The Issue Whether the proposed repeal of Rule 61B-31.001(5), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority. Further, whether certain agency policies constitute rules and violate the provisions of Section 120.535, Florida Statutes.
Findings Of Fact The Florida Manufactured Housing Association, Inc. (FMHA) is a Florida not for profit corporation organized to represent the interests of the owners of approximately 750 mobile home parks. All of the parks owned by FMHA members are regulated by the Respondent. The FMHA's members will be substantially affected by the proposed repeal of the rule. The FMHA has standing to participate in his proceeding. The Florida Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes (Respondent), is the state agency charged with implementation, administration and enforcement of Chapter 723, Florida Statutes, relating to Mobile Home Park Lot Tenancies. The Federation of Mobile Home Owners of Florida, Inc. (Federation) is a Florida not for profit corporation organized to represent a substantial number of mobile home owners residing in Florida mobile home parks. The Federation's members will be substantially affected by the proposed repeal of the rule. The Federation has standing to participate in this proceeding. Insofar as is relevant to this case, a mobile home owner commonly rents a mobile home park lot upon which the home is placed. Pursuant to Section 723.011(1)(a), Florida Statutes, the owner of a mobile home park containing 26 or more lots must deliver a prospectus to the home owner prior to entering into an enforceable rental agreement for the mobile home lot. A mobile home park prospectus is intended to provide full and fair disclosure of the terms and conditions of residency and sets forth the regulations to which the home owner will be subjected after signing a lot rental agreement with the park owner. The prospectus must be filed with and approved by the Respondent. The challenged rule was adopted as Rule 7D-31.01(5), Florida Administrative Code, in 1985. Without alteration, it was subsequently renumbered as Rule 61B-31.001(5), Florida Administrative Code, and provides as follows: The Prospectus distributed to a home owner or prospective home owner shall be binding for the length of the tenancy, including any assumptions of that tenancy, and may not be changed except in the following circumstances: Amendments consented to by both the home owner and the park owner. Amendments to reflect new rules or rules that have been changed in accordance with procedures described in Chapter 723, F.S., and the prospectus. Amendments to reflect changes in the name of the owner of the park. Amendments to reflect changes in zoning. Amendments to reflect a change in the person authorized to receive notices and demands on the park owner's behalf. Amendments to reflect changes in the entity furnishing utility or other services. Amendments required by the Division. Amendments required as a result of revisions of Chapter 723, F.S. Amendments to add, delete or modify user fees for prospective home owners. Neither the statute nor the rule defines what is meant by the term "tenancy." Historically, the Respondent has taken the position that the prospectus was binding on the park owner and the mobile home owner until the mobile home no longer occupied the lot or the tenant was evicted, whichever occurred first. In other words, the "tenancy" existed for as long as the mobile home remained on the lot, and the prospectus was binding during the length of the "tenancy", including any assumptions of the "tenancy." However, several legal cases, most recently in 1992, have essentially stated that a mobile home "tenancy" exists for the period of time during which a mobile home rental agreement is effective. The effect of the legal decision is to permit Rule 61B-31.001(5), Florida Administrative Code, to be construed to provide that a prospectus is valid only for the period covered by a rental agreement. The Legislature has not adopted legislation subsequent to the case which would affect the substance of the decision. On January 20, 1995, the Respondent published notice of the proposed repeal of Rule 61B-31.001(5), Florida Administrative Code, in the Florida Administrative Weekly, Vol. 21, No. 3. The Respondent's purpose in repealing the rule is primarily to eliminate the language relating the period of validity for a prospectus to the "tenancy." Although the Respondent asserts that it has no current policy as to the period of validity for a prospectus, the Respondent acknowledges taking the continuing position that the prospectus is binding for longer than the period of a rental agreement. The Petitioner challenges the agency position as being an unpromulgated, and therefore invalid, rule. The Petitioner also challenges as being an unpromulgated and invalid rule, the Respondent's decision to discontinue the review and approval mechanism for amendments to any previously approved prospectus. The Respondent asserts that, notwithstanding prior practice, it has no statutory authority to review and approve amendments to a previously approved prospectus and that it will no longer do so.
Findings Of Fact Respondent David Henry Charnack was connected with Property Resale Service, Inc., as a registered real estate salesman, from April 17, 1974, to March 7, 1975.
Findings Of Fact At all material times, the Respondent Jay R. Toll ("Toll") was a licensed real estate broker, acting as the sole qualifying broker and officer of the Respondent The Home Agency Real Estate Corporation ("Home Agency"). At the time of the hearing, the licenses of the Respondent Toll and the Respondent Home Agency had expired, and were thus in inactive status. From October of 1980 to April 8, 1981, Laura Oxford was employed as a salesman for Home Agency. On April 8, 1981, Laura Oxford expired. By letter dated June 10, 1981, Attorney W. J. McNaughton, representing the estate of Laura Oxford, notified the Respondent Toll that he was to retain all commissions, together with a full accounting thereof, in Toll's escrow account until McNaughton advised Toll as to the time when the money should be delivered to the estate. By letter dated June 19, 1981, Toll responded that he owed Laura Oxford $883.73 for the Hawkins to Macaluso sales transaction, and that he would keep that sum in escrow. By letter of October 22, 1982, McNaughton informed Toll to forward the check for all commissions due to Laura Oxford to the estate of Laura Oxford. Hearing no response from Toll, McNaughton again wrote to both Respondent Toll and Respondent Home Agency and requested them to forward the commissions due Laura Oxford. McNaughton also stated that if he had not heard from Toll within seven days of Toll's receipt of the letter, he would report Toll to the Florida Real Estate Commission. Again hearing no response, McNaughton wrote to Toll on January 5, 1983 requesting the $883.73, and also indicated to Toll that McNaughton was aware of four real estate deals at the time of Oxford's death, for which she may have been owed commissions. This letter was sent to Toll at his home address, and to Home Agency at its business address, certified mail, but both were returned unclaimed. When this last attempt at communication with the Respondents' failed, McNaughton advised Ralph Oxford, personal representative of the estate of Laura Oxford, to file a complaint with the Florida Real Estate Commission. On February 26, 1982, Toll's escrow account in which the $883.73 in commission due Laura Oxford had been maintained was closed, and the funds were thereafter not maintained in escrow. The complaint Ralph Oxford filed against the Respondents was investigated from April 20, 1983 to May 27, 1983, by Department Investigator Frank King. On May 20, 1983, Frank King interviewed Toll with regard to Mr. Oxford's complaint. During that interview, Toll admitted that he owed the estate of Laura Oxford $927.50 for the Miller to Rivera sales transaction and $75 for the Price to Rosario sales transaction. Ralph Oxford first became aware that there were commission monies due Laura Oxford in excess of $883.73 when investigator Frank King so notified him during the course of investigation of Toll. At no time prior to May, 1983 did Toll report to McNaughton or Ralph Oxford that additional monies were due Laura Oxford. Toll utilized the commissions due the estate of Laura Oxford for his own use and benefit without the prior knowledge and consent of Laura Oxford or her estate. On July 25, 1980, Toll submitted an application for licensure of The Home Agency Real Estate Corporation, listing Jill Harris, wife of Harvey Harris, as vice president and registered agent of the corporation, and listing Harvey Harris as a 50 percent owner in the corporation. On July 29, 1980, Harvey Harris gave Toll a check in the amount of $2,550 as partial payment for ownership of 50 percent of Home Agency. The total purchase price for 50 percent of the stock of Home Agency was $3,500.00. The original agreement between Harvey Harris and Toll was that Harris was to own 50 percent of the profits of the corporation. The stock was never issued. On August 19, 1980, Harvey Harris became employed by Home Agency as a real estate salesman and remained so employed until approximately April 22, 1981. Early in Harris' employment, Toll told Harvey Harris that he did not want partners in the corporation, and offered instead to make Harvey Harris sales manager with Harvey Harris receiving 60 percent of listings and sales and Home Agency receiving 40 percent. Harvey Harris was also to get $100 for each deal that came in the office and $50 a week toward car allowance. Toll's agreement with Harvey Harris included the provision that Toll be placed on all of Harvey Harris' listings so that if Harris was out of the office canvassing or training salespeople and customers called to inquire about a listing, Toll would be able to take the calls. Further, if Harris took a listing and was also selling salesman for the listing, he would retain 70 percent of the money with 30 percent going to Home Agency. Through several payments, Toll paid back the $3,500 originally paid to him by Harvey Harris for the stock. Harris was the listing salesman in the Brown to Herrara transaction. Toll took no part in the listing which was sold by another real estate office. Under the terms of the agreement between Toll and Harris, Harris should have received 60 percent of Home Agency's share of the commission. Home Agency received $2,349 as commission, and Harris was to receive $1,404.00. Instead, Harvey Harris received nothing. When Harris demanded his commission, Toll told him that he needed the money to keep Home Agency open and stated that he would pay Harris back. Harvey Harris was the listing salesman in the Lassiter to O'Bier transaction. Toll procured the purchasers, the O'Biers. In that transaction Home Agency received $3,750.00. Toll should have received 60 percent of that amount, but instead received nothing. Harris discussed the commission with Toll and was again told by Toll that he needed the money to keep the office open. Harvey Harris was both the listing and rental salesman in the Temple Israel to Mishel rental transaction. As such, he was entitled to 70 percent of the $700 commission. Instead Harvey Harris received $175.00. When he confronted Toll about the additional monies due him, Toll told him that that was all he would receive. Harris was the selling salesman in the Carsaglia to Caveras transaction. The listing was held by 4 percent Realty. Toll had no involvement in the transaction, other than rewording the contract. Harris was due 60 percent of the commission in the Carsaglia to Caveras transaction. Home Agency received approximately $2,200.00. Harris received $570.19, significantly less than the approximately $1,320 that he was entitled to receive. Harris was the listing salesman and selling salesman in the Force to Albertoria transaction. Home Agency received $3,720 in commissions from that transaction. Under the terms of his agreement with Toll, Harris was to receive 70 percent of that commission. Instead, Toll paid Harris $116 initially, with twelve payments of $88.85 due monthly. Toll did not pay the last two payments in the amount of $88.85 to Harris. Harris received no other monies from Toll on the commissions previously discussed, and when he requested the commissions and pursued the point he was fired. After leaving Toll's employment, Harris repeatedly requested the commissions and Toll failed to deliver them. The Respondent Toll presented no defense to the allegations involving Laura Oxford, but did defend the statements of Harris by presenting testimony that Harris in fact was indebted to Home Agency.
Recommendation Based on 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 the Respondents guilty of Count One of the Administrative Complaint and suspending the licenses of Jay R. Toll and The Home Agency Real Estate Corporation for a period of three (3) years. DONE and ENTERED this 30th day of March, 1984, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 1984.
Findings Of Fact At all times pertinent to the issues herein, Herbert A. Licht, was a certified general contractor in the State of Florida under license Nos. CG C011504 and CG CA-175O4. Respondent qualified All Florida Builders, Inc. under license No. CO CO11504 from February, 1978 until September, 1980. He also qualified Perma-Vent Industries of Orlando, Inc. (PVO) and Perma-Vent Industries of Tampa, Inc. (PVT) from inception to the present and was sole qualifier of both. PVT, at all times pertinent hereto was licensed as a home improvement contractor under license H 0000969 having been licensed in March, 1980. Respondent was initially the president and vice president, and a director of PVT as well as owner of one-half the capital stock of the corporation. The business of PVT was to sell and install home improvement products and services in the Tampa area. Similar in operation to PVT was Perma-Vent Industries of Orlando, Inc. (PVO), licensed as a home improvement contractor in December, 1979 under license number AC 0000874. Again Respondent owned one-half the stock in this corporation and initially was the president, vice president, resident agent and a director. Elliott Greenberg was the owner of the other half interest in both PVT and PVO. Elliott Greenberg is not licensed as a contractor by the State of Florida. Perma-Vent Industries, Inc. (PVI) was initially incorporated in mid- 1980, but was not licensed by Respondent until February, 1983 when he secured license number HC 0001282. This company, of which Respondent was, again, president, vice president, registered agent, director and one-half owner, was not qualified by Respondent until after the incidents pertinent to this hearing. At all times pertinent here, Respondent had failed to qualify PVI. Another corporation established by Respondent was Statewide Funding Corporation (Statewide), set up in April, 1980, which operated as a collection agency for the financial paper generated by Respondent's other businesses as described above. Respondent had a relationship to this company identical with that of the others mentioned above. Respondent also operated All Florida Builders, Inc. (AFB) for 18 months from early 1978-1979/80, engaged in the business of selling and installing home improvements. AFB was the predecessor to PVO, but Greenberg had no proprietary interest in it. In addition to his ownership of one-half of the stock in the other corporations mentioned, however, Greenberg was also secretary/treasurer and a director of them all. In the operation of the various businesses by the Respondent and Mr. Greenberg, there was some difference between how PVT and PVO operated and how PVI did. In the former, while Respondent handled the office and financial end of the business Greenberg handled sales and operations. As to the latter, Greenberg had almost total control of all aspects of the business though Respondent's license was used for those activities of the operation which needed it, such as the pulling of permits for particular jobs. In both the PVO and PVT operations, Mr. Greenberg was the overall sales chief who oversaw the phone room canvassers and the street sales force, through managers who answered to him. Installation and construction was also within Greenberg's area of supervision through the "expediter", an individual who assigned the particular jobs and insured the proper materials were on hand. The "installers" or "mechanics", the individuals who actually did the hands-on work, were, in theory, independent contractors who were paid by the job. None of the instant companies maintained payrolls for these people, deducted withholding, or any other deduction called for. While the sales force of PVT was set up and operated exactly as that of PVO, the Tampa company had no expediter or installers. These services were performed for it by PVO's personnel even though the corporations were, theoretically, separate. As to PVI, this was a different situation entirely. PVI's salesmen were independent contractors who, primarily, took orders for work to be done with, normally, materials and labor furnished by PVI. They were free to set their own prices and, as compensation, received the difference between the contract price for the job and the actual cost of labor and materials as charged by PVI. In the event the salesman, as was sometimes done, procured his own installer's, he would pay that individual's salary from his own profit which was the difference of his contract price and the cost of materials. PVI performed collections services on these contracts. Turning to the operations of PVT and PVO, canvassers from the phone room, calling numbers in line from the local phone books, would try to set up appointments for salesmen to subsequently try to sell aluminum siding or home repair. The salesmen were trained using an "Eleven Point Sales Outline" adopted by Mr. Greenberg from a sales brochure used by another similar firm in another part of the country and brought by a former employee of this company. This sales program is typical of a high-pressure sales operation where the facts are often misrepresented or used loosely in order to convince a prospective buyer that he or she is getting special treatment. Once the salesman got the prospective customer/homeowner to sign a contract for some type of service, the contracts were brought to the home office where the Respondent himself, according to his repeated testimony, reviewed every contract entered into by PVT and many entered into by PVO. Once the contract was approved by Respondent a copy was forwarded to the operations section where the expediter, an employee of PVO, actually assigned the work to the workmen who would accomplish it, The expediter also determined how much raw material would be used on the job and insure that it was issued to the workmen and properly costed. Many of the workmen utilized by Respondent's corporations to apply siding or otherwise do home repair work were themselves not licensed, but operated under the Respondent's license as a general contractor. Ordinarily the expediter furnished the workmen with blank letters of authorization, signed by Respondent and on hand in the PVO office, for the purpose of applying for the required permits in appropriate cases. There was some indication that, initially, the workmen were not required to obtain permits for their particular jobs. In fact, one workman, Melvin Nichols, indicated that he was advised by a representative of the Respondent that he need not bother with getting a permit unless there was trouble. Ordinarily, however, the applicators were given signed letters of authorization. This is a perfectly legitimate practice within the construction industry trade in Florida. However, once the job was completed the installer was supposed to obtain from the homeowner a certificate of completion, which he thereafter would turn in to the expediter as one of the pre-conditions for receiving payment for his services. One of the other things the installer had to submit was a breakdown sheet indicating exactly what expenses were incurred by him, including permit fees, if any. Once this was done, someone from whichever of Respondent's companies actually contracted for the work, PVI, PVO, or PVT, would return to the homeowner's residence with typed copies of the already signed, handwritten, agreement and other documents. When he first started in business, Respondent would conform these subsequently typed and executed documents to the date on the original handwritten documents. However, when he determined that this practice was not appropriate he ceased doing it and the typewritten documents were dated as of the date of their signing. As a result, there were often multiple documents covering the same work signed by the parties on different dates, creating a morass of paperwork which to the average customer was often confusing, especially in the situations where the customer could neither read nor write. Initially, when the businesses were first started, the Respondent personally supervised the training of the salesmen and frequently went to the construction site to observe and insure that the work was being done properly. However, as his business expanded Respondent, by his own admission, had less and less time to do this and devoted more and more time to the financing and administrative aspects of the business which were done in the office. However, as will be seen below, Respondent still, on a period basis, personally involved himself in the actual procurement of signatures on mortgages and the other quasi-legal aspects of the operation. In the succeeding paragraphs several case studies will be analyzed individually. It will be possible to see a similar thread of activity, however, throughout the operations. While Respondent claims he was not aware of the day-to-day activities of these three companies, and tries to exculpate himself from any responsibility for the operations of PVI, it is clear this was not so. The evidence clearly shows that the operations of all three companies were tied in together, all operating out of or under the control of the home office, which was at the same location for all three (four if AFB is considered separately) and were established and financed by or through the arrangement of the Respondent, Licht. BROWN Some time during 1979 an individual holding himself out to be a representative of AFB came to the New Smyrna Beach, Florida, home of John H. Brown and his wife, Lilly Mae. This individual suggested that the Brown's should have their home with aluminum siding and also have aluminum soffit and facia installed. During this initial meeting, the AFB representative showed Mr. Brown some photographs of homes on which, he said, his company had applied this same product, and discussed how, if Mr. Brown were to agree, the improvements would be paid for. They discussed the monthly payments for the work and Mr. Brown was convinced to sign some papers relating to the job. He was not specifically told what the papers were, but he was assured his payment would be cheaper than those of other people for whom the same type of work was done. Neither Mr. Brown nor his wife can read or write and he advised the salesman of this fact. He is currently retired after 30 years of work with the Florida East Coast Railroad as a laborer and his sole source of income is his railroad retirement check. The Browns are, however, somewhat familiar with credit and credit financing, since they purchased their home utilizing a mortgage calling for monthly payments, and furnished the home through credit payments with Montgomery Ward. Subsequent to the first meeting, on or about December 27, 1979, Mr. and Mrs. Brown (Mrs. Brown is senile with only sporadic periods of lucidity) signed a retail installment contract with All Florida Builders which provided for that company to install aluminum siding on all four walls of the Browns' home. The price was $4,000.00 which was to be financed over 60 monthly payments of $103.49, each, for a total of $6,209.40. The annual percentage rate on the financing was 18.8 percent and the payments were to be secured by an interest in the Browns' home. Mr. Brown contends he did not know he was signing a contract at that time, and thought he was merely signing an authorization for the work to be done. This contract was not fully filled out at the time it was signed in that the salesman's license number was not contained thereon, nor was the amount financed listed. This contract was never signed by the contractor and the Browns were not furnished a notice of their right to rescind the contract at the time they signed it. The contract also contained a slight overcharge on the financing of the contract; this overcharging was not disclosed as is required by the statute. At no time during the preparation and execution of these documents were the Browns advised of the nature or content of the documents they were signing. In that connection, the salesman in question here was Ron Greenberg, who is, coincidently, the brother of Elliott Greenberg, mentioned previously. The following day, December 28, 1979, Mr. Brown was convinced to sign a second retail installment contract for the same aluminum siding with the addition of soffit and facia. This time the work was to cost $6,500.00 payable in 60 payments of $167.93 each for a total of $10,089.60. The payments due under this contract were to be secured by a mortgage on the Browns' home. This contract, also, was not complete at the time that it was presented to the Browns' for signature. Again, the salesman's name and license number were not noted on the contract, nor were the charges itemized and again, the company failed to execute the contract. This time, however, Brown was furnished with a notice of right to rescind, but he was not advised of the nature of these or any of the documents he signed on this date. Nonetheless, pursuant to that contract, AFB began to install siding on the Browns' home. However, the job was not completed, nor was any of the soffit and facia installed as called for in the contract. What little work was done was done without proper permit as required by the City of New Smyrna Beach. Even though the work was not completed, in early 1980 representatives of AFB prevailed upon Mr. Brown to sign a certificate of completion without advising Mr. Brown of the fact that he was indicating thereon that the work called for in the contract was complete. After AFB ceased work on the Brown property without completing the job called for, Brown was convinced to sign another contract calling for a cash price of $4,000.00 for the installation of aluminum siding on the Brown home. Sixty payments of $100.00 each would bring the total payments to $6,000.00 On the day this third contract was signed, Mr. Brown was also asked to sign, and did sign, a mortgage on his property in the amount of $4,000.00 dated December 27, 1979. Mr. Brown did not know he was signing a mortgage nor was he advised of the contents of the documents before he signed them. Thereafter, however, Respondent notarized the mortgage bearing date of December 27, 1979, indicating that he witnessed the signature of both Browns on that date. In fact, he did not witness the signatures on that date or any other date. In addition, subsequent to Brown signing the mortgage, Respondent altered the terms of the mortgage reflecting a $6,000.00 rather than $4,000.00 security interest. Respondent initialed the change and subsequently caused the mortgage to be filed in public records. None of the documents which Mr. Brown signed were given to him at the time of signing by the salesman. In fact, all copies which he received were sent to him by mail at a much later date. Respondent justified the alteration of the amount of the mortgage on the basis that he was conforming it to the intent of parties and the contract. However, Brown did not know what he had signed. Approximately two years later, in early 1982, two salesmen from PVO advised Mr. Brown at his home that they were going to complete the work called for under the previous contract at a cheaper price. They advised him that in the future all payments were to be made to PVO and, as a result, Mr. Brown discontinued the payments which he had been making under the earlier contract with AFB regularly since 1979, even though the work had not been done. Pursuant to these oral representations, on February 2, 1982, Mr. Brown signed another installment contract and note which provided that PVO would install aluminum soffit and facia around the entire house, install aluminum window and door trim, and cover the rear porch ceiling with an aluminum ceiling material. The cash price for this work was listed on the contract as $3,440.00 payable over 54 monthly installments of $98.214 at 12 percent per year add-on interest. The contract also provided for payment to be secured by a mortgage on the Brown's home. Again, Mr. Brown was not aware of the fact that he was signing a contract, nor was he verbally advised of the nature of the documents he was signing at or prior to doing so. The contract in question failed to contain the salesman's license number and the agreement itself was not signed by a representative of PVO. Mr. Brown was also not given either written or oral notice of his right to rescind the contract. On February 24, 1982, Mr. Brown was convinced to sign yet another retail installment contract secured by a mortgage on his home. This contract called for PVO to install aluminum ceilings on both the upstairs and downstairs porches. Again, Mr. Brown was not made aware of the fact that he was signing a contract at the time he signed this document, which called for a cash price of $1,800.00 financed over three years at monthly payments of $68.10 each. The salesman's license number was again not listed on the contract, nor was Mr. Brown furnished either a written or verbal notice of his right to rescind the contract. The work called for in the February 2 and 24, 1982 contract was performed as called for. However, no permit was ever obtained for the work though Section 10-65, New Smyrna Beach Ordinances requires it. Once the work was completed, the Browns signed a certificate of completion. And at some time subsequent to February 24, also they signed a series of typewritten contract, notes, and other documentation including a mortgage on their property, all of which were dated February 2, 1982. All of these documents also contained the signature element for Leroy Jackson, an individual who had become a co-owner of the Browns' home subsequent to December 27, 1979, but prior to February 2, 1982. Mr. Jackson was a resident of Detroit, Michigan, and consequently the documents were sent there for his signature. The mortgage, bearing Jackson's signature and dated February 2, 1982, reflects that all signatures were affixed and the document notarized in Volusia County, Florida, on February 2, 1982. The notary jurat executed by an individual named French, indicates that this notary witnessed all signatures in Volusia County, Florida. However, as was stated before, no one signed the document prior to February 24, 1982, and Mr. Jackson's signature was affixed in Detroit, Michigan. The typewritten contract executed on February 24, combined the terms of the handwritten February 2 and February 24 contracts increasing the monthly payment, the total amount of the payment, and the percentage rate. This document, however, and all other documents, bore the date of February 2, 1982, though they were not presented or signed until on or after February 24. Further, the completion certificate which the Browns' signed, purportedly on February 19, 1982, referred to work that was not to be performed until after March 1, 1982 under the terms of the contract dated February 24, 1982. It is clear from all of the above that the documentation prepared by individuals in the employ of the Respondent is totally unreliable and false in most particulars, all to the detriment of the customer, Mr. and Mrs. Brown. Payment amounts were raised, the total amount was raised, interest rates were excessive without disclosure, and the documents themselves were insufficient in form. As a result of Mr. Brown's ceasing payments on the 1979 contract when he signed the new ones in 1982, Mr. Brown was required to secure the services of an attorney who was able to negotiate a partial settlement of the matter with Respondent's company. Pursuant to the settlement, Mr. Brown continued to make payments of $100.00 per month on the December 27, 1979, contract and will do so until such time as the $1,000.00 balance is paid. At the request of the Browns' attorney, in May 1984 an architect inspected the work performed on the Browns' home and determined that it was, for the most part acceptably done. However, in October 1982, a representative of another aluminum company had previously inspected the work done on the Brown house, at the request of Brown's attorney. His estimate of $5,000.00 for the work, which included labor, materials, and a 30 percent profit and overhead margin, was substantially lower than that charged by Respondent's company for the same work. NEWMAN Some time in mid-1979, Floyd Newman was visited by a salesman for AFB. Mr. Newman repeatedly told the salesman he did not want any work done, however, the salesman convinced Newman to allow him to display his material. During the course of the sales presentation, the salesman measured the Newmans' open carport. He then attempted to convince Mr. Newman to install an aluminum carport over the open area at a cost of $3,200.00. Mr. Newman immediately advised the salesman that he did not want the carport and could not pay for a carport out of his sole income of $212.00 per month from pension and food stamps. In response to this the salesman advised Mr. Newman that the company would finance the construction and asked if the Newmans would be willing to mortgage their home. Mr. Newman indicated absolutely not, nonetheless, the salesman convinced Mr. Newman to sign a piece of paper which he represented was merely for the company file. In reality it was a preprinted form retail installment contract. The only thing on the form at the time Mr. Newman signed it was the amount of $3,200.00. The space for the description of the work to be done, and that for the computation of payments was blank, except for the total sum. Mr. Newman was given neither explanation of the contract nor a copy at the time he signed. This blank contract, however, was, subsequently filled in out of the presence of Mr. Newman. It called for the installation of a carport as well as the delivery of eight cans of paint for $3,200.00. The document, which was dated August 18, 1979, reflected the salesman as David Cavetta. However, numerous other spaces were still left blank. For example, the commencement and completion dates were not given, the finance charge information was not given, and the agreement was not signed by a representative of the company. Several weeks after Mr. Newman signed the blank contract, two men came out to begin work on Mr. Newman's home. On their arrival, Mr. Newman asked them to leave but they went ahead nonetheless and completed the work. One of the installers, Charles Barefoot, was an independent, unlicensed contractor. He was compensated on a square foot basis. Barefoot and the other installer, Mr. Seibert, completed the installation of the carport without obtaining any permit required for the project. About two weeks after the carport was completed the Respondent came to the Newmans' property with certain pre-printed blank forms that he wanted signed. At this point, Respondent told the Newmans' that the papers merely showed that the work had been done, and in response to his request Newman signed four or five of the documents. One of the documents signed on this occasion was a mortgage deed, and others included a home improvement sales contract, a certificate of completion, a credit application, and a notice of right of rescission. The Newmans', whose ability to read and write is limited, did not know what it was they had signed and Respondent did not explain the documents to them. Mr. and Mrs. Newman completed the fifth grade of school. Neither has any experience with credit. The only purchase they made on time was their home, and on that occasion the paperwork was completed by the seller and the Newman's signed what they were asked to sign. The contract brought by Respondent was dated August 18, 1979 but was not signed until approximately four weeks after that date. This typewritten contract provided for the same work as on the handwritten one. The cash price was $3,200.00, but when credit, life insurance, official fees, and a finance charge of $2,465.77 were added, the deferred payment price, with interest at 16.65 percent over 84 monthly installments came to $5,989.20. The interest rate on the contract exceeded the legal limit. The mortgage deed, also dated August 18, 1979, which was signed in blank at the same time as the contract, at the request of Respondent, was filled in at a later date. Respondent notarized the Newmans' signatures on the instrument. The mortgage deed referred to property located on Huggins Street, in Lake County, Florida, property which the Newmans' had not owned for several years at the time the mortgage was executed. Consequently, there were two falsifications on the mortgage. The first was the improper property serving as security, and the second was the erroneous date, both items placed there by the Respondent after the Newmans signed. The Newmans denied giving Respondent the property description for the Huggins Street property. Respondent, at first contending that the Newmans were the ones who gave it to him, subsequently admitted that he may have secured the property description from county records subsequent to the date the Newmans signed the mortgage deed in blank. It is clear, and so found, that Respondent procured the Newmans' signature on a blank mortgage deed, filled it in with date and property description thereafter, and falsely notarized the exhibit. None of the documents were, according to Mr. Newman, explained to him at the time they were signed, nor was he given a copy of them at the time of signing. Instead he received copies through the mail several weeks after Mr. Licht had come to their home. Approximately two months after the initial contact in August, Mr. Newman received a letter asking for the first month's installment payment for the carport. Thereafter, between November 2, 1979 and November 2, 1980, Mr. Newman made payments to AFB in a total amount of $775.00. It was not until approximately nine months after he began making payments that Mr. Newman found out what documents he had signed. When he did, he immediately stopped making payments. While Mr. Newman was making the payments, however, a salesman from PVO, a successor to AFB, came back to the Newmans' property, ostensibly to see how the previous work had been accomplished, but in reality to sell additional home improvement services. On that visit Newman again signed a retail installment contract and a notice of rescission of rights, which provided for PVO to install aluminum soffit and facia around the Newman home for $1,375.00. At this point the contract was not completely filled in as to the terms of the financing, but the instrument did provide that the original contract of August 18, 1979 was to be incorporated in the latter contract dated July 22, 1980. This work was performed by Larry Willbanks, an independent contractor acting as an applicator for the Respondent. Willbanks was not licensed as a contractor in the state of Florida and neither he nor anyone else obtained the required building permits to accomplish the work in question. Once the work was done, the Newmans signed additional typewritten documents which conformed to the original handwritten documents signed previously. The typewritten contract which the Newmans signed after the work was completed was dated July 22 1980, though the actual signing took place several weeks later. It provided for payment of $4,683.05, which included the total price of the new work done and the unpaid balance on the carport, as well as additional administrative expenses. After the finance charge was added in, the total deferred payment price was $8,615.88 to be paid over 84 monthly installments. The contract also, by bearing interest at 19.5 percent, overcharged the Newmans finance charges in the amount of $614.00. Though the Newmans signed the documents dated July 22,they claimed they did not know they had signed an additional contract and note because they thought the work was included in the earlier contract. They have not received copies of these July, 1980 documents, however. After observing both Mr. and Mrs. Newman in their sworn testimony at the hearing, it is obvious that the Newmans may feel that they have an opportunity to take advantage of the situation and have themselves excused from any further payments. Nonetheless, clearly they are inordinately unsophisticated and there is little chance that they understood just what it was they were signing. When this is considered along with the obvious fact that Respondent personally secured an unlawful mortgage on property formerly owned by the them, it is clear that they were the victims and not the Respondent. In any event, several months after signing the documents, the Newmans stopped making payments on the basis that they felt they had been tricked into signing the earlier 1979 one. SUTTON Aleen Sutton, a nearly illiterate 72 year old laundress, resides in Sanford, Florida. At the time pertinent to this complaint, in 1980; her home was in very poor condition. There was a hole in the porch floor and in the kitchen; the dining room floor was sagging; and the windows were supported by rotten, cracked, and unstable wood. Just about this time Mrs. Sutton was advised that a government sponsored home improvement project was under way in the area which would help low-income homeowners improve their property. In order to determine if she was eligible for the program, Mrs. Sutton went to the agency's office where she was told that a representative from the agency would come out to see her home and determine whether or not she could qualify. Shortly thereafter Mrs. Sutton received a telephone call from a solicitor for PVO whom she mistook to be a representative of the agency. She was asked if someone could come out to talk to her about home improvements and, because of her misconception, she agreed. A PVO salesman, Gary French, came out several days later and when he arrived, Mrs. Sutton, thinking he was with the agency, showed him all of the problems she was having with her home. French advised her that he would fix her home up and showed her pictures of a house which, he represented, would be what hers would look like when it was finished. At this point Mrs. Sutton still thought she was dealing with someone from the agency. During the initial meeting French got Mrs. Sutton to sign three documents; a contract, a credit application, and a notice of rescission. According to Mrs. Sutton, she did not know what she had signed. Though she signed the right of rescission she was not advised that she had three days in which to decide to do so. Though she gave Mr. French information about her income and her previous credit history, she did not know she was agreeing to finance improvements to her home. The contract she signed at that time provided for applying aluminum soffit and facia completely around the house; for capping all windows with aluminum stock; for replacing all rotten wood; and for caulking and sealing all cracks. No mention was made in the contract about the hole in the front porch or kitchen floor or the sagging dining room floor. Though the contract outlined the financing provisions of the transaction, and called for the price to be secured by a mortgage on the house, there was no disclosure statement nor was the salesman's license number filled in. In addition, the contract was not signed by any representative of the Respondent. The actual work on the Sutton property was done by Mr. Edward Ferguson, an independent contractor working for the Respondent on a per foot basis. At the time he worked on the Sutton property he did not have any type of a license for contracting issued by the State. At no time did he procure any of the required building permits for the work done. Ferguson put aluminum around the windows and replaced some of the wood. He also installed some of the soffit and facia called for by the contract. However, he did not complete the installation, and the aluminum around the windows was improperly installed. Before the work was completed, Respondent and some associates went to Sutton's house to get her to sign typewritten copies of the documents she had signed previously. At first Mrs. Sutton refused to sign, indicating that the work had not been completed, and that some damage had been done to her screens. When Respondent paid a cash settlement of $37.00 for the damage to the screens and the clean-up of the debris left by the workmen Mrs. Sutton signed the papers presented to her. The evidence conflicts on whether these documents were signed voluntarily or under coercion. On one hand there is evidence to indicate she was told that she had to sign the paper "or else" on the other hand, there is evidence that once Mrs. Sutton was paid the $37.00 she was completely satisfied and willing to sign as requested. It is likely that Mrs. Sutton, thinking the government was going to pay for the work signed without being coerced once she was paid for the damage and clean-up and it is so found. This does not affect the nature of the transaction. In any event, the documents were signed and the typewritten contract in the amount of $2,600.00 (cash price) and $4,032.96 (deferred payment price) provided that Mrs. Sutton was to give a security interest to secure the payment. Mr. Sutton contends she did not know what she was signing and had she known the effect of these documents she would not have signed them. She also did not know that she signed a notice of rescission or a certificate of completion, and that since the work was not done she would not have signed it had she known what it was. Respondent notarized Mrs. Sutton's signature on the mortgage as of May 29, 1980. This document is in error in that it bears an improper date. This is consistent with Respondent's demonstrated practice of violating the rules regarding notarization. Mrs. Sutton was not furnished with copies of any of the documentation at the time she signed them, but received them somewhat later through the mail. Once the documents were signed, no one from PVO ever returned to the Sutton premises and the work called for in the contract was not complete. Mrs. Sutton made several payments according to the terms of the contract after they were explained to her by her daughter. However, she fell behind in payments and this precipitated a conference Mrs. Sutton, Respondent, and officials of the Barnett Bank, to whom the mortgage had been sold by Respondent. As a result Mrs. Sutton filed a suit against PVO as a result of which, in addition to an award to her of compensatory and punitive damages, the mortgage on her property was cancelled. FRANCIS In December 1981, Bryce Francis, in response to a brochure he received in the mail from PVO, expressed an interest in the company's services. As a result, one of PVO's salesmen, Jim Heidish, came out to Mr. Francis' DeLand, Florida, home and convinced Mr. Francis to sign a contract for PVO to spray the Francis' home. This initial contract was signed on December 12, 1981, and the contract price was $2,925.00. Somewhat later, on December 31, 1981, Mr. Francis signed a second contract with PVO calling for the company to install aluminum soffit and facia around the overhang of the home, to cover the front porch ceiling, and to replace rotten wood where necessary. This second contract had a price of $2,225.00. Work was begun on the Francis' home without PVO or any of its employees procuring the required building permits from the City of DeLand or from Volusia County. Mr. Francis refused to allow any work to continue after the first day because of his dissatisfaction with the quality of the work performed. When he checked under some of the aluminum which was installed, which was sagging in some areas, he found that it had merely been installed over the rotten wood which had not been replaced. OSGOOD John and Nancy Osgood, older residents of Orlando, Florida, were visited at their home in December, 1981, by Gary French, a salesman for PVO. French asked Mr. Osgood if he would like siding put on his home. When Mr. Osgood told French that he could not pay for it because of his retired status and limited income, and would not mortgage his home to secure the work, French told Osgood that PVO did not need a mortgage. PVO would put up siding on the Osgood home as a demonstration of their product and workmanship for half the normal price, a total of approximately $600.00. Osgood said he would not object to paying a little bit to have his home improved, but that he could not afford any large sums. Mr. French reassured the Osgoods that they would pay only $25 or $50 a month and that they would not have to mortgage their home. Mrs. Osgood also repeatedly told French she did not want the work done, but French kept coming back and after several days of pressure salesmanship the Osgoods finally decided to go ahead with the work, providing the siding could be obtained at cost. On or about December 12, 1981, after the repeated visits by French, the Osgoods signed a retail installment con tract and note which called for PVO to install aluminum siding on the exterior walls of the home and trim on all windows and doors. Cash price was $7,000.00 which when financed over 108 monthly payments resulted in a deferred term payment price of $14,581.08 which included $7,570.00 in finance charges. The contract also provided that a security in the form of a mortgage on the Osgoods' home would be provided. Neither Osgood can read or write with any proficiency. Though they have, in the past, purchased items on credit and have a mortgage on their home, they have never had any credit cards. Those cases where they did purchase on credit, the seller completed the paperwork and the Osgoods', accepting the seller's representation as true, signed what was put before them. The Osgoods were never told that the contract price for the siding was $7,000.00 which would eventually increase to $14,570.00. This amount far exceeds the $600.00 which Mr. French initially advised the Osgoods the work would cost. They also were never told that they would be signing a mortgage on their property to secure payment of the contract price. It is obvious that the Osgoods did not know what they were signing and signed trusting in Mr. French, who they had previously advised that they were unable to read and write. This contract, as in the case of many others, did not contain the salesman's license number, nor was it signed by the company. On December 18, 1981, the Osgoods signed another contract containing many of the same provisions as the previous one, as well as a notice of right of rescission. Here again, they were not advised before they signed as to the nature of the documents they were signing, what the documents pertained to and what their rights were under the contract. This contract, as well, was not signed by a representative of the company. Several weeks later, on December 30, 1981, the Osgoods were prevailed upon to sign another contract with PVO for the installation of an aluminum awning over the front porch. This contract had a price of $1,665.00 and also called for the execution of a mortgage on the Osgoods' home as security. It also contained blank spaces when it was signed by the Osgoods which related to finance charges, total deferred payment, and the added annual percentage rate, as well as the number of payments to be made for the amount of monthly payments. The contract was not signed by any representative of the company. Approximately two weeks later the Osgoods were induced to sign a fourth contract which, this time, provided for PVO to install eleven aluminum window awnings around the exterior of the home on each window. This contract, as in the case of the others signed by the Osgoods, contained blank spaces at the time it was presented to the Osgoods for signature. For example, the salesman's license number was not furnished and the contract was not signed by a representative of PVO. Although this contract also required the Osgoods to mortgage their home as security for the contract, they were not advised of this information prior to signing, nor were they advised of the total amount they would have to pay under the contract, or the amount of their monthly payments. The `aluminum work called for in the several contracts signed by the Osgoods was performed by an independent contractor working for PVO who accomplished what work he did without any type of license and without first obtaining any of the required permits. While this work was being accomplished, Mr. Osgood received copies of all the documents which he had previously signed, but which had not been furnished to him at the time of signing. After the work was stopped before completion, French presented the Osgoods with a typewritten contract bearing the date December 18, 1981, and typewritten copies of all the other documents, such as the right of rescission, completion certificate, and mortgage, which had been signed by the Osgoods when in handwritten form prior to that time. The typewritten contract incorporated all the provisions of the prior handwritten contracts and reflected a cash price for all the work of $12,565.00 to be paid over 108 monthly payments of $242.33 each. It was at this time that Mr. Osgood first learned that his monthly payments would be in that sum. Even at this point, however, the Osgoods were not advised verbally that they would be required, under the terms of the contract, to execute a mortgage on their property as security for their payment. This mortgage, which was signed by the Osgoods before the work was satisfactorily completed, reflected the deferred payment price, of $26,171.64. The mortgage was notarized by Gary French, the salesman, who certified that the Osgoods had appeared before him and signed it on December 19, 1982. This was blatantly false. The Osgoods contend, however, that even at this point they were not aware that the document they had signed was a mortgage and they continued to rely on French's representation to them that a mortgage would not be necessary for the work to be performed. When Mr. Osgood subsequently discovered that he had signed a mortgage on his house and that his monthly payments were far in excess of that which he had anticipated he would be required to pay, he nonetheless attempted to make the payments. He paid a portion of the first payment, but thereafter defaulted. Foreclosure action was brought against him by PVO, but was subsequently dismissed upon arrangements being made that the Osgoods would pay $25 a month until the entire debt is paid. Though the Osgoods were convinced to sign a certificate of completion dated January 28, 1982, the project was incomplete at the time and remains incomplete. Not even half of the window awnings have been installed, and inspection of the property made in April of 1983 reflected that the aluminum siding was not properly grounded and that electrical wires are hanging dangerously close to one of the awnings. This latter feature may not be the responsibility of Respondent. An independent estimate of work identical to that provided for in the PVO contracts with the Osgoods reveals that a total cash price, including a 20 percent profit and overhead margin, and a 20 percent allowance for commission would be under $4,000.00, a sum substantially less than that listed as the cash price on the PVO contract. GADSON Some time during the spring of 1982, Mr. R. B. Polk, a salesman for PVO, came to the Ocala, Florida, home of Pearl B. Gadson, a 74 year sight- deficient widow who lives with her grandson on $274.00 a month which she receives from Social Security, and $300.00 which he receives from the same agency. Mr. Polk told Mr. Gadson that the government was fixing up homes for the elderly, which included the installation of aluminum, soffit and facia. Mrs. Gadson indicated that she didn't need the aluminum but did require boards replaced on the eaves and on the porch of her home. Mr. Polk specifically advised Mrs. Gadson that the government would pay or help pay for this work to be done, and since Mrs. Gadson had heard of a project in Lakeland, Florida, where the government was paying for the repair of private homes, Mrs. Gadson assumed that Polk was involved in the same type of project. Mrs. Gadson advised Mr. Polk that before she made any commitment she wanted to talk with her son in Connecticut. When Polk came back the second time he told her he had already talked with her son about the work to be done on her home. On this second visit, Mrs. Gadson was prevailed upon to sign some papers which, she was told, she would have to sign in order for the government to assume the cost of her home repair. One of the documents that Mrs. Gadson signed on that occasion was a retail installment contract on a pre-printed form, which at the time she signed it contained blank spaces where the description of the improvements, as well as the terms of the contract should be inserted. The only information on the form at the time she signed it was her name and address and the salesman's name and license number. She also signed a notice of right of rescission and credit application on this same second visit. This contract, which was subsequently dated May 10, 1982, was filled in as to the missing particulars by someone for PVO after Mr. Polk left the Gadson residence. When finally filled in, it provided for PVO to install aluminum siding on all exterior walls, new screens on the front of the home, and steps at the front door. Cash price was $7,000.00, to be financed over 84 payments of $153.56 per month, for a total deferred payment price of $12,899.04. The documents which Mrs. Gadson signed were not given to her at the time of signing, but were delivered by Mr. Polk on May 19, 1982, some ten days after signing. When the installer, Melvin Nichols, applied for and obtained the building permit to do this work from the City of Ocala, he utilized a notarized letter of authorization signed by the Respondent. Eight days after the date on the contract, Mr. Nichols installed the siding as called for in the contract and put the screen on the front porch. He also attempted to repair the porch roof overhang but failed to do so satisfactorily and also failed to install the front steps. At some later time Mrs. Gadson was also requested to sign typewritten copies of the documents previously signed, as well as a certificate of completion, both long and short form, and a mortgage. All of the documents, with the exception of the certificate of completion, were back-dated to the date of the original handwritten contract of May 10, 1982. At no time was Mrs. Gadson advised that she was signing a mortgage on her property, or for that matter, even a contract which would cost her some $7,000.00 if she paid cash for it. She believed that she was signing "government papers" and had she known that she was encumbering her property she would not have signed these documents. Once she was informed that she had to pay, she began making payments to the best of her ability. However, she began to fall behind and is still not current or up-to-date on her payments. At no time pertinent to this complaint was Mr. Polk licensed by the State of Florida as a home improvement salesman. SZUCS Michael Brandt, a salesman for PVT first approached Thomas Szucs in August or September, 1982 in St. Petersburg, Florida. Mr. Szucs, a 44-year old unmarried man, who lives alone, while having been determined to be mentally and physically competent is, nonetheless mentally retarded. Mr. Szucs receives a monthly income from Social Security because of his disability and is the beneficiary of a trust set up by his grandparents who also left him the house in which he resides in St. Petersburg. The initial contact with Szucs took place in the home of Szucs' neighbor where Brandt was attempting to make a sale for PVT, and he asked Szucs if he was interested in having home improvement done. Apparently, Szucs indicated he was because somewhat later another salesman, Woody Ayers, came to Mr. Szucs' home on several occasions and as a result of their discussions, on September 4, 1982, Mr. Szucs signed a contract with PVT providing for the company to install aluminum soffit, facia, gutters and windows on his home. This contract was a cash sales contract in the amount of $8,640.00. Szucs was not given a copy of the contract at the time of signature but did receive a copy in the mail at a later date. Mr. Szucs contends that he was advised by Mr. Ayers that the work proposed by PVT would increase the value of the home by between eight and nine thousand dollars, but he was not advised of his right to rescind the contract within three days. The work on the Szucs' house was performed by Melvin Nichols, an independent contractor working with PVT. Mr. Nichols has never been licensed as any type of contractor in the state of Florida. He began doing the work called for in the contract without first obtaining any permits from either local or county government and continued to do so until he was advised by the St. Petersburg police that he had to either get a building permit or stop work. Thereafter, on September 9, 1982, Mr. Nichols obtained a permit from the City of St. Petersburg using a letter of authorization signed by the Respondent. Approximately ten days after Nichols started work on the Szucs' project, Mr. Szucs informed Mr. Ayers that he could not or would not pay cash for the work as was called for in the initial contract. As a result, a second contract, this time providing for the same work for the same cash price, but calling for 120 payments of $158.62 each, was signed. This contract provided that the amount due was to be secured by a mortgage on the Szucs' home and bore a date of September 4, 1982, several days prior to the actual date of signing. Mr. Szucs was not notified of his right to rescind this contract nor was he advised that he would be required to sign a mortgage on his property to secure the payments due under the contract. However, when the work was completed Mr. Szucs was asked to sign a third contract, this time the typewritten copy of that installment contract signed previously. In addition, however, he was asked to sign a typed notice of rescission, certificate of completion and a mortgage, all of which, according to Szucs, were pre-printed forms and had not been filled in at the time they were presented to him for signature. This typewritten contract and the notices of rescission all were dated September 4, though they were signed somewhat later. The mortgage, in the amount of $19,034.40, giving a security interest in the Szucs' home in favor of PVT appears to have been filled in as to its particulars after signature by Mr. Szucs. Mr. Szucs received copies of the documents he had signed , in the mail, between two and four weeks after he signed them. When Mr. Szucs' attorney, who had not been previously contacted regarding the work being done by PVT on the Szucs' residence, found out about it, he had an inspection of the work done by a state-certified contractor, who estimated that, including a 12 percent profit margin, the value of the work done was approximately $2,700.00. Thereafter, the attorney negotiated with Respondent for satisfaction of the mortgage on the Szucs' home and paid Respondent $3,000.00 for it. There was substantial difference in the testimony regarding the value of the materials provided by PVT in this work on the Szucs' residence. Respondent attempted to show that the expert who testified regarding the value of the work done was motivated by some inappropriate consideration to give a low estimate. It is found however, that even if this estimate was low and allowing for some increase, the amount charged by Respondent was exorbitant. LOREK In April, 1983, Chester and Evelyn Lorek, entered into a contract with PVT to install shingles on the roof, drip edging around the roof, and aluminum soffit and facia on all existing overhang of their home in Tampa, Florida. The cash price on the contract was $7,631.55 to be paid over 120 payments of $139.89 a month, for a total of $16,786.80. After signing that contract however, the Loreks decided to pay cash instead of financing and thereafter, on May 9, 1983, entered into a second contract with PVT to perform the same work except for the drip edge for a cash price of $5,000.00. According to normal practice, the contracts were forwarded by PVT to the expediter for that company located with PVO in Orlando, who attempted to locate a roofer to complete the project. PVO had been using Johnson's Roofing Company in Tampa for most of their work in that area. However, at this particular time, Johnson's was unavailable and attempts to locate another roofing contractor to do the job were unsuccessful. Since the work had to be performed on the roof before the aluminum work could be done, PVT entered into a contract with Gary Cook, who installed the aluminum soffits and facia, to obtain a local roofer to perform the necessary roofing work on the Lorek home. Cook, however, either could not or would not locate a licensed roofing contractor and instead did the work himself, along with his helpers. Cook is not a licensed roofer. Apparently the Loreks had some question about the work being done because on May 9, 1983, they called the building department in Tampa and requested an inspection. According to the inspector who did the actual review, Archie Arthur, Cook had failed to secure any permit for doing the work. In addition, the work that was done was in violation of the building code in that the wrong size staple was used to affix the shingles to the roof, and neither the lead boots on the roof ends nor the flashing was replaced as required. As a result, a notice of violation was issued which ceased work on the property. Because the roof work was not done, Cook was unable to complete the aluminum work as well. After the work was stopped however, the Loreks contacted another roofing contractor who was properly licensed, who obtained the necessary permit, and who completed the roofing work as necessary for an additional sum of $1,960.00. During all this time Cook was not licensed as a contractor in any capacity in Tampa or by the State, which fact either was known or should have been known to the Respondent. In any case, Respondent at no time visited the Lorek project while it was being accomplished. HUDSON In April or May, 1983, Flossie Hudson, a widow, was contacted by Bruce Coblitz about having some work done to her home in Orlando. Coblitz was an independent contractor who worked with PVI. At the time he dealt with Ms. Hudson he was licensed by the state of Florida as a home improvement salesman and he employed canvassers who obtained leads for him. Mrs. Hudson had a carport which had previously been enclosed with blocks and a tar and gravel roof, but the interior had not been completed. On their first meeting, Coblitz told Mrs. Hudson that PVI could finish off the carport, making a room out of it, including drywall, ceiling, paneling, carpet and insulation for $1,600.00 and during their discussion Mrs. Hudson got the impression that she could have the work done for payments of from $50.00 to $100.00. During that conversation on May 11, 1983, Mrs. Hudson signed a piece of paper prepared by Coblitz which turned out to be a home improvement sales contract and promissory note. The terms of the agreement provided for PVI to finish the room remodeling by installing drywall, paneling, wall-to-wall carpeting and two inside doors for a cash price of $6,000,00 instead of the $1,600.00 which Coblitz had verbally represented to Mrs. Hudson. The $6,000.00 was to be financed over 120 payments at $110.00 per month. At the time she signed the contract Mrs. Hudson also signed a notice of rescission and a credit application. Mrs. Hudson contends that Mr. Coblitz did not tell her she was signing a contract nor did she know what any of the documents she signed were. As far as she was concerned she thought they were documents authorizing a credit check. Her eyesight, she contends, is not very good and she has never been able to ready very well, even though she went through the eighth grade in school. The documents themselves had blank spaces on them which were not filled in prior to Mrs. Hudson's signature and Mrs. Hudson was not given copies of the documents at the time she signed them. Several days later, on May 16, 1983, Mr. Coblitz again visited Mrs. Hudson and had her sign a second sales contract which called for PVI to do the same work as outlined in the May 11th contract in addition to work to be done on an archway entrance and adjoining wall. The cash price was increased to $7,000.00 and the monthly payments to $128.52. Again, Mr. Coblitz did not advise Mrs. Hudson that she was signing a contract and again, she contends, she did not know that the document she had signed was a contract. According to her she was still waiting for Coblitz to bring out a contract for her to sign and, again, she was not given a copy of the May 16 contract at the time she signed it. Neither the May 11 nor the May 16 contract was signed by a representative of PVI nor was Mrs. Hudson ever informed of her right to rescind either contract within three days. Coblitz told her that the work performed by PVI would be guaranteed, but the contracts with PVI which were signed by Mrs. Hudson specifically stated that no warranties of any type were being given. The work on Mrs. Hudson's property was begun by a PVI subcontractor, Steve Kolozsvary, an unlicensed contractor. Mr. Kolozsvary failed to pull any of the required permits for this work and he testified that when he was supposed to obtain a permit Mr. Valentine, an employee of PVI would give him a letter of authorization for that particular project. None was given him for this job. As of the time the work was begun, on May 19, 1983, Mrs. Hudson had still not received a copy of the contract. The following day she mentioned it to her daughter, Teresa, who decided that no work should proceed until her mother received the contract. On May 21, 1983, when the workmen came, she refused to let the work continue and sent them away. She claimed that she did this because her mother had no contract and also because the materials which the workmen had brought to the site appeared to her to be of inferior quality. Once the work was stopped both Coblitz and Valentine, at different times, came out to Mrs. Hudson's home to find out what the problem was. When they found out that Mrs. Hudson was refusing to allow the work to proceed because she did not have a copy of the contract, Valentine proposed that a new contract be drawn up. This new contract, dated May 25, 1983, provided for the same work to be completed as was called for in the earlier contract but with a reduction in cash price to $4,006.00 to be financed over 72 months at $95.69 each. Teresa Hudson advised her mother to sign this contract because some of the work had already been accomplished and she believed they had no choice. Based upon the advice of her daughter Mrs. Hudson signed this contract unaware that she had signed any previous contracts. She was given a copy of the May 25 contract when it was signed and the following day she exercised her right to rescind that contract. This rescission was based on what was perceived as irregularities in the name of the salesman listed on the contract. Kolozsvary applied for a building permit to do the Hudson work on May 26, 1983 after the contract had been rescinded but no further work was done on the contract. At the time of rescission 60 percent of the work called for had been completed. Representatives of the City of Orlando, Building Inspection Department, inspected the property on June 1, 1983, and discovered several deficiencies. There was no fire-blocking material in the vertical and horizontal openings in the wall and the wires which held up the suspended ceiling were not properly spaced. At no time when Mr. Valentine was negotiating with Mrs. Hudson for amendments to the contract on behalf of PVI was he licensed by the state of Florida as a home-improvement salesman. An independent evaluation of the work listed in the contract that PVI proposed to do resulted in a total estimated price for the work of $3,444.40. This amount included profit and salesman's commission. It is not so far off that price of $4,006.00 contained in the May 25, 1983 contract. JOHNSON Sometime in the late spring of 1983, a canvasser employed by Bruce Coblitz, came to the Orlando, Florida home of Mabel Johnson. He advised her that PVI was starting a new business and he was inquiring of residents in her neighborhood to see if anyone desired to have an extension or addition added to their home. Apparently Mrs. Johnson indicated some interest because approximately a week later Rick Midden came to Mrs. Johnson's home and was told by her that she wanted a cement-block addition. Midden talked her out of that indicating it would be too costly and suggested that the screened-in patio in back of her home could be modified by PVI with aluminum that would be considerably less expensive than the $25,000.00 estimated cost of concrete- block. In fact, Midden told Johnson that an aluminum addition would cost her approximately $10,000.00 with monthly payments available. Midden, at the time, was not licensed as a home improvement salesman in the state of Florida, a fact which was known to Respondent's associate, Mr. Greenberg. On a second visit, Midden along with another salesman, Rick Woods, took Mrs. Johnson to visit another home in the area where PVI had constructed an addition similar to that which they were proposing for her. Mrs. Johnson was still not satisfied and wanted some more time to consider. Midden agreed to come back a fourth time. On this fourth visit, Mrs. Johnson signed what she understood was a "temporary contract", a credit application and a notice of right of rescission. She was advised at that time by Mr. Midden that when the work was completed she would have to sign another set of papers. This first contract, however, which provided for PVI to remove the existing roof over the patio, enlarge the slab, in stall a glass and screen enclosure, install paneling with insulation, wall-to-wall carpeting, and a server from the kitchen of the home, showed a price of $10,000.00 financed over 120 payments of $183.60. Total deferred price was $22,032. This contract however was subsequently voided prior to work beginning and a second contract, along with the ancillary papers, was executed on June 1, 1983, and provided for PVI to do all that was included in the original contract plus adding three electrical outlets. The financing terms were identical with that in the previous contract and Mrs. Johnson was given a copy of both contracts and the notice of rescission at the time they were signed. Thereafter on June 8, 1983, Mr. Midden applied for and obtained a building permit from the City of Orlando to do the addition to the Johnson home. Steven Kolozsvary was the individual who performed the work according to a subcontract with PVI and the addition was completed sometime that month. Once the work was completed Mrs. Johnson was requested to sign a typewritten contract, a completion certificate, a notice of right of rescission, and a mortgage dated June 20, 1983. The terms of the contract were identical to the earlier non-voided handwritten contract. Mrs. Johnson was not given copies of the typed contract at the time of signature but received them approximately a week and a half later through the mail. The work performed was not done correctly. Water seeped in around the baseboards and notwithstanding the fact that Mrs. Johnson kept calling PVI to speak with Mr. Midden, nothing was done to correct the problem. She ultimately spoke with Elliott Greenberg's son in July, 1983 and after several calls, someone finally came out to attempt repair but the problem was not corrected. After continued effort to have the problem rectified, Mrs. Johnson finally filed a complaint with Petitioner herein and also called the City of Orlando, determining that a final inspection had not been performed. It was also discovered that no electrical permit had been pulled prior to the work and in September, 1983 an inspector with the Orlando Building Department found that the aluminum siding installed was not properly grounded. Another inspection by the Orlando Building Department, dealing with electrical code violations, indicated there was no light at the back door, there were no outside receptacles and there were insufficient receptacles within the structure. As for the outside receptacles, Mrs. Johnson indicated she did not want them installed because of the potential that other people would use her electricity. Efforts by the building department to determine who had done the electrical work on the project, through calls by the building department to PVI, resulted in PVI advising that they did not know who had done the work. It was not until Mrs. Johnson filed her complaint with the Department of Professional Regulation and the City of Orlando that Respondent first came out to the Johnson residence. He determined that the water was seeping in because the slab for the addition had been poured too low and directed that the slab be repoured. This was done by Mr. Kolozsvary and the repairs were successful, approximately four months after the project was turned over as being completed under the contract. THOMAS Lizzie and Elijah Thomas are an elderly couple who live on a total of $304.00 per month Social Security payments. Any time payments they have made in the past have been based on paperwork completed by the seller. They own their house in Orlando, Florida, which they share with their grandchildren Annette and Johnnie Odums. Though Annette has completed the eleventh grade she can barely read or write and Johnnie Mae Odums, who went to school through the tenth grade, can read and write only a little. In May, 1983, Bart Mauldin, an employee of Bruce Coblitz, contacted the Thomases asking them if they were interested in having any improvements done to their home. Apparently he felt that some potential was there because some time later Coblitz himself came to the Thomas home and advised them that PVI would install a new floor, cabinets and countertops in the kitchen; a bathtub, commode, soapdish, toilet paper holder and towel rack in the bathroom; and repair the bathroom sink and replace the bathroom tile. According to Coblitz all this work would cost five or six hundred dollars and on this visit the Thomases signed some papers pursuant to Coblitz' request. It turns out that these papers constituted a home improvement sales contract, promissory note contract, and security agreement and disclosure statement dated June 1, 1983. Lizzie Thomas actually signed the documents but Elijah signed with an "X". This contract provided for PVI to do substantially the work referred to above for a cash price of $6,000.00 financed over 120 payments of $110.16 each. The payments were to be secured by a mortgage on the Thomas' home. This contract contained several blank spaces at the time it was signed by the Thomases, including the dates for the commencement and completion of the work, and the contract was not signed by a representative of PVI. Neither one of the Thomases were advised by anyone from PVI that the contract price was $6,000.00 instead of the $600.00 originally quoted. The Thomases were not given a copy of the contract at the time of signing. On the date of signing they were also requested to sign a notice of right of rescission but they were not informed as to what that document was nor were they informed verbally of the right to rescind the contract. The Thomases also signed an application for an installment loan at the same time but they were not advised of the effect of the document they were signing. About a week after the signing work was begun by Gary Householder, a subcontractor working for Bruce Coblitz. Householder and his crew worked on the home periodically for two days. On the second day, one of the workmen requested Mrs. Thomas sign a piece of paper. Because of arthritis in her hand she was unable to do so at the time. As a result she asked her granddaughter, Johnnie Mae to sign the paper which turned out to be a certificate of completion dated June 10, 1983. Neither Mrs. Thomas nor Johnnie Mae Odums knew what that document, signed on June 10, was. Neither was given an opportunity to read it even if they could, but they were told the workmen would be back the following day. The work that was performed pursuant to the June 1, 1983 contract was performed without the required building permit being pulled. On June 11, 1983, Mrs. Thomas was asked to sign more documents which included typewritten copies of the previously signed contract and ancillary papers. The typewritten contract terms were essentially the same as those contained in the hand written contract and while Mrs. Thomas signed her name, Annette Odum signed Elijah Thomas' name to the typewritten agreement. Again, the cash price stated in the contract was $6,000.00 but neither Thomas was advised of this fact nor were they advised that they would be required to sign a mortgage on their home to secure the payments. The right of rescission agreement was, again, signed without explanation, as was the long form certificate of completion. In that regard, the work covered by the contract had not been completed at the time the Odums were requested to sign that certificate. The mortgage dated June 11, 1983, provided for 120 payments of $110.16 each for a total of 13,219.00. Mrs. Thomas signed the agreement without knowing what it was and, again, Annette Odum signed her grandfather's name and witnessed her grandmother's signature. The second witness to Elijah Thomas' signature was William Valentine, the expediter, who in his capacity as notary, falsely notarized that Elijah Thomas signed the mortgage. Neither the Thomases nor Ms. Odums were advised that they had signed a mortgage on June 11, 1983. Had Mrs. Thomas been aware of the fact that she was mortgaging her home she would not have signed the document. None of the typewritten copies were provided to the Thomases at the time of signing but were forwarded through the mail several weeks later. The Respondent signed the contract and all of the required papers including the dealer certification note on the certificate of completion for PVI. Later in the month of June, 1983, Mrs. Thomas requested that her nephew, Nathanial Boldes, read some of the documents which she had received regarding the contract in question which she still felt was for $600.00. When Boldes read them he found that the cost was $6,000.00 not $600.00 and also discovered that his grandmother had already signed the mortgage on the property. He also observed the work on the project was not completed even though the certificate of completion form reflected that it was. Mr. Boldes immediately called Mr. Coblitz and requested the work be completed. Coblitz responded that the work would be completed within three days. In fact, some additional work was done but the project was not completed as requested. Therefore, Mr. Boldes again contacted PVI and in response to this call, Mr. Valentine came out and went through the house with Mrs. Thomas making a list of the things that needed to be done. He procured Mrs. Thomas' signature on this list which turned out to be a completion certificate for these items. Notwithstanding this signature and the fact that the work was not completed, in mid-July, 1983, a representative of PVI persuaded Johnnie Mae Odums to sign the Thomas name to yet another certificate of completion without advising of the nature of this document. However, when they received copies through the mail, Mr. Boldes discovered that the completion certificates had been signed even though the work had not been completed. As a result the Thomases made no payments under the contract and the matter is currently in litigation. An independent inspection of the work performed on the Thomas' home and that called for by the contract with PVI was conducted. The resulting estimate indicates that the cash price for the total project should be in the area of $4,392.00 including 20 percent sales commission and 20 percent profit. WILLIAMS Laura Mae Williams, a retired widow with limited reading and writing skills lives on a $238.00 monthly pension in a home located in Orlando, Florida. In June, 1983, Gary French and Duane Beard, came to the Williams' home to see if they could sell her some home improvements. They offered to fix the roof and put siding on her home and advised her that the company they were with, PVI, had a good deal for older people. At this point, French was sales manager with PVI and Beard was a salesman working with the company as an independent contractor. Beard and French advised Mrs. Williams that the improvements they proposed would cost approximately $4,000.00 and could be financed with payments of $80.00 per month. Mrs. Williams told them that she could not do anything without talking with her daughter about it first. Nonetheless, they convinced her to sign some papers so that after she talked with her children, everything could be taken care of. In reality, on that visit, Mrs. Williams signed a home improvement sales contract, a promissory note, a security agreement, a disclosure agreement, credit application and a notice of rescission rights. None of these were explained to her. All she was told was that the documents were necessary so that the bank would finance her purchase. This contract, dated June 16, 1983, provided for PVI to remove and replace the roof on the property for a cash price of $4,488.00 payable in 120 monthly payments of $81.69 each. The contract also provided for PVI to have a security interest in the property. None of the documents were explained to her truthfully and though they were given to her at the time she signed, she did not look at them because she had told French and Beard not to come until she had had a chance to talk with her children. She was assured that nothing would be done pursuant to anything they had discussed until she had done so and had gotten back to them. The contract which Mrs. Williams signed failed to reflect the license number of either salesman and the contract was not signed for the contractor. On June 21, five days after Mrs. Williams unwittingly signed the contract, workmen showed up at her home and began to work on the roof. The work was accomplished by Joseph Panasuk doing business as Joseph Roofing, who accomplished the work without first obtaining the required building permit. It took approximately four hours to complete the work and when the work was completed, Mr. Panasuk had Mrs. Williams sign a certificate of completion. Mrs. Williams did not ask Mr. Panasuk to leave, even though she had not called Beard and French back and agreed to have the work done, primarily because she did not know she could do so. The evening the work was completed French and Beard came out to Mrs. Williams' house with another paper for her to sign. Again, they did not explain what the document was, but merely said that it was necessary for the bank to finance the project. At this time, however, Mrs. Williams' daughter, Sylvia, was at home and urged her mother not to sign the document. Mrs. Williams did so, however, because she felt she had to. The following day, representatives of PVI came out with more papers to sign. At this point, Sylvia Williams reviewed them and noticed that the contract called for a deferred purchase price of about $10,000.00 and again urged her mother not to sign the papers. Notwithstanding this advice, Mrs. Williams, nonetheless, signed. This contract, a typewritten copy, called for the same work to be done at approximately the same price as called for in the original handwritten copy. When Sylvia Williams called the building department the following day, she found out that no permit had ever been pulled to do this work. She thereafter called PVI to check on whether a permit should be pulled and was told that it had been. When she told the woman with whom she spoke that the building department had told her no permit had been issued, she was referred to Bill Valentine, to whom she also told the results of her inquiry. Somewhat later Gary French called her back and said that because they had not read the contract to her mother, they were going to reduce the price to $2,600.00 plus interest, and would bring out a new contract for Mrs. Williams to sign. Consistent with that, on June 214, 1983, Mrs. Williams was asked to and did sign a third contract which called for the same work to be performed but which reduced the cash price to $2,603.90, plus the finance charge of $1,249.06 for a total of $3,852.90. On this same date Mrs. Williams also signed a Notice of Rescission and a mortgage in favor of PVI. That same date Mrs. Williams and her daughter took the contract to an attorney and had it rescinded. Thereafter, PVI filed a foreclosure action against Laura Mae Williams and this matter is currently in litigation. Also on June 214, 1983, three days after the work was completed, the contractor obtained a permit to reroof Mrs. Williams' home from the Orange County Building Department, the City of Orlando Building Department, even though Mrs. Williams' residence is inside the city limits. An independent evaluation of the contract and the work performed thereunder resulted in a total cost estimate for the project of $2,504.00, including commission and profit, and this figure is approximately $100.00 less than that called for in the final contract. The ultimate contract price here was not exorbitant.
Recommendation Based on the foregoing, it is, therefore: RECOMMENDED that Respondent Herbert A. Licht's certificate be suspended for a period of three years and that he pay an administrative fine of $10,000,00. RECOMMENDED this 1st day of November, 1984, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 1984. COPIES FURNISHED: Stephanie A. Daniel, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph C. Jacobs, Esquire Melissa Fletcher Allaman, Esquire Post Office Box 1170 Tallahassee, Florida 32302-1170 Paul B. Steinberg, Esquire 300 71st Street, Suite 301 Miami Beach, Florida 331141 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 James Linnan Executive Director Construction Industry Licensing Board Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 =================================================================
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order imposing on Respondent, J. Kent Staley, a $1500 fine, payable within six months, and, starting in six months, suspending his license as a real estate broker for up to 10 years or until the fine is paid in full, whichever first occurs. RECOMMENDED this 9th day of June, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1987.
The Issue Whether the Respondent committed the violation alleged in Count II of the Administrative Complaint dated August 17, 1995, and, if so, the penalty which should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation is the state agency charged with the responsibility for investigating and prosecuting complaints pursuant to Chapters 455, and 475, Florida Statutes. The Florida Real Estate Commission operates within the Department and is the entity directly responsible for licensing and disciplining persons licensed under Chapter 475. Section 475.02, Florida Statutes. The Division of Real Estate operates within the Department and assists the Commission in carrying out its statutory duties. Section 475.021, Florida Statutes. Randall F. Kladek has been licensed as a real estate salesperson since 1991, having been issued license number 0567643. His license has been periodically inactive either because he has failed to renew the license timely or because he was not employed by a broker. According to the Department's records, Mr. Kladek's license has been in involuntary inactive status since October 1, 1998, because it has not been renewed. With regard to the issues presented in this proceeding, Mr. Kladek's license expired on September 30, 1994, and his license was in an involuntary inactive status until it was renewed by the Department effective December 9, 1994. On or about October 16, 1994, Mr. Kladek approached Scott Betten, the broker for Income Real Estate, Inc., about possible employment with the agency. At that time, Mr. Betten checked with the Department to verify that Mr. Kladek had a current real estate salesperson license, and he learned that Mr. Kladek's license was inactive. Mr. Kladek had not renewed his salesperson license because he did not have the required continuing education credits. On or about October 30, 1994, Mr. Kladek returned to Income Real Estate, having completed the education requirements necessary for renewal of his salesperson license. At that time, Mr. Betten completed license renewal forms for Mr. Kladek, and he gave Mr. Kladek the completed renewal application and a form 400.5, which is used to register a licensed salesperson who has an active or an inactive license with an agency. Mr. Kladek mailed the forms to the Department on October 30, 1994, the day he received them from Mr. Betten. Mr. Betten was the broker who would supervise Mr. Kladek's activities as a real estate salesperson were he to be employed by Income Real Estate. Mr. Betten believed, albeit mistakenly, that Mr. Kladek's license would be considered active once he mailed the renewal application to the Department. Accordingly, Mr. Betten permitted Mr. Kladek to begin his employment with Income Real Estate the day after Mr. Kladek mailed the renewal application and the form 400.5 to the Department. On or about November 13, 1994, the Department returned the application packet to Mr. Kladek because he had failed to sign an affidavit attesting to the fact that, if the Department ever asked, he would provide proof that he had completed the necessary continuing education credits. Mr. Kladek had included with his application a certificate showing that he had completed the credits, but the affidavit was a new requirement for license renewal of which neither Mr. Betten nor Mr. Kladek was aware. Mr. Kladek signed the affidavit and immediately returned the packet to the Department, which duly renewed his salesperson license effective December 9, 1994. On October 30, 1994, Mr. Kladek entered into an agreement with Jonathan Polisar, who owned several rental apartments in a condominium building in Miami's South Beach area. Nine of the apartments were located at 524 Washington on Miami Beach, and one of the apartments was located at Bay Harbor Islands. The agreement provided that Mr. Kladek would manage the apartments owned by Mr. Polisar, providing basic maintenance repair and cleaning services, arranging for more extensive repairs, collecting rent, evicting tenants if the need arose, and renting vacant apartments. The agreement provided that, in exchange for his services, Mr. Kladek would be allowed to rent an apartment from Mr. Polisar at a reduced rent, and he would receive a $50.00 decrease in his monthly rent for each apartment rented, for the duration of the rental, with a permanent $50.00 decrease in his monthly rent for each apartment sold. In November 1994, shortly after Mr. Kladek moved into the apartment, Mr. Polisar terminated the agreement and demanded that Mr. Kladek vacate the apartment. At the time Mr. Polisar entered into the agreement with Mr. Kladek, Income Real Estate had an agreement with Mr. Polisar pursuant to which it was to market, rent, and sell any condominium units Mr. Polisar might have available. Neither Mr. Betten nor Income Real Estate were parties to the agreement between Mr. Kladek and Mr. Polisar, and Mr. Betten notified Mr. Polisar in writing that any agreement between him and Mr. Kladek was personal and did not involve Income Real Estate. On November 4, 1994, Mr. Kladek executed on behalf of Income Real Estate a contract in which Vincenz Amaddeo agreed to purchase and Jonathan Polisar agreed to sell condominium unit number 205 at 524 Washington on Miami Beach, the same condominium building which was the subject of the October 30, 1994, agreement between Mr. Kladek and Mr. Polisar. There is no evidence in the record to establish whether this sale would result in a decrease in Mr. Kladek's rent pursuant to his agreement with Mr. Polisar, but Mr. Kladek did expect to get a portion of the five-percent commission which Income Real Estate would receive when the sale was completed. During the time his license was inactive, Mr. Kladek did not execute any contracts for sale on behalf of Income Real Estate other than the one he executed on November 4, 1994, although he did do some rentals and "different things." Although he was affiliated with Income Real Estate until September 30, 1996, Mr. Kladek was not very active as a real estate salesperson while he was associated with the agency. The evidence is uncontroverted that Mr. Kladek did not have an active real estate salesperson license from October 1, 1994, through December 8, 1994. The evidence presented by the Department is sufficient to establish that Mr. Kladek operated as a real estate salesperson without holding a current license when he executed on behalf of Income Real Estate the November 4, 1994, contract for the sale and purchase of unit 205 of the Washington Center condominium building. The evidence is also sufficient to establish that Mr. Kladek operated as a real estate salesperson with respect to the agreement he entered into with Mr. Polisar. That agreement clearly contemplated that Mr. Kladek would manage, rent, and sell apartments owned by Mr. Polisar in exchange for compensation, even though the compensation was in the form of a decrease in his rent rather than by commission. Finally, the evidence is uncontroverted that Mr. Betten, the broker for Income Real Estate, incorrectly advised Mr. Kladek that his license would be valid and current at the time he mailed the completed application to the Department on October 30, 1994. The evidence is also uncontroverted that Mr. Kladek relied on Mr. Betten's advice when he operated as a real estate salesperson prior to learning that his license was not, in fact, renewed on October 30, 1994.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order: Dismissing Count I of the Administrative Complaint; Finding Randall F. Kladek guilty of violating Section 475.42(1)(a), Florida Statutes (1993) and, therefore, Section 475.25(1)(e), Florida Statutes (Supp. 1994), as set forth in Count II of the Administrative Complaint; Suspending Mr. Kladek's real estate salesperson license for a period of thirty (30) days; Imposing an administrative fine against Mr. Kladek in the amount of $500.00; and Requiring Mr. Kladek to complete forty-five (45) hours of post-licensure real estate salesperson education, in addition to the continuing education requirements for renewal of his license. DONE AND ENTERED this 4th day of June, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings This 4th day of June, 1999.
The Issue The issue for consideration in this hearing is whether Respondent's license as a real estate broker in Florida should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issue herein the Petitioner, Division of Real Estate, and the Florida Real Estate Commission were the state agencies responsible for the licensing of real estate professionals and the regulation of the real estate profession in Florida. Respondent was licensed as a real estate broker with license number 0414476. Respondent was operating as a real estate broker and operated a real estate brokerage under the name Roney Realty located at 424 Beach Drive Northeast, Number 205, in St. Petersburg. In early 1995, Kathleen M. Mitchell, a single mother and licensed practical nurse, while attending a garage sale, noticed a two bedroom house for sale at 805 59th Street South in Gulfport and called the broker's telephone number shown on the sign. Respondent was the broker listed. On the basis of that telephone call, Respondent and Ms. Mitchell met at the house, owned by Respondent's sister. At the time, Ms. Mitchell advised Respondent that she had credit problems and was burdened with a previous FHA mortgage which was in default. In response, Respondent urged her not to worry and assured her he could get her financing even though she had undergone a prior bankruptcy. He also indicated that the selling price for the house was variable, depending on financing and the amount of the down payment. Ms. Mitchell contends that Respondent indicated to her that he would represent both buyer and seller in a dual agency arrangement, which he got her to acknowledge in writing, and claimed he would not take a commission on the sale. The initial contract signed in this case, however, lists a commission of $1,925.00 to be paid by the seller. This inconsistency was not explained. As a result of the initial negotiations which began in January, 1995, Ms. Mitchell signed a contract for the purchase of the property on February 13, 1995, which, she claims, was to be effective in March, 1995. This agreement, reflecting a sales price of $55,000 also indicates that Ms. Mitchell had made a $200.00 cash down payment, and called for an additional payment of $800.00 within 5 days of signing and an additional $650.00 at closing, to include buyer's closing costs and prepaid items or prorations. This left a balance to be financed of $53,350. There were no other handwritten clauses placed on the contract form. Ms. Mitchell paid the initial $200.00 and agreed to pay the additional $800.00 when she moved in. On the basis of that contract and the deposit made, Ms. Mitchell was allowed to move into the house. Approximately two weeks later, when it became obvious that her financing was going to be a problem, Mr. Roney brought a second contract to the house for her to sign. At this time, Mr. Roney suggested that while the parties were waiting for her financing to be approved, Ms. Mitchell could rent the house for $500.00 per month. Ms. Mitchell agreed to do this if all the defects in the house, which she had identified and reported to Respondent, were fixed. She claims that he verbally agreed to fix everything and she thereafter signed the second contract, which is undated as to signature, but which bears an effective date of April 20, 1995. The second contract reflects a purchase price of $56,650, a deposit of $2,832.50, and a balance to finance of $53,817.50. Ms. Mitchell admits to having made the $200.00 down payment, and it is not clear whether she also paid the $800.00, but at one point in her testimony indicated that is all she paid by way of down payment. She has no idea where the figure of $2,832.50 comes from. Yet, at another point in her testimony, she claims to have given Mr. Roney $1,650.00 on March 1, 1996, which money he put into Stewart Fidelity Title Company's escrow account. The contract also reflects that the deposit is being held in escrow by Stewart Fidelity Title Co. No information was presented as to the current state of the deposit. This contract shows substantial hand-written modification to the standard contract clauses which clearly reflect that changes were made on July 7, 1995, and were "added after signing." However, there are substantial, modifications to paragraph 21 of the contract form, "additional terms", which are confusing as to when they were added and what they mean. For example, one added clause calls for the buyer to make monthly payments of $600.00 until closing ($100.00 per month credited back to buyer at closing). Another provides that the buyer accepts the property as is from day of possession and agrees to maintain the property until closing. A third indicated that the seller agrees to credit $650.00 toward buyer's costs upon closing, and a fourth states that if the buyer cannot obtain a mortgage within one year of possession, the seller may convert the agreement to a lease. The difficulty in interpretation of the above rests in the fact that arrows pointing to various of the comments are not defining in their application. For example, one arrow comes from the word "closing" down the side of the paper into the Acceptance/Rejection section where is stated, "as is meant landscaping [sic]." Another arrow points to the word "may" in the last addition and reflects, "7-7-95 added." Ms. Mitchell adamantly contends that when she signed the second contract, none of the hand-written additions were on it. Mr. Roney admitted as much at hearing, but no informationwas presented to indicate if the additions were agreed to by Ms. Mitchell at any time. She contends that when she saw those post-signing additions, she took the document to her mortgage person who directed her to contact Respondent and stop further proceedings. When Ms. Mitchell did that, she claims, she wastold by Mr. Roney not to talk to her mortgage man again, and that his, Mr. Roney's, mortgage broker would handle the obtaining of her mortgage from then on out. When Ms. Mitchell recounted those instructions to her original mortgage broker, he advised her to contact Respondent's escrow agent, get her deposit back and cancel the contract. Respondent admits to having requested Ms. Mitchell use a different mortgage broker but asserts this was because her broker was not having any apparent success in getting her qualified. Ms. Mitchell lived in the house in question for two months before she moved out. Upon the advice of an attorney, she claims, she paid no rent while she occupied the premises. While she occupied the property, she paid $250.00 to have it appraised by a state certified residential real estate appraiser who opined that as of May 9, 1995 the property was valued at $49,500. In the addendum to the appraisal report, the appraiser stated: The roof has active leaks and improperly installed areas; The front soffit has loose conditions; The electrical system has unsafe wiring and improper size fuses; The heating and AC units are not operating properly ("No source of heat"); The plumbing system has some deficiencies and possible leaks; The pool is in need of "Major Repair", including repair of leaking conditions at the main drain and tiles; termite damage was noted; the water heater needs repair (or replacement), and it is exposed to weather conditions; Window and door screens are missing; The lawn sprinkler is damaged and partially disassembled The storage shed has rust conditions. Though at hearing Respondent attempted to dismiss this appraisal as being based on the home inspection reports done at Ms. Mitchell's request previously and given the appraiser, and not his personal inspection, a review of the document clearly indicates the conditions noted above were determined from review of that report "and/or observation by the appraiser." Ms. Mitchell experienced first hand many of the problem areas noted in the appraisal report. When she mentioned to Respondent that the screen door was missing, he reportedly told her it wasn't necessary. When she complained to Respondent that she had no hot water for several days, he sent over a repairman who ultimately corrected the problem. The repairman's statement, dated "May, 1995", reflecting a charge of $445.00 for his service, indicates he repaired a water leak on the hot water heater; unblocked a restriction in the hot water supply pipe; and replaced defective control knobs on the shower. He also cut the side of the kitchen counter to fit in a new stove and delivered a replacement refrigerator with an ice maker and reconnected the water line to it. This latter installation was the result of Ms. Mitchell's continuing complaint that the refrigerator did not work for quite a while which resulted in her losing a substantial amount of perishable food. The first time that happened, she though it might be her fault and she replaced the lost food. However, when it happened again, she complained to Respondent and he told her to get it fixed. She did, at a cost to her of $100.00, which Respondent did not pay back. Finally, a refrigerator repair man was sent to the property on both April 4 and April 19, 1995. He finally recommended the unit not be repaired but replaced. This was done. When Ms. Mitchell complained to Respondent that the heating and air conditioning unit in the living room did not work, and that the bedroom unit did not heat, she admits that Respondent had a repairman come out and look at the unit. Though she claims the repairman told her it would take $483.00 to repair it, she appears to have confused the appliances, as the repairman's statement, dated April 19, 1995, refers to an estimated cost of $483.00 to replace the compressor on the refrigerator, not the heater/air conditioner. There is no evidence to indicate how the problem with those units was resolved. Ms. Mitchell contends that when she first saw the swimming pool, before she contracted to buy the house, it was clear and the pump was running. When she thereafter heard a noise in the pump, in February, 1995, before she moved in, she reported this to the Respondent. Nothing was done about it. After she moved in, the pool rapidly became unusable. The pump motor was inoperative and the water turned green. Ms. Mitchel claims she called Respondent almost daily about the pool. He told her his sister had the motor removed for repairs and he would get it back. The motor was subsequently returned, along with the pool equipment which had been removed, but the pool leaked, requiring her to add water every day, and she could not keep the water clear. In late April, 1995, a pool man was sent to the property who, according to Ms. Mitchell, indicated that there was a need to replace loose tiles and mastic because of the age of the pool, and a leak at the main drain. It is not clear from the evidence presented if these repairs were made. When the appraisal report was rendered, showing a fair market price considerably less than what she had contracted to pay, Ms. Mitchell advised Respondent on several occasions that she to cancel the contract. On May 2, 1995, after she had seen an attorney and another real estate broker, she wrote to Respondent requesting either that he refund the deposit money she had placed with him and reimburse her in the amount of $500.00 for her personal expenses, in which case she would vacate the property within one week of receipt of the money, or return her deposit within one week, in which case she would vacate the property by June 1, 1995. In either case, she indicated she would pay no more rent. In that regard, it appears she had paid no rent up to that time, though she had agreed to pay rent in the event they could agree upon the terms of a contract and the property was repaired. She claims she did not expect to live in the property rent free, but believed that what she had paid out in repairs was fair rent for her occupancy. No clear total figure for what she paid out was provided. In response, Ms. Mitchell received a letter from the Respondent in which he demanded payment of the rent due. Thereafter, on June l, 1995, Ms. Mitchell received a second letter from the Respondent in which he stated he assumed she had agreed to deduct the amount due for rent from the deposit money she had placed with him and which he held in escrow. According to Respondent's calculations, Ms. Mitchell owed $1,271.56 in back rent after crediting her with $100.00 of the $600.00 per month rent payment she was to make. When this $1,271.56 was deducted from the $1,603.45 escrow balance held by him, $331.89 would be left in the escrow account. Respondent gave her the choice of doing that or of paying what was owed in case, leaving the entire escrow account untouched. He advised her she must make her choice and advise him and the escrow agent within forty-eight hours. Respondent did not satisfactorily explain his calculations at hearing. From the state of the evidence presented, it was impossible for the undersigned to determine exactly how much money Ms. Mitchell paid by way of deposit, rent, or repairs. Between the receipt of Respondent's first and second letters, Ms. Mitchell spoke with him about the condition of the house and what she wanted to do with regard to it. At no time did she authorize Respondent to make any deduction from the amount in escrow. In the interim, she began to look for another house and to seek alternative funding. She also tried to contact Respondent but she was unable to do so, reaching only his pager. Finally, she received a three-day notice dated June 20, 1995 to pay the rent due or vacate. In response, she wrote an undated letter to Respondent in which she said she was sending $1,000.00 to pay $500.00 rent for both May and June, 1995, but neither mailed the letter nor sent the money. Thereafter, she received a second three day notice dated June 30, 1995, directing her to pay the rent due or move out. This notice was left in her mail box by the Respondent. She neither paid the rent nor moved out at that time. Ms. Mitchell finally moved out of the property in issue on July 18, 1995 and thereafter, on a weekly basis, either verbally or in writing, demanded return of her deposit. She did not get it back. Mr. Roney's account of the beginning of the parties' relationship is consistent with that of Ms. Mitchell, except that Ms. Mitchell initially indicated the property could not be worth more than in the mid-forty thousand dollar range. In response, Respondent claimed to have done a market analysis on the property which supported the asking price, and because his sister had put a lot of money into the property, it could not be sold for a price as low as even in the high forty thousand dollar range. It would appear from the independent appraisal done of the property, the true value was closer to Ms. Mitchell's estimation rather than Respondent's. Nonetheless, Ms. Mitchell liked the property and agreed to buy it at the asking price, after she had looked it over with a contractor friend of hers. Respondent admits that Ms. Mitchell was forthright with him in disclosing her financial problems. She told him of her bankruptcy of several years previous, and in response to his questioning, noted several other problems, none of which, by her account, were her fault. When Ms. Mitchell called Respondent on February 13, 1995, indicating she was ready to sign, he referred her to a mortgage company which he felt could help her. Based on what information Ms. Mitchell had provided, Respondent had been told that her financial problems were "fixable". As a result, the first contract was signed and the financing process initiated. On March 18, 1995, Ms. Mitchell called Respondent and indicated she wanted to move into the house prior to closing because her current landlord would neither acknowledge nor fix defects in her property, and she had to get out. Therefore, on or about March 20, 1995, Respondent re-wrote the contract and requested she use another mortgage broker as a condition of taking possession prior to closing. Respondent claims that the seller's disclosure as to the condition of the property was accurate but Ms. Mitchell wanted an independent inspection done to which Respondent agreed. He insisted, however, that if she wanted to move in before closing, she would have to take the property "as is." He advised Ms. Mitchell that his sister had not lived in the property for a year. It was not clear from the evidence presented whether the property was vacant for that entire year or whether it had been rented out. Ms. Mitchell moved in after signing the second contract. Respondent claims Ms. Mitchell called almost daily with some complaint or other and he would have each one fixed. Finally, he met with her and the handyman and they went around to check everything out. She seemed satisfied. Nonetheless, after that Ms. Mitchell called to complain about the swimming pool. Respondent's sister and the handyman both went to the house to explain how to work the filtration system. To insure that there was no leak in the pool, Respondent gave Ms. Mitchell the name of the pool company which had serviced the pool for ten years so that if anything went wrong, she could contact them directly to have it checked and get instruction. While Respondent contends the pool company report indicated no leak and no major problems, Ms. Mitchell wrote on the invoice submitted by the repairman dated April 25, 1993, "... notified me and Mr. Rony [sic] of need to replace loose tiles and main drain leak and re- mastic due to extreme age of pool." Unfortunately, no direct evidence was presented which resolves the apparent inconsistency in the evidence. Mr. Roney claims he tried to remedy any problem Ms. Mitchell had with the house. For example, on April 3, 1995, she called to complain about the refrigerator. On April 4, 1995 he told her to call whomever she wanted, and if the estimate were reasonable, she could deduct the repair charge from the rent. If the charge were estimated to be major, she was instructed to call back. When she called and said the charge would be $100.00, he authorized it. However, a week later, Ms. Mitchell again called and complained about the refrigerator and Mr. Roney replaced it the next day. The problems with the refrigerator are documented by independent evidence of record. The replacement there was admitted by Ms. Mitchell. Respondent asserts that the delinquency notices and track toward the closing. When he found out that Ms. Mitchell was trying to get an appraisal done on the property, he tried to tell her that an appraisal would be done as a part of the mortgage process, but she wanted her own. The results of that independent appraisal were discussed previously. Sometime thereafter, Ms. Mitchell told Respondent she wanted out of the contract. The seller agreed to let her out if Ms. Mitchell would pay some rent for the period she occupied the property. As a result, Respondent tried to get her to pay. When she would not, he sent the eviction notices. Respondent admits he did not receive $2,853.00 in deposit money from Ms. Mitchell. That figure cited was the result of her representations to him that she could come up with it. When the contract was signed, she gave him a check for a part of it and said she'd come up with the balance, but she never came up with the full amount. Any deposit payments made by Ms. Mitchell were deposited with Stewart Title Company where it remains. It is impossible to determine how much was paid as deposit by Ms. Mitchell and how much, if any as rent. Respondent asserts Ms. Mitchell never made any claim to him for return of her deposit. Any claims for return were all made to Stewart Title. Ms. Roney, the owner, did not want to lease the property or sell it on a lease option. She wanted to sell it outright because she needed the money for other investments. She agreed to a lease-purchase arrangement only because the mortgage broker assured her Ms. Mitchell could clear her credit and the sale could go through. She also agreed because Ms. Mitchell had had the property inspected and appeared to be satisfied with its condition. Ms. Roney claims she had no problems with the pool when she lived there and also claims that since the property has been sold, the new owners have not contacted her regarding any problems with the pool. She would not approve a refund of deposit under the conditions of this dispute. Respondent contends there have been no complaints filed against him for the practice of his real estate profession in the 15 years he has been licensed. No evidence of prior misconduct was shown.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a final order finding Respondent not guilty of misrepresentation and breach of trust in a business transaction and dismissing the Administrative Complaint. DONE and ENTERED this 13th day of December, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 13th day of December, 1996. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Paul H. Roney, Jr. 424 Beach Drive Northeast, Suite 205 St. Petersburg, Florida 33701 Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue At issue herein is whether respondents' real estate licenses should be disciplined for-the alleged violations set forth in the administrative complaint. Based upon all of the evidence, the following facts are determined:
Findings Of Fact At all times relevant hereto, respondent, Juan Rios, was a licensed real estate broker having been issued license number 0155126 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Victoria R. Rios, is a licensed real estate broker-salesman having been issued license number 0331183 by petitioner. The Rios are husband and wife and presently reside at 855 80th Street, #1, Miami Beach, Florida. On December 13, 1982, Juan Rios obtained a six-month multiple listing agreement to sell a house located in Hacienda Estates at 11451 S.W. 33rd Lane, Miami, Florida. The agreement was executed by Rios "As Realtor" and by the property owner, Mercedes Garcia. At Mercedes' request, the Rios placed an initial sales price of $145,000 on the home. On December 15, a similar agreement was executed by Rios and Garcia on condominium unit 9B, Laguna Club Condominium, 10710 N. W. 7th Street, Miami, Florida. That property was also owned by Garcia. Although the agreement introduced into evidence does not contain Rios' signature, at final hearing Juan Rios acknowledged that he had executed such an agreement. The listing agreements provided that if the properties were leased during the term of the agreements, the listing realtor would receive a brokerage fee of 10% for such leasing. The agreement also provided that the realtors were not responsible for vandalism, theft or damage of any nature to the property. Garcia is a native and resident of Venezuela, where she owns a radio station. The two properties in question were previously owned by her father. When the father died, apparently sometime in 1982, Mercedes inherited the house and condominium. The Rios were friends of the father, and agreed to list and manage the properties as a favor to the deceased. Mercedes left the country after the agreements were signed, and has apparently not returned. Although she is the complainant who initiated this matter, she did not appear at final hearing. The house at 11451 S. W. 33rd Lane had been vandalized prior to the listing agreement being signed. According to documents introduced into evidence, the property has also been the subject of subsequent vandalisms, the nature and extent of which are unknown. A tenant was eventually procured by Mercedes' aunt in February, 1983 at a monthly rate of $800. The tenant, a Mrs. Ramirez, paid some $4,800 in rents and deposits before she was killed at the home in June, 1983. The Rios spent some $2,644.36 of the $4,800 on repairs to the vandalism and for general maintenance. They also retained a 10% commission for their services, or $480. That left $1,675.64 owed to Mercedes. No lease was apparently ever signed by Ramirez, or at least none was given to the Rios by the relative who procured the tenant. The home was eventually sold to Mercedes' aunt for $85,000.1 None of the rental monies were placed in the Rios' trust account. The condominium unit was rented in June, 1983. The tenant, Oscar Ruiz, had answered an advertisement run by the Rios in a local newspaper. Although Ruiz executed a lease to rent the unit at a monthly rate of $500, the Rios did not have a copy of same, and claimed none was kept in their records. According to the Rios, Ruiz continued to rent the unit through April, 1984, or for eleven months. Total monies collected by the Rios from Ruiz, including a $500 security deposit, were $6,000, of which $3,364.86 was spent for maintenance, utilities, two mortgage payments, and a $500 payment to the owner (Mercedes). An additional $40.33 was spent on a plumbing bill, and $600 was retained as a commission by the Rios. This left $2,724.53 owed to Mercedes. None of the rental monies were placed in the Rios' trust account. In the spring of 1984, Mercedes retained the services of an attorney in Miami to seek her monies due from the Rios. Up to then, she had received no income or accounting on the two properties. The attorney wrote the Rios on several occasions beginning in April 1984, asking for a copy of the lease on the condominium unit, the security deposit, an accounting of the funds, and all other documents relating to the two, properties. He received his first reply from the Rios on May 3, 1984 who advised him that they had attempted to reach Mercedes by telephone on numerous occasions but that she would never return their calls. They explained that rental proceeds had been used to repair vandalism damage and structural defects. When the attorney did not receive the satisfaction that he desired, he filed a civil action against the Rios on October 10, 1984. On October 26, 1984 the Rios sent Mercedes a letter containing an accounting on the two properties reflecting that she was owed $4,400.17 by the Rios. To pay this, they sent a $140 "official check," and a promissory note for the balance to be paid off in 40 monthly installments at 10% interest. They explained that their real estate business had closed, and due to financial problems, they were unable to pay off the monies due any sooner. They also asked that she instruct her attorney to drop the suit. Mercedes rejected this offer and has continued to pursue the civil action. It is still pending in Dade County Circuit Court. At final hearing, the Rios characterized their involvement with Mercedes as a "professional mistake," and one undertaken out of friendship for Mercedes' father. They acknowledged they did not use a trust account on the transactions and that they had used the $4,400 in rental money due Mercedes for their own use. They considered the excess rent proceeds to be compensation for other "services" performed by them on behalf of Mercedes. However, there is no evidence of any such agreement between the parties reflecting that understanding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is Recommended that Juan and Victoria Rios be found guilty as charged in Counts II and III, and be found guilty of culpable negligence and breach of trust in Count I. It is further recommended that Juan Rios' license be suspended for one year and that Victoria Rios' license be suspended for three months. DONE and ORDERED this 20th day of January, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January, 1986
The Issue The issues for consideration in this case concern the petition and challenge to the validity of Rule 7D-32.001(4); Rule 7D-32.003 and Rules 7D- 32.004(1) and (2), Florida Administrative Code. The basis for the challenge is premised upon an alleged vagueness, inadequacy in the establishment of standards for agency decisions, the vesting of unbridled discretion in the agency and the contention that the rules are arbitrary and capricious.
Findings Of Fact Petitioner is the owner of Lake Waldena Resort, a mobile home park located in Marion County, Florida. That park is regulated under the provisions of Chapter 723, Florida Statutes. Petitioner is a mobile home park owner within the definition set out in Section 723.003(7), Florida Statutes. In addition, Petitioner is presently charged, through a notice to show cause/administrative complaint, with violating Section 723.037(3), Florida Statutes and Rule 7D- 32.004(1), Florida Administrative Code, by his alleged refusal to meet with a designated homeowners' committee within 30 days of the giving of notice of a proposed increase of lot rental. That disciplinary case was heard on the same date as the present case and is awaiting disposition through a recommended order. If Petitioner is found to have violated provisions within Chapter 723, Florida Statutes and Chapter 7D-32, Florida Administrative Code, he may be subjected to a civil penalty or have other administrative sanctions imposed. The rules that are under challenge are related to the formation of the homeowners committee; the activities of that committee in ascertaining the basis for the park owners' reason for a lot rental increase; the obligation of the park owner to meet with the committee and the opportunity of the park owner to request certification of the committee's selection to participate in the meeting envisioned by Section 737.0037(3), Florida statues. Respondent by the authority set forth in Section 732.006(6), Florida Statutes, is authorized to promulgate rules which it deems to be necessary to implement, enforce, and interpret the provisions of Chapter 723, Florida Statutes. In accordance with that authority and the authority set forth in Section 723.037, Florida Statutes, it enacted the rules which are the subject of this dispute. Intervenor is a Florida non-profit corporation which represents over 150,000 mobile home owners and tenants in Florida and has as its purpose the representation of those mobile home owners in various activities, to include legal issues. The Petitioner and Respondent and the mobile home owners whom the Intervenor represents are substantially affected by the decision concerning the validity of the aforementioned rules.
Findings Of Fact After a realtor told Robert Edward Poland that the Flagship Bank was foreclosing on Villa Rosa Mobile Home Park in Jacksonville Beach, Mr. Poland and his wife offered to purchase the property. The incompetency of the owner, Mrs. Ritchie, then in her eighties, together with ensuing legal proceedings, complicated negotiations. But on August 21, 1986, Robert Edward Poland and Jacqueline Poland became joint owners of Villa Rosa Mobile Home Park. A portion of the park they acquired in fee simple, but another portion (now known as Beach Boulevard Trailer Park) they acquired only as a life estate pur autre vie. On the death of Mrs. Ritchie in mid-October 1987, the life estate was extinguished, and that portion has become the property of Mrs. Ritchie's daughter, Elizabeth Drey, and possibly the daughter's husband, Richard Drey. Only beginning with rent for February of 1989, however, have the Dreys begun receiving income from the trailer park. Rent Raised On August 21, 1986, the day they acquired ownership, the Polands gave tenants written notice of their intention "to adjust rent effective December 1, 1986" to $130 a month for a single mobile home lot and to $155 monthly for a double wide mobile home on a single lot. This proposed rental increase did not pertain to lots 3, 6, 13, 15, 47, 48, 49, 50, 51, 52, 53, 54, 55, or 007, which were rented only to over-nighters. Perhaps misunderstanding the notice, Tom Williams on Lot C began paying a higher amount on October 1, 1986, before the increase took effect. The following month, Debra Black Wood, J. E. Turner and James Mahoney also paid the increased rent prematurely. In their cases, and in the case of Mr. Williams, the Polands accepted the money but credited the surplus to the tenant. Not counting the lot which the boundary between the Drey property and the Polands' property divides, Mr. and Mrs. Poland offered for rent or lease 26 or more mobile home lots as residences, both before and after Mrs. Ritchie's death. The following tenants' monthly rent increased by the amounts indicated on December 1, 1986: Name of Tenant Lot No. Amount of Increase Ila Story 1 $30.00 Rosa Robinson 2 30.00 Rick Tahey 4/5 55.00 Virginia Dawson 7 5.00 Isabe Sutcliffe 8 30.00 Deborah Blackwood 9 5.00 B. E. Turner 12 30.00 Ingrid C. Fegan 14 30.00 Helen Marin 17 40.00 Alden Waterman 18 30.00 Ethel Dunsmoor 19 30.00 Martina O'Hare 20 30.00 Zora Hyde 21 30.00 William Vollkmer 22 30.00 Richard Rasmussen 23 5.00 Marjorie Barnes 24 30.00 James Mahoney 26 30.00 Roger Zucco 27 5.00 George Bunting 29 55.00 Robert Grabel 30 55.00 David Escopie 31 30.00 Catherine Stevens 32 30.00 Richard Law 33 30.00 Maxwell Page 35 30.00 Helen Hines 36 5.00 Norman Peterson 37 5.00 Hernandez/Johns 38/39 25.00 Lester Rogers 40 30.00 Rita Boyer 41 30.00 Thelma Thornton 42 30.00 Maxwell Page 43 30.00 Kenneth Driscoll 44 55.00 Edna Praine 45 55.00 Cassus Powell 100 30.00 David Koehler 101 5.00 Jerry Welker 102 62.50 John Embleton 103 5.00 Corrine Beach 104 55.00 Clyde Wiley 105 30.00 Candie Blasman 106 30.00 Harry Wilson 107 30.00 Stanley Dolka A 30.00 Goffery Riser D 5.00 William Page E 30.00 Pat Pattillo F 40.00 Roy Pike G 30.00 Frieda Suomella H 5.00 Charlotte Reid I 30.00 Bernard Hakes J 30.00 Herbert Davis K 30.00 Lee Haley L 30.00 Heide Alexander M 30.00 Joseph Moore N 5.00 Mary Lo Wampler O 40.00 Ernest Grizzard P 30.00 Bertha Martin Q 40.00 Cathy Lumbar R 65.00 Ruth Pooley S 5.00 Norma Baker U 5.00 H. W. DeMoss V 30.00 Arthur Pitman W 40.00 Jesse Wagnor X 5.00 James Hicks Y 5.00 Robert Wilder 00 20.00 At hearing, Mr. Poland testified to a total of 85 lots of which "seventy-three are singlewide [including some devoted to overnighters], and the balance would be overnighters or doublewides." T.88. According to DBR records, respondents reported 87 lots when applying for approval for their prospectus. Petitioner's Exhibit No. 3, pp. 000017, 000021. Past Practice Historically, the park had been run on the basis of oral agreements, creating month-to-month tenancies. Such records as existed when the Polands acquired ownership of the mobile home park reflected 13 different amounts charged different tenants for equivalent mobile home lots. Apparently Mrs. Ritchie had played favorites. A longtime resident testified that the rental rate structure was "kind of on the buddy/buddy system." T. 68. From time to time, and on no more than a month's notice, Mrs. Ritchie had raised rents. Robert L. Davis, who moved to the trailer park in October of 1976, originally paid $50.00 a month. On September 1, 1983, monthly rent increased from $50.00 to $75.00; and on December 1, 1983, from $75.00 to $100.00. One longtime resident, Katherine Stevens, "imagined" (T.127) that Mrs. Ritchie had asked for rent increases to defray utility rate hikes, but written notices of increases offered no explanation. T.48-49. Like Mr. Davis and Ms. Stevens, Robert Wilder, who seeks no money in this proceeding (T.75), was a tenant at the mobile home park before June 4, 1984. Until May of 1986, nobody ever received a prospectus. On June 10, 1983, however, rules and regulations were drawn up which provided in paragraph 20: Management specifically reserves the right to increase rental rates, fees, charges or assessments imposed on resident either by amendment or by addition to these rules, provided thirty (30) day written notice is given. Rosa Ritchie herself gave Ms. Stevens and other tenants a copy of the rules and regulations which first set out in writing her practice of giving thirty days' notice before raising rents. Regulatory Approval Only after the Polands had acquired the property, and announced their intention to raise rents, did Mr. Poland learn of the requirement that a prospectus be furnished tenants. On September 9, 1986, he wrote Mr. John D. Floyd of DBR as follows: With regards to the prospectus of Villa Rosa, please find enclosed a copy of the Rules and Regulations which are provided each tenant prior to renewing or extending `an existing rental agreement and prior to entering into a new rental agreement. This document was previously submitted to your Division and I assume that it remains acceptable. Petitioner's Exhibit No. 3. In response, Senior Clerk Pamela T. Parker of the Department of Business Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, wrote Mr. Poland on September 19, 1986, listing various "deficiencies for form." With regard to the prospectus, she wrote, among other things: The prospectus fee was not in accordance with Section 723.011(1)(d), Florida Statutes. Please submit a check for the appropriate amount. Petitioner's Exhibit No. 3. Having received this reply, Mr. Poland wrote Ms. Parker on September 25, 1986, as follows: Enclosed please find the Mobile Home Prospectus, Filing Statement and Filing Fee. Currently, there are no rental agreements in writing for the mobile home park. All agreements are oral, to the best of my knowledge. Petitioner's Exhibit No. 3, p. 000018. Petitioner received Mr. Poland's letter of September 25, 1986, the following day. The letter is marked "RECEIVED FISCAL SEP 26 1986." DBR's Division of Florida Land Sales, Condominiums and Mobile Homes did not "process" the $150 check which accompanied the letter, until October 15, 1986, however, when somebody marked the letter "RECEIVED FISCAL OCT 15 1986" and crossed through the earlier received stamp. Another eight days passed before a form letter from the Division went out to Mr. Poland advising him of the Division's intention to examine the contents of his filing, to ensure its adequacy, and promising him he would "be notified as to the results of this examination within" forty five days of October 15, 1986. On November 20, 1986, more than 45 days after the prospectus had been received, the Division sent another letter to Mr. Poland, signed by Bridget St. Clair, apprising Mr. Poland of a number of deficiencies in the prospectus. On December 2, 1986, Mr. Poland made a second submission. In a cover letter addressed to Ms. St. Clair, he wrote: During our recent telephone conversation, you indicated that a prospectus is not necessary unless a rate increase Is anticipated. Since I have no intention of raising rates for the next year, I do question why this prospectus is necessary. Your thoughts on this point would be greatly appreciated. Petitioner's Exhibit No. 3, p. 000013. In May of 1987, after several further emendations, Mr. Poland was told over the telephone that the prospectus submitted in December passed muster, as revised. Having received oral approval, he asked an employee, Jack N. Justice, to deliver prospectuses. Mr. Justice delivered by hand to every resident who was home a copy of the prospectus and, whenever somebody was not at home, put a copy in the mail box. (Before these deliveries, the planned increase in rent had taken effect, as of December 1 of the previous year.) Petitioner gave written notice of approving the prospectus by letter dated May 27, 1987. The approved prospectus apprised tenants of the landlord's intention to pass on "ad valorem property taxes or utilities charges ... during the term of the lot rental agreement ... [p]rorated equally among all lots," Petitioner's Exhibit No. 1, p. 46, and warned tenants that an increase in water, sewer or garbage collection charges or property taxes "may result in an increase in the home owner's lot rental amount." Id. Rent Raised Again On June 25, 1987, Mr. Poland sent out a second notice proposing another increase of rent, to take effect on October 1, 1987, "due to the increase in real estate taxes and for capital improvements, including the water pressure problems complained of." Petitioner's Exhibit No. 4. The increase amounted to $15.00 per month for each single mobile home on a single lot, and to $20.00 for double wide mobile homes (or other mobile homes on double lots.) Id. On April 7, 1987, the City of Jacksonville Beach increased water and sewer rates. Mr. Poland's claim that the increase resulted in an average additional charge of approximately $14.12 per month per lot went unrebutted. A garbage collection container had to be added at $100 ($1.15 per lot) a month; $330 was expended to install a new water meter. Ad valorem taxes increased between 1985 and 1986, but were not shown to have risen at any time after December 1, 1986. The following tenants paid increased rent in the following monthly increments, effective October 1, 1987: Name of Tenant Lot No. Amount of Increase *Ila Story 1 $15.00 Mark Robson 2 15.00 *Rick Tahey 4/5 25.00 Seahorn/Gulledge 7 15.00 *Isabe Sutcliffe 8 15.00 William R. Hernandez 9 15.00 Bertie Willis 10/11 25.00 *B. E. Turner 12 15.00 *Ingrid C. Fegan 14 15.00 Ray Brozoski 16 5.00 *Helen Marin 17 15.00 *Alden Waterman 18 15.00 *Ethel Dunsmoor 19 15.00 *Martina O'Hare 20 15.00 *Zora Hyde 21 15.00 *William Vollkmer 22 15.00 William E. Wolfe 23 15.00 H. D. Seahorn 25 15.00 *James Mahoney 26 15.00 *Roger Zucco 27 15.00 Roland Page 28 15.00 *George Bunting 29 15.00 *Robert Grabel 30 15.00 Joseph Mickey 31 5.00 *Catherine Stevens 32 15.00 *Richard Law 33 15.00 Edna Barrett 34 15.00 *Maxwell Page 35 15.00 *Helen Hines 36 15.00 Christ. Hooley 37 15.00 *Hernandez/Johns 38/39 20.00 Arminta Rogers 40 15.00 *Rita Boyer 41 15.00 *Thelma Thornton 42 15.00 *Maxwell Page 43 15.00 *Kenneth Driscoll 44 15.00 *Edna Praine 45 15.00 James Wilson 46 15.00 Nancy C. Lane 100 15.00 *David Koehler 101 15.00 *Jerry Welker 102 15.00 *John Embleton 103 15.00 *Corrine Beach 104 20.00 *Clyde Wiley 105 15.00 *Candie Blasman 106 15.00 *Harry Wilson 107 20.00 *Stanley Dolka A 15.00 Tom Williams C 15.00 *Goffery Riser D 15.00 *William Page E 15.00 *Pat Pattillo F 15.00 *Roy Pike G 15.00 *Frieda Suomella H 15.00 *Charlotte Reid I 15.00 Michelle Holt J 15.00 *Herbert Davis K 15.00 *Lee Haley L 15.00 *Heide Alexander M 15.00 Joseph Morris N 15.00 *Mary Lo Wampler O 15.00 *Ernest Grizzard P 15.00 Juanita Holliman Q 15.00 *Kathalee Lombar R 15.00 *Ruth Pooley S 15.00 *Norma Baker U 15.00 *H. W. DeMoss V 15.00 *Arthur Pitman W 15.00 *Jesse Wagnor X 15.00 *James Hicks Y 15.00 W. Crowe Z 15.00 *Robert Wilder 00 20.00 Asterisks indicate those who were tenants on December 1, 1986. No lot rental agreements were in writing.
Recommendation It is, accordingly, RECOMMENDED: That petitioner reprimand respondents for raising rents before distributing prospectuses to their tenants. That petitioner require respondents to return the amounts by which rents collected for December of 1986 and January, February, March and April of 1987 exceeded rents charged the same tenants for November of 1986. DONE AND ENTERED this 1st day of December, 1989, in Tallahassee, Leon County, Florida. ROBERT T. BENTON, II 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 1st day of December, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5983 Petitioner's proposed findings of fact Nos. 1 through 4 recite procedural matters only. Petitioner's proposed findings of fact Nos. 5 through 11, 13, 15 through 19, and 21 through 25 have been adopted, in substance, insofar as immaterial. With respect to petitioner's proposed finding of fact No. 12, ad valorem taxes may also have contributed to the 1986 increase. Petitioner's proposed finding of fact No. 14 is rejected. With respect to petitioner's proposed finding of fact No. 20, Mrs. Ritchie distributed something she called rules and regulations. With respect to petitioner's proposed finding of fact No. 26, the charges themselves were included but not increases. Respondents' proposed findings of fact Nos. 1 through 4, 6, 7, 10 through 12, 14 through 17, 21, 22, 23, 25, and 26 have been estopped, in substance insofar as material. Respondents' proposed finding of fact No. 5 in immaterial. With respect to respondents' proposed findings of fact Nos. 8 and 9, the change in garbage collection charges, except for addition of a dumpster, occurred before respondents acquired the property; and the tax increase was $5,000.00 not $10,000.00. With respect to respondents' proposed finding of fact No. 13, respondents' selective (DBR advised them not to raise rents before distributing prospectuses) reliance on DBR for legal advice, whenever it may have ended, does not give rise to an estoppel. With respect to respondents' proposed findings of fact Nos. 18 and 19, utility rate charges are only one variable; usage was not proven. With respect to respondents' proposed finding of fact No. 20, Leroy Kierstaedt and Haze Studivant were apparently overnighters. With respect to respondents' proposed finding of fact No. 24, Ms. Stevens said she "imagined" this was so. Respondents' proposed finding of fact No. 27 was not established by the evidence. COPIES FURNISHED: Reynold Meyer Assistant General Counsel Department of Business Regulation Division of Florida Land Sales, Condominiums and Mobile Homes 725 South Bronough Street Tallahassee, Florida 32399-1070 Jeffrey C. Regan, Esquire 1300 Gulf Life Drive Jacksonville, Florida 32207 =================================================================
