management Agreement was signed by Ronald W. Roberts and notarized in Cherokee County, Georgia, on May 31, 2012. Notably, the Property Management Agreement does not require advanced notice on the part of the Owner to terminate the Property Management Agreement. On May 31, 2012, Respondent and/or Spirits Realty Inc., ostensibly acting on behalf of Mr. Roberts, entered into a four- page residential lease agreement drafted by Respondent (Lease) with Allen Pridgen and Lori Roark (n/k/a Lori Pridgen), as tenants, for the rental of Mr. Roberts’ property located at 3803 Long John Drive, Panama City Beach, Florida 32408 (the Premises). The term of the Lease was for one year, from June 1, 2012, through June 30, 2013. Curiously, instead of naming Mr. Roberts as the lessor, the first sentence on the first page of the Lease names “Spirits Realty Inc., Brenda Smith, Lic. Real Estate Broker, Agent” as “Lessor.” The bottom of the first page of the Lease states “Page 1 of 1.” In addition, page four of the Lease submitted by Respondent as part of her Exhibit R-7 (which page was not included in the copy of the Lease submitted by Petitioner as part of Exhibit P-2) is signed by Respondent and Spirits Realty, Inc., on and below the signature line labeled “Lessor,” respectively. By comparing the signatures of the “Lessees” on the last page of the Lease (page four) with the signatures on the exhibit entitled “Security Deposit/Advance Last Months [sic] Rent Receipt” (Deposit Receipt), it is apparent that Allen and Lori Pridgen both signed page four of the Lease on May 31, 2012, as Lessees. As documented by the Deposit Receipt, on May 31, 2012, Respondent collected from Allen and Lori Pridgen a $1,000 cash security deposit, plus $1,000 as the last month’s rental payment under the Lease. The Deposit Receipt, signed by both of the Pridgens, as well as Respondent, provides that the monies collected would be held in a “non-interest bearing account Spirits Realty, Inc. Escrow” with Hancock Bank in Panama City Beach, Florida. Mr. Roberts signed a typed statement on May 31, 2012, printed on paper with a fax number, date, and time in the top margin, stating: “The four page Residential Lease on Long John Drive, Panama City Beach, Florida, is hereby agreed upon and approved by the property owner Ronald W. Roberts.” The next year, Respondent prepared a document entitled “Lease Renewal Agreement” (Lease Renewal) for renewal of the Lease for another seven months, from June 1, 2013, to January 1, 2014. The initial paragraph of the Lease Renewal listed the parties as: Lessor4/: Allen Pridgen & Lori [Pridgen] Agent: Spirits Realty Inc., Lic. Real Estate Broker The Lease Renewal kept all terms of the Lease in effect and provided that the Security Deposit and last month’s rent would continue to be held in Hancock Bank. The Lease Renewal also stated: That tenants shall pay a monthly rental of $1,000 for each month by the 1st of each month to Spirits Realty, Inc., for the Renewal Term. Tenants agree to give 60 days written notice prior to vacating property, Or give notice of intent to renew lease for up to one year. According to dates next to their signatures, the Lease Renewal was signed by Alan and Lori Pridgen on May 30, 2013; by Brenda Smith for “Spirits Realty Inc and Brenda Smith, Lic Real Estate Broker” on May 31, 2013; and by Dorothy and Ronald Roberts as “Property Owner” on June 4, 2013. In late 2013, the Roberts decided to terminate the Property Management Agreement and manage the rental of the Premises themselves. The decision to terminate the agreement was made a short time after the tenants had a problem with a water leak and a faulty water heater. Because the tenants considered the problem to be an emergency, they dealt directly with the Roberts, who, as owners, authorized the tenants to pay for the required repairs directly and take the payment off the rent. On December 1, 2013, Mr. Roberts spoke to Respondent on the telephone and advised her that the Roberts no longer wanted to use Respondent’s brokerage, Sprits Realty, Inc., for property management services and that they were going to terminate the Property Management Agreement. Ms. Roberts was present with her husband during the telephone conversation and overheard the discussions. During the conversation, Respondent told Mr. Roberts that they needed to give her at least a 60-day notice of termination, and Mr. Roberts advised Respondent that their termination of the Property Management Agreement would be effective February 1, 2014. The next day, December 2, 2013, the Roberts sent a letter by certified mail to Respondent, at her address, and to Spirits Realty, Inc., at its address. The letter was signed by both Mr. and Ms. Roberts, witnessed and notarized, and stated: Dear Mrs. Smith, Per our conversation on December 1, 2013, please accept this letter as a 60 day formal notification that we wish to terminate the contract we currently have with Spirit Realty for Property Management Services. As of 2/1/2014, we will no longer require your services in handling the property management for 3803 Long John Drive, Panama City, Florida, 32408. Please forward the security deposit that you collected from the tenant, Alan Pridgen in 2012 and are currently holding in an escrow account. You can mail it to Ronald & Dorothy Roberts at 3555 Walden Lane, Acworth, Georgia 30102. We appreciate your time and services since Mr. Pridgen began occupying the property. Although multiple attempts were made to deliver the letters, they were returned unaccepted. The Roberts made additional attempts to contact Respondent by telephone, but were unable to do so. By another letter sent by certified mail to Respondent dated January 16, 2014, Mr. and Ms. Roberts again requested in writing that Respondent forward to them the $2,000 identified in the Deposit Receipt. The letter reiterated the fact that in a telephone conversation on December 1, 2013, Respondent was advised that the Roberts were terminating the Property Management Agreement. The letter was returned unaccepted. Although the Roberts letters to Respondent dated December 1, 2013, and January 16, 2014, were returned unaccepted, Respondent’s own exhibit, a copy of a certified letter that Respondent allegedly sent to the tenants on December 11, 2013, acknowledges that Mr. Roberts called on December 1, 2013, regarding both the Lease and the Property Management Agreement. The first paragraph on the third page of Respondent’s December 11, 2013, letter to the tenants states: 1 Dec 2013 Ron Roberts called SRI [Spirits Realty, Inc.] agent saying Alan [Pridgen] paid over $900 in improvement costs having to do with the air conditioner and hot water heater - & Alan would not be paying rent due 1 Jan 2014 – SRI would not receive a management fee – triggering liquidated damages clause. Breach of lease. Lease – Agreement/relationship of landlord & tenant (real property) or lessor and lessee – specifes [sic] 10% rent compensation. Further, during her cross-examination of Ms. Roberts at the final hearing, Respondent acknowledged that she had spoken on the telephone with Mr. Roberts on December 2, 2013, and that during the conversation the subject of breaking a contract with a real estate person was discussed. While it is found that the telephone conversation occurred on December 1, 2013, as opposed to December 2, 2013, it is evident that the conversation indeed occurred. Based on the evidence, it is found that on December 1, 2013, the Roberts effectively communicated their desire to terminate the Property Management Agreement, effective February 1, 2014. Further, although the certified letters were refused, it is found that the Roberts timely asked Respondent for return of the $2,000 reflected in the Deposit Receipt. In addition to the letters that the Roberts sent to Respondent, after speaking to the Roberts, Ms. Pridgen prepared a letter, at the Roberts’ request, for her husband to send to Respondent, dated December 1, 2013, which stated: Brenda, This letter is to inform you that I no longer wish to continue my contract with you and the Roberts. I have been renting this property since June of 2012, the original contract was for one year. I agreed to rent the property for an additional 6 months which is now up. I no longer wish to continue this contract with Spirits Realty Inc. Thank you Allen D. Pridgen The letter was sent to Respondent by certified mail on December 4, 2013, but Respondent never picked it up. Shortly after her conversation with Mr. Roberts on December 1, 2013, Respondent called the police and tried to have the Pridgens evicted from the Premises. The Roberts explained over the phone to the police officer that they, not Respondent, were the owners of the Premises. The Pridgens were not evicted. Ms. Pridgen’s credible testimony explained that they did not intend to vacate the Premises, but rather planned to continue to rent it directly from the Roberts. As of the date of the final hearing, the Pridgens were still leasing the Premises from Ms. Roberts. To date, Respondent has not returned to Ms. Roberts, as owner with responsibilities over the Lease, either the $1,000 Security Deposit or the $1,000 Advanced Rent she collected from the tenants. Instead, Respondent has retained the entire $2,000 and characterizes the funds as “liquidated damages” for the Roberts’ wrongful termination of the Property Management Agreement. The Property Management Agreement has no specific requirement for the manner in which it is to be terminated. Nevertheless, Respondent transferred the $2,000 reflected in the Deposit Receipt into Spirits Realty, Inc.’s, operating account at Hancock Bank. Respondent argues that she is entitled to retain the $2,000 because Ms. Roberts did not make a timely claim upon the escrow deposit following receipt of Respondent’s expressed intent to keep the escrow monies as “liquidated damages.” Respondent bases her argument on the Roberts’ alleged breach of the Property Management Agreement. As there was no breach and the Roberts’ request for return of the escrow funds was timely made, Respondent’s belief that she is entitled to liquidated damages has no merit. Respondent also suggests that she is entitled to retain the $2,000 reflected in the Deposit Receipt because the tenants failed to give 60 days’ notice of their intent to terminate the Lease. Respondent’s suggestion is premised upon the fact that she and her brokerage are erroneously named as the “Lessor” in the Lease that Respondent drafted. Respondent’s argument evinces that she either has a misunderstanding of her role as agent for the Roberts, or intended to take advantage of her position in a manner inconsistent with her obligations under the Property Management Agreement. Although erroneously listed as the “Lessor” under the Lease, neither Respondent nor her brokerage was a proper party to the Lease. Rather, in accordance with the Property Management Agreement, Respondent and her brokerage were only authorized as agents for Mr. Roberts in dealing with the Premises. Under the circumstances, even if the tenants had breached the Lease (which they did not), Mr. Roberts and his successor in interest, Ms. Roberts, not Respondent and her brokerage, would be entitled to make a claim against the tenants as the owners and actual lessors under the Lease. Incredibly, at the final hearing, Respondent submitted into evidence a copy of a document entitled “Lease Addendum” dated May 31, 2012, which was purportedly signed by the tenants, Alan Pridgen and Lori Pridgen. The purported “Lease Addendum” provides: Lease Addendum 31 May 2012 FS 83.575, 83.595 breach, liquidated damages, and termination FS 83.595(4) Tenant statue [sic] contains two liquidated damages provisions allowing the landlord (Lessor) an opportunity to impose liquidated damages on the tenant for early termination or for failure to give notice of intent not to renew lease. Lessor, Spirits Realty Inc. will receive the $2,000 advance fees, “early termination fee”, out of escrow, if a breach of the lease occurs. X I agree as provided in the lease agreement, $2,000 security (an amount that does not exceed 2 months rent) as liquidated damages or an early termination fee if I elect to terminate the lease agreement and Lessor waives the right to seek additional rent beyond the month in which landlord takes possession. FS 83.575 Lessee is required to give 60 days notice of intent not to renew the lease or Lessor, Spirits Realty Inc will receive the $2,000 advance fees security deposits as “liquidated damages”. Spirits Realty Inc is entitled to 5% real estate fee at close. In addition, Respondent submitted into evidence a second document entitled “Lease Addendum” purportedly signed by the now-deceased Mr. Roberts. That second “Lease Addendum” provides: Lease Addendum 31 May 2012 I agree with the Lease Addendum. Spirits Realty Inc will receive the $2,000 security deposits advanced fees out of escrow if there is a breach in the lease. Spirits Realty Inc will receive 5% real estate fee when the property closes. Lessor is acting as a Transaction Broker to lease/sale property. Ms. Roberts and Lori Pridgen credibly testified during the hearing that neither they nor Mr. Roberts, prior to his death, signed a separate Lease Addendum. Ms. Pridgen testified that she would not have signed any type of document which essentially gave up any and all rights to the escrow monies. Further, Ms. Roberts explained that her late husband, Mr. Roberts, who had an understanding of real estate matters, would not have signed such a document. Moreover, the documents presented as lease addenda are suspect. The type font is remarkably different from other documents obtained on May 31, 2012, in connection with the Lease and Property Management Agreement. Further, the paper signed by Mr. Roberts on May 31, 2012, in which he agreed to the Lease, has a fax number, date, and time at the top, but the purported lease addendum does not. Finally, the signatures on the lease addenda appear to have been copied from other signatures and taped into place. While reviewing the purported lease addendum during her cross-examination by Respondent at the final hearing, Ms. Pridgen testified: Okay. First of all, this is not the –- this has never been seen in our paperwork. The whole time that we’ve been doing paperwork with you for all these years, this was never ever seen till Brande sent it up here in the paperwork she had. And besides that, the print is not the same as any of your paperwork. And also, you can tell by the signature that they have been copied and paste onto the amendment. If the – somebody will just look at them, you didn’t clean up your work under your tape before you put it right there. So you - - you needed to clean your work up when you tape something like that because we’ve done it before. You have to clean up your work, or people can tell it when you look at it. Other than evincing Respondent’s nefarious intent to justify her retention of the $2,000, the purported lease addenda are given no evidentiary value. The evidence does not justify Respondent’s retention of the $2,000. The evidence adduced at the final hearing otherwise clearly and convincingly showed that Respondent wrongfully retained the $2,000 identified in the Deposit Receipt.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation, Florida Real Estate Commission, finding that Respondent violated sections 475.25(1)(b) and 475.25(1)(d)1. as charged in the Administrative Complaint, imposing an administrative fine in the amount of $3,500, assessing reasonable costs pursuant to section 455.227(3)(a), and revoking Respondent’s license to practice real estate. DONE AND ENTERED this 29th day of July, 2016, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III 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 29th day of July, 2016.
The Issue Whether Respondent's license as a real estate salesman should be suspended or revoked, or the licensee otherwise disciplined, for alleged violation of Chapter 475, F.S., as set forth in Administrative Complaint dated September 2, 1981. At the commencement of the hearing, the parties stipulated to Paragraphs 2 and 3 of the Administrative Complaint. Although Paragraph 2 thereof indicates that Respondent is a registered real estate salesman, he testified without contradiction that he has been licensed as a broker for the past 3-1/2 years. Accordingly, that fact will be reflected in the Findings of Fact herein. Both parties called one witness each to testify at the hearing, and Respondent testified in his own behalf. No exhibits were submitted in evidence.
Findings Of Fact Respondent, John M. Bosko, of Tampa, Florida, is a registered real estate broker and was so registered at all times relevant to the matters pertinent to this proceeding. (Testimony of Respondent, Stipulation) On or about May 11, 1979, Respondent leased a house which he owned at 3105 South Adams Street, Tampa, Florida, for a term of one year, to Gregory and Cindy Morrison. The lease was payable in the amount of $265.00 per month, and a $265.00 security deposit, to ensure compliance with performance of the lease provisions, was paid at the commencement of the lease. (Testimony of G. Morrison, Respondent, Stipulation) Gregory Morrison occupied the leased premises commencing in May, 1979. His wife, Cindy, left the house in December, 1979, and the couple was divorced in January, 1980. Mrs. Morrison took most of the furniture with her upon her departure. About March 1980, Respondent advised Morrison that he intended to sell the house and would not be renewing the lease. Morrison told him than he would leave the premises at the termination of the lease, on May 10, 1980. (Testimony of G. Morrison, Respondent) During the first week of April, 1980, Morrison moved to his future place of residence and did not live any longer in the leased house. During this period there was no furniture in the house. As to those articles that remained on the premises, the testimony of Morrison and Respondent is conflicting. Morrison claimed that he left a "pile of stuff" in the living room, including cleaning items, a vacuum cleaner, and games. He also testified that he had stored power tools, a weight bench, weights, a tuxedo, and a trombone in the garage. However, Respondent took a prospective purchaser of the house to the premises at approximately this time and they observed only an old vacuum cleaner in the living room. There were no clothes in the closets, no food in the refrigerator, and only some debris in the corner of the closets. About 500 whiskey bottles were distributed throughout the house, and about 35 marijuana plants were located in the family room. Respondent testified that he saw nothing in the garage. He therefore hired someone to clean the premises and put any of Morrison's items in the garage. Respondent was of the opinion that the house had been abandoned and that Morrison had forfeited the security deposit. (Testimony of G. Morrison, Respondent, Bankston) Morrison went to the house some time thereafter, saw that his property was missing, and reported it to the police. He telephoned the Respondent who informed him that he thought Morrison had vacated the premises, and that he had secured another tenant. Respondent told him that any of his property that had been left in the house could be found in the garage. Respondent declined to return the security deposit because he believed that Morrison had breached the provisions of the lease. Although Morrison had not paid the rent when due on April 1, he had a five-day grace period and tendered the month's rent to the Respondent within that time, but Respondent refused to accept it. Respondent proceeded to lease the property to another tenant and did not issue any notices to Morrison, or initiate any judicial proceedings pursuant to Chapter 83, Florida Statutes. Respondent testified that he was unaware of the provisions of Chapter 83. (Testimony of G. Morrison, Respondent) Morrison filed a civil action against Respondent for recovery of his personal property. The parties arrived at a compromise settlement consisting of return of Morrison's security deposit and one month's rent. (Testimony of G. Morrison)
