The Issue Whether Respondent failed to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes. Respondent appeared at the hearing without legal counsel and was advised of his rights to same at his own expense. He elected to represent himself at the hearing. He was further advised as to his rights under the Administrative Procedure Act including the right to testify on his own behalf if he so desired. He indicated his understanding of his rights. It was stipulated by the parties that Joseph Sopotnick, Joseph Sopotnick, Jr., and Joe Sopotnick are one and the same person.
Findings Of Fact At all pertinent times under consideration in these proceedings, Respondent was a registered real estate broker (Stipulation of parties, Exhibit 2) In March 1974, Alvin K. Whittington of Marietta, Georgia, upon the recommendation of his job supervisor, who had dealt with Respondent in the past, called the Respondent on the telephone concerning the possibility of purchasing land in Florida. Although the Respondent indicated that he had none available at that time, he called Whittington later on in the day and told him that he had certain property which was for sale and inquired as to when he could come down to Florida to look it over. Whittington informed him that he did not know when he would be able to visit Florida and Respondent advised him to send a deposit in order to hold the land since there was a contractor interested in the same property. Whittington told him that he did not like the idea of placing a deposit on property that he had not seen and inquired as to whether or not he could secure a return of the deposit if, after he had seen the land he did not wish to purchase it. Respondent told him "That's no problem. You can get your deposit back". He advised him to send the deposit and that he would hold it until he came to Florida. Accordingly, Whittington sent a check for $360.00, dated March 20, 1974, to the Respondent which indicated on its face that it was a "deposit on Fla. shore lots - N.W. corner Needle Palm & 18th". The check was signed by Mrs. Whittington on a joint account with her husband. The sum of $360.00 represented 10 percent of a purchase price of $3600.00. After talking to Whittington, Respondent on March 20 wrote to the owners of the property, advised that a deposit check would be forthcoming and enclosed a standard sales contract for the sellers to execute and return to him. This was accomplished and Respondent then forwarded the contract to the Whittingtons for execution and return which they received on April 1st. Mr. Whittington thereupon called the Respondent and told him that he could not sign the contract without seeing the property. On April 12th, he and his wife went to Florida, met with the Respondent, looked over the lots in question, and informed the Respondent that he would call him the following Monday as to whether or not he wished to make the purchase. On April 15th, Whittington called the Respondent, informed him that he did not wish to purchase the property and requested return of his deposit. Respondent informed him he could not return it and that disposition of the deposit would be a matter to be determined by the seller. Thereafter, on April 19th, Respondent wrote to the Whittingtons informing them that after careful consideration, he intended to treat the matter as a forfeiture of deposit situation, and unless he heard from them to the contrary he would disburse the deposit to the seller under the terms of the contract. However, he stated in the letter that he would apply the full deposit to any purchase that the Whittingtons might thereafter wish to make. After receipt of this letter, Whittington again called the Respondent concerning the situation at which time Respondent informed him that he would try to get 1/3 of the deposit returned if Whittington would send him a letter indicating that he would accept such an amount. Nothing further was heard from the Respondent and the deposit was never refunded (Testimony of Mr. & Mrs. Whittington, Composite Exhibit 1, Exhibits 3, 4). On or about July 2, 1974, Respondent remitted 1/2 of the deposit to sellers and retained 1/2 for himself (Stipulation of parties) Respondent testified that Whittington had insisted he accept the deposit and send the contract to the seller to insure that he would be able to purchase the property, and that the proposed deal was not contingent upon the buyer's satisfaction with the property. He denied telling Whittington he could get his deposit back. He also testified that after the Whittingtons viewed the property in Florida, he asked Whittington about the contract and the latter said that he had not brought it with him but would send it within a few days. That when he thereafter called upon his return to Georgia, he informed Respondent that he did not wish to make the purchase because his wife was about to have a baby. Respondent contended at the hearing that he was never sure that Whittington wanted his deposit back, however, conceded that Composite Exhibit 1f was his letter to the sellers advising that the Whittingtons had requested the return of the deposit. Respondent asserted that it was his impression that if a deposit had been made in good faith, it was proper to consider that there was a binding contract even though the depositor had not signed a sales contract. He further indicated that if he was wrong in this respect he would return the deposit. At no time did the Respondent ever discuss the transaction with the sellers. He was unaware of the provisions of Section 475.25(1)(c), by which a registrant may seek advice from the real estate commission if he entertains, in good faith, doubt concerning his duty to account and deliver a deposit. Respondent has been in the real estate business for twelve years (Testimony of Respondent, Composite Exhibit 1f).
Recommendation That Respondent's registration as a real estate broker be suspended for a period of 60 days. That the period of suspension in excess of 30 days be vacated if the Respondent returns the $350.00 deposit to Mr. & Mrs. Alvin K. Whittington prior to the expiration of the aforesaid period of 30 days from the original date of suspension. DONE and ENTERED this 20th day of February, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue Whether petitioner should take disciplinary action against respondent for the reasons alleged in the administrative complaint?
Findings Of Fact At all pertinent times, respondent Richard L. Faircloth has held a real estate salesman's license, No. SL 0407933, issued by petitioner Department of Professional Regulation, Division of Real Estate, authorizing him to work, since July 16, 1990, as a salesman for Discount Realty-Fla., Inc., a corporate broker in Alachua, Florida, whose "qualifying broker" is respondent's wife, Lise H. Faircloth. Petitioner's Exhibit No. 1. On December 1, 1990, Alvin and Betty J. Wilson came to Mr. Faircloth's office in Alachua to sign a form deposit receipt and purchase and sale agreement, Petitioner's Exhibit No. 2, by which they offered to purchase a house on Northwest 18th Terrace in Gainesville; and they gave Mr. Faircloth five hundred dollars in cash, as earnest money. Mr. Faircloth did not recall at hearing whether he put the money in his pocket at that point, but the money was never deposited in an escrow or trust account. After Mr. and Mrs. Wilson left, Mr. Faircloth communicated their offer by telephone to a representative of the house's owner. The offer was declined. When he telephoned the Wilsons with the news, he asked them to come back to his office. With their return later that day, a conversation lasting about an hour and a half began, at the end of which the Wilsons authorized respondent and his broker to retain the earnest money deposit for use in the event respondent located another house they decided to make an offer to purchase. For the same purpose, Mrs. Wilson later wrote respondent a check in the amount of $1,500, which was duly deposited in the broker's escrow account. Shortly thereafter, respondent drew a check on the escrow account in Mr. Wilson's favor in the amount of $200 (so he could pay an electric bill), but the bank refused to cash it. Funds in the escrow account were insufficient, because the Wilsons' $1,500 check had bounced. Mr. Faircloth also wrote a check the Wilsons used as a deposit when they rented a truck to move into a duplex they rented from him. The deposit check was ultimately returned to respondent, without being cashed. (When the Wilsons moved, respondent regained possession of the dog he had earlier given the Wilsons' son. He was never reimbursed $78 he expended for the care and feeding of this dog, after it had become the Wilsons' property.) The Wilsons paid $450 a month, in advance, while they rented the duplex, and nobody ever asked for a security deposit. When Mrs. Wilson received a check from Beneficial National Bank (who lent money against an anticipated tax refund) in the amount of $1,466, Petitioner's Exhibit No. 5, she endorsed it in favor of respondent or the broker and, as far as the evidence showed, this money was put in escrow (although $200 might have been deducted beforehand.) In any event, respondent transferred $200 to the Wilsons more or less contemporaneously. Altogether, the Wilsons entrusted respondent with $1,776 ($500 + $1466 - $200 = $1,766) for possible use as earnest money. After Mr. and Mrs. Wilson bought a house respondent had shown them in December of 1990, but through another broker's office, without availing themselves of Mr. Faircloth's assistance in closing the transaction, they asked him to return the money they had given him. He gave them a check signed by his wife, drawn on a Discount Realty-Fla., Inc. account in the amount of $1,316, on which was written "return of deposit less 450 00/100 security." Petitioner's Exhibit No. 6. The check was dated April 17, 1991. At hearing, Mr. Faircloth testified that the $1,316 check to the Wilsons represented a $50 overpayment. He conceded that $450 had been improperly deducted from the moneys the Wilsons paid, as a claimed security deposit. But he contended that he and the Wilsons had agreed to a non- refundable, $500 "finder's fee" during their second visit on December 1, 1990. In fact, the Wilsons never agreed to any finder's fee, non-refundable or otherwise. At the time it was received, respondent and his wife gave two receipts for the Wilsons' $500. Each reflected that it was to be deposited as earnest money, and no subsequent writing indicated any different agreement between the parties. As late as April of 1991, respondent's conduct, notably delivery of the $1,316 check to the Wilsons, was inconsistent with the putative agreement about a finder's fee he testified to at hearing.
Recommendation It is, accordingly, RECOMMENDED: That petitioner suspend respondent's license for one year. DONE and ENTERED this 14 day of August, 1992, in Tallahassee, Florida. Copies furnished to: Janine Myrick, Esquire P.O. Box 1900 Orlando, FL 33802 Richard L. Faircloth Post Office Box 1859 Alachua, FL 32615 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14 day of August, 1992. Darlene F. Keller, Division Director Division of Real Estate 400 W. Robinson Street P.O. Box 1900 Orlando, FL 32802-1900
Findings Of Fact In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings. Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account. The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts. The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan. The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above. Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises. Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence. The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part: "2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement." "3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report. "14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided." "It is further agreed that in case of default by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs; or else the Seller may at his option retain one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller." Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller. Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the posthearing memorandum and the entire record compiled herein, I hereby make the following relevant findings of fact: Respondent, Alfred Rifflard, Jr., during times material herein, was a licensed real estate broker-salesman and is the holder of license number 0338064. Respondent, Thomas L. Narog, during times material herein, was a licensed real estate salesman and is the holder of license number 0309097. On approximately May 24, 1982, Respondent Narog represented to John F. Wodalski that Respondent Rifflard, as an investor, was interested in purchasing certain real property owned by Wodalski. Based on discussions with seller Wodalski, Wodalski and Respondent Alfred Rifflard entered into a deposit receipt and contract for sale and purchase of the Wodalski property. The purchaser is listed on the deposit receipt contract as Alfred Rifflard and/or assigns." (Petitioner's Exhibit 3) The negotiations for the sale of the subject property were conducted at the bar of a country club where both Respondent Naroq and seller Wodalski were employed. Respondent Rifflard was aware that the subject property had been on the market for approximately eighteen months. Seller Wodalski expressed (to Respondent Narog) disenchantment that he was unable to move the property as he had planned to purchase other properties with the proceeds received from the sale of the subject property. Respondent Narog attempted to sell the Wodalski property to enable him (Wodalski) to purchase the other property. During the negotiations for the sale of the subject property, Respondent Wodalski tendered a copy of his business card to seller Wodalski. That business card reflected that Respondent Rifflard was a licensed real estate salesman. Following the execution of the deposit receipt contract by Respondent Rifflard, Respondent Rifflard showed the property to approximately three prospective purchasers in an effort to sell the property prior to the purported closing date. Federal Land Title Corporation of Ft. Lauderdale, Florida was commissioned to handle the closing of the property from seller Wodalski to Respondent Rifflard and/or his assigns. This is confirmed by a letter dated August 19, 1982 to seller Wodalski wherein loan processor Kathy Bradley advised the seller that she expected to expedite the closing of the Wodalski property. (Petitioner's Exhibit 4) Upon receiving the above-referred letter from Federal Land Title Corporation, seller Wodalski demanded a tender of the $1,000 earnest money deposit which is referred to in the deposit receipt contract executed by Respondent Rifflard. At that time, Respondent Narog was told that no monies could be disbursed to him prior to closing. Seller Wodalski called off the closing based on his claim that another broker advised him that it was illegal for an undisclosed licensed real estate salesman to purchase property in his name. Based on the testimony of Respondents Rifflard and Narog including the testimony of the Petitioner's investigator, Anthony Nicola, who investigated the subject complaint, it is specifically found herein that the Respondents disclosed the fact that Rifflard was a licensed real estate salesman at the time the deposit receipt contract was executed herein. In making this finding, consideration was given to seller Wodalski's testimony to the effect that he was busy 2/ at the time that he entered the deposit receipt contract and that it was indeed possible that Respondent Rifflard tendered a business card to him at the time he entered the subject contract. Paragraph two of the deposit receipt contract reveals that the method of payment includes a $1,000 deposit, in the form of a note, which would be returned to the buyer at closing. It is undisputed by the Respondents that no earnest money deposit note in the amount of $1,000 was given the buyer's attorney to be held in trust until the closing was completed. The Respondents acknowledged that it was an error on their part to fail to execute the earnest money deposit as Respondent Rifflard agreed in the subject deposit receipt contract. Further, Respondent Rifflard urges that his failure to execute a note was an oversight on his part.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondents, Alfred Rifflard, Jr. and Thomas L. Narog, be privately reprimanded by the Petitioner, Division of Real Estate, based on their failure to place in deposit, to be held in trust, a $1,000 earnest money deposit in connection with the transaction surrounding the deposit receipt and contract for sale and purchase entered into by Alfred Rifflard, Jr., as purchaser of certain real property owned by John Wodalski. RECOMMENDED this 31st day of January, 1984, in Tallahassee, Florida. JAMES E. BRADWELL 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 31st day of January, 1984.
Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 1989, in Tallahassee, Florida. K. N. AYERS 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 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint in the manner specified therein and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, including the admissions made by Respondent at the outset of the final hearing, the following findings of fact are made: Respondent is now, and has been at all times material to the instant case, a Florida-licensed real estate sales associate, holding license number SL-3025826. At no time during the almost nine years Respondent has held this license has any disciplinary action been taken against her.3 Respondent now works, as she did at all times material to the instant case, as a real estate sales associate for Home Wiz USA, Inc., a Florida-licensed brokerage company located in Miami, Florida. On or about May 15, 2007, Hector Chaparro (Buyer) signed a contract (Subject Contract) to purchase from Edward J. and Paule F. Schupay (Sellers), as Trustees for the Schupay Revocable Trust dated July 6, 1982, property located at 16643 Saguaro Lane in Spring Hill, Florida (Property). The Sellers signed the Subject Contract on May 18, 2007, but there was never a closing because the appraised value of the Property was not high enough to enable the Buyer to obtain financing. Respondent represented the Buyer in the transaction, and she prepared the Subject Contract, using (at the Sellers' realtor's request) a printed "As Is" Contract for Sale and Purchase form approved by the Florida Association of Realtors and The Florida Bar (Form). Section II.(a) of the Form read as follows: "Deposit held in escrow by (Escrow Agent) in the amount of (checks subject to clearance) $ ." Respondent completed this section of the Form by writing "Secure Close Title" and "3,000.00," respectively, on the lines where the name of the "Escrow Agent" and the dollar amount of the deposit were to be entered. Unaware she was required to do so, Respondent did not, anywhere in the Subject Contract, indicate the address of Secure Close Title (Secure). The Subject Contract replaced a prior contract (Prior Contract) into which the Buyer had entered to purchase the Property from the Sellers. The Prior Contract had also provided for the Buyer to make a $3,000.00 deposit. As both Respondent and the Sellers' realtor were aware, at the time Respondent was preparing the Subject Contract to replace the Prior Contract, the $3,000.00 deposit the Buyer had made (by check) pursuant to the Prior Contract (First Deposit) was being held in escrow, as agreed to by the parties in the Prior Contract, by a Miami title company (Previous Escrow Agent) which had a relationship with the mortgage lender (Elite Home Loans) from whom the Buyer was seeking a loan to purchase the Property. The Sellers' realtor, when he asked Respondent to prepare the Subject Contract to replace the Prior Contract, not only told Respondent that the Sellers wanted the deposit required by the Subject Contract to be held by Secure (because of Secure's location in Spring Hill, near where the Property was located), he also informed Respondent that he had made arrangements, through Elite Home Loans, to have the First Deposit (that was being held by the Previous Escrow Agent) sent to Secure. Respondent believed that, in writing "Secure Close Title" on the "Escrow Agent" line in Section II.(a) of the Subject Contract, she was merely indicating that the $3,000.00 deposit required by the Subject Contract was to be held by Secure (as the Sellers, through their realtor, had requested). It was not at all her intent to mislead or deceive anyone, including the Sellers or their realtor, concerning the then whereabouts of that deposit (a matter about which the Sellers, through their realtor, knew as much as, if not more than, Respondent did). Although she was advised by Elite Home Loans that it had mailed to Secure the $3,000.00 deposit referred to in Section II.(a) of the Subject Contract (Subject Security Deposit), Respondent never obtained written verification of Secure's receipt of the deposit, an oversight attributable to her not knowing that she had a legal obligation to procure and retain such verification. After it became apparent that the transaction contemplated by the Subject Contract would not be consummated, the Subject Security Deposit was returned to the Buyer.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a Final Order (1) dismissing Count One of the Administrative Complaint; and (2) finding Respondent guilty of Count Two of the Administrative Complaint and disciplining her therefor by fining her $250.00 and placing her on probation for a period of 90 days, during which time she shall take and pass an appropriate real estate education course. DONE AND ENTERED this 18th day of May, 2011, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 18th day of May, 2011.
The Issue Whether Respondent, Nicholas Anthony Musashe (Respondent Musashe), is guilty of failure to account or deliver funds and failure to follow procedures as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether Respondent Musashe is guilty of failure to provide written notification to the Florida Real Estate Commission (FREC) within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether Respondent Musashe is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003). Whether Respondent, The Jander Group, Inc. (Jander Group), is guilty of failure to account or deliver funds and failure to follow procedures, as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether the Jander Group is guilty of failure to provide written notification to the FREC within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether the Jander Group is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003).
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to investigate administrative complaints pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003), and the rules promulgated thereunder. Respondent Musashe is, and has been at all times material, a licensed real estate broker, having been issued license no. 265400 and license no. 3010224. He is the owner of the Jander Group, which is also a licensed real estate broker, and its business address is located at 1440 Howell Branch Road, Winter Park, Florida 32789. At all times material hereto, Respondent Musashe was licensed and operating as the qualifying broker for the Jander Group. The Jander Group manages rental property exclusively and is not involved in the sale of real estate. Respondent Musashe has been managing rental properties in Florida since 1990. He, through his company, the Jander Group, manages about 500 properties. He enters into contracts with property owners to provide property management services. He meets with the property owners to advise them on improvements to accommodate rentals. He advertises vacant properties; interviews prospective residents; shows properties; takes applications; screens applicants; and, upon ascertaining that the applicant meets the minimum standards, enters into lease agreements with tenants. He also performs the day-to-day functions of collecting rent, accounting, paying bills, accounting to the owner, and paying the owner the rental proceeds. He keeps a percentage of the rent for his services. From time to time, in the property management business, a dispute develops between a tenant and a property owner. This can involve a deposit by a prospective tenant or a security deposit pursuant to a lease. In the early 1990's, the Legislature amended Chapter 83, Florida Statutes (2003), the "Florida Residential Landlord and Tenant Act" (Landlord-Tenant Act). Among other changes, it relieved licensed real estate brokers from the requirements of reporting escrow disputes and instituting settlement procedures as outlined in Subsection 475.25(1)(d), Florida Statutes (2003), when there were deposit disputes between residential landlords and tenants. Thereafter, and until late 2001, the FREC's position on rental property deposit disputes was that such disputes were addressed by the Landlord-Tenant Act and not subject to the provisions of Chapter 475, Florida Statutes (2003). This applied to disputes over security deposits, as well as disputes over deposits by prospective tenants. In late 2001, without notice to brokers and associates or rulemaking, the FREC changed its legal interpretation of Subsections 475.25(1)(d) and 83.49(3)(d), Florida Statutes (2003), with respect to disputes over pre-lease deposits on rental property. In this case and at least one other case, administrative complaints were filed against brokers who, faced with a dispute between a prospective tenant and a property owner, failed to give the FREC notice of the dispute and requested one of the settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). In the early to mid-1990s, in his business of managing rental properties, when confronted with disputes between prospective tenants and property owners, Respondent Musashe routinely sent notice to the FREC and requested an escrow disbursement order (EDO) to assist in determining how to settle the dispute in accordance with Subsection 475.25(1)(d), Florida Statutes (2003). The FREC responded that disputes involving rental properties were to be resolved in accordance with the Landlord-Tenant Act and did not issue an EDO. James Mitchell was the legal advisor to the FREC for several years while in the Attorney General's (AG) office in the 1990s; and since that time, is the author of continuing education materials which are approved by the FREC. In his materials, he instructs real estate brokers that disputes involving any type of rental deposits should be handled pursuant to the Landlord-Tenant Act, and not in accordance with the notice and settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). Mitchell is not familiar with the particular facts or documents at issue in this case. He did not give an opinion as to whether or not the facts of the present case created a landlord and tenant relationship between Respondents and Tiffnye Castro. During his tenure with the AG's office, Mitchell applied Chapter 83, Florida Statutes (2003), to escrow dispute issues in a manner consistent with the statutes' definition of "tenant" and "rental agreement." Section 83.49, Florida Statutes (2003), applies "whenever money is deposited or advanced by a tenant on a rental agreement or as advanced rent for other than the next immediate rental period." Chapter 83, Florida Statutes (2003), defines, "tenant" as "any person entitled to occupy a dwelling under a rental agreement." On May 10, 2002, Castro signed a rental application with the Jander Group to rent a duplex at 12034 Waldenwoods in Orlando. She gave the Jander Group a check for $25.00 as an application fee and $585.00 as a holding deposit. According to the terms of the application, the holding deposit was to be held by the broker while the application was being processed. If the prospective tenant was deemed qualified, she would receive a lease. During the time that the broker was checking on the tenant's qualifications, the property would be taken off of the rental market. If the tenant did not meet the qualifications for renting the property, the holding deposit would be returned to her. If the prospective tenant qualified, but changed her mind and decided not to rent the property, the property owner was entitled to keep the holding deposit as liquidated damages for holding the property off the rental market. Subsequent to filling out the application, Castro was approved as a tenant. In a dispute over the amount of rent to be charged for the unit, Castro decided not to rent the property and sent a demand letter to Respondent seeking the return of her deposit. On June 20, 2002, the Jander Group sent Castro a letter, in conformance with Subsection 83.49(3), Florida Statutes (2003), giving her notice of its intent to keep her deposit. Respondents accounted for the deposit to both parties in the transaction; and subsequently, delivered the deposit to the property owner. Castro never signed a lease or possessed keys, and she never had the right to occupy the property in question. Respondent predicated the handling of the escrow deposit on the assumption that he had a landlord and tenant relationship with Castro. Respondents never petitioned the FREC for a declaratory statement regarding a dispute over a deposit by a non-tenant on a lease application, rather than a rental agreement. Respondent Musashe elected not to follow Subsection 475.25(1)(d)1., Florida Statutes (2003), requirements for five reasons: his opinion that the issue was contractual; his own reading of the law; his experience with professional education; advice of private counsel; and the statements of law issued by the AG's office regarding EDOs. There is no evidence that Respondent Musashe was ever specifically advised by a state agency that the landlord and tenant procedure in Section 83.49, Florida Statutes (2003), was applicable to earnest money deposits made by a non-tenant as part of an application that did not create a lease obligation. Petitioners presented no evidence relative to paragraphs 15 through 22 and 25 through 32 of the Amended Administrative Complaint.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order dismissing the Amended Administrative Complaint filed against Respondents Nicholas Anthony Musashe and The Jander Group, Inc. DONE AND ENTERED this 11th day of August, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2004. COPIES FURNISHED: William M. Furlow, Esquire Akerman Senterfitt 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 Jason W. Holtz, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N-801, North Tower Orlando, Florida 32801-1757 Juana Watkins, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact The administratively complaint alleges that Respondent violated the provisions of Section 517,16(1)(a), F.S. by having sold notes, which were securities as defined by Section 517.02(1), F.S., which were unregistored in violation of Section 517.07, F.S., and having represented that said notes were secured by first mortgages when in fact they were not so secured in violation of Section 517.16(1)(d), F.S., on two occasions to Joseph M. and Patricia Barton. The first sale is alleged to have occurred on June 14, 1974, in the amount of $15,000, and the other sale is alleged to hake occurred on September 29, 1973 in the amount of $5,000. The Petitioner introduced Exhibit 1 which was received and which indicates that only the common stock of Equitable Development Corporation was registered with the State of Florida, Division of Securities. The Petitioner presented no evidence relative to the alleged sale occurring on June 14, 1974. It is therefore not proven. The Petitioner called Gregory Stevens who was the sole witness at the hearing and who was a license securities salesman and licensed mortgage broker. In September 1973 Stevens was self employed doing business for Gregory Stevens, Investment Incorporated. Stevens stated that he dealt in first mortgages. Respondent testified that he obtained the mortgage documents through Financial Resources Corp., the president of which was Mr. Rinehart. Respondent was assured by Mr. Rinehart before he began handling these mortgages that they were not required to be registered as securities because they ware exempt, and that the State had so indicated for this type of transaction. Respondent testified that he sold a note and mortgage to his clients, Joseph and Patricia Barton, in his capacity as a licensed mortgage broker on behalf of Gregory Stevens Investments, Inc., of which he is president. Exhibit 10 is a sample order form for another contract which shows that such transactions were in the corporate entity. Respondent's uncontroverted testimony was that only he individually is licensed to sell securities, and that no mortgages were sold as securities. The evidence is that on September 29, 1973, a promissory note of the Equitable Development Corporation was issued to Joseph and/or Patricia Barton, secured by a Mortgage Deed issued by Equitable Development Corporation. The face amount was $5,000. The Bartons also received a quitclaim deed. The mortgage deed specifically covenants that the underlying property is free and clear of all encumbrances except current and future real estate taxes. Respondent testified that he physically examined the property which secured the mortgages and it looked good. He saw appraisals at double the face amount of the mortgages he sold. Those clients who requested title insurance or opinions of title from a lawyer could obtain same, and when they were requested he saw then and they never showed any defects or other encumbrances. This was the procedure followed with the Bartons, although neither title insurance nor a title search and opinion were obtained requested by the Bartons. The Respondent indicated that at the time of said sale to the Bartons that he believed, and had no reason not to believe, that said mortgage was a first mortgage as it recites on its face. The Hearing Officer notes that Section 517.06(7), F.S., 1973, was amended effective October 1, 1973, and the Barton transaction took place on September 29, 1973. Therefore, the applicable provision is the unamended law found at Section 517.06(7), F.S.A. Regarding the law existing at the time and its interpretation, the Respondent also introduced Exhibit 2, 4, and 5 which letters indicate that the sale of notes secured by mortgages would be exempt from registration as exempt transactions pursuant to Section 517.06(7), F.S.A., and setting forth guidelines for exempt transactions. Without dealing with the question of estoppel, these exhibits state the agency's interpretations of the then existing law. The Hearing Officer finds the agency's interpretation as set out in Exhibits 2, 4, and 5 is an accurate interpretation of the statute. The Hearing Officer finds that a note is a security as defined in Section 517.02(1), F.S. Regarding the allegation that the note sold to the Bartons was an unregistered security, it is admitted that it was not registered, however, the Respondent asserts that the sale was a transaction exempted under the provisions of Section 517.06(7), F.S.A. Having examined the note and mortgage in question, the Hearing Officer finds that the note and entire mortgage securing it were sold in a single sale to one purchaser. The note and mortgage do not indicate any expressed recourse agreement or guarantee as to repayment of interest, principal, or both offered in connection with the sale. While the Respondent could not specifically recall the Barton transaction, he testified that purchasers were generally shown the property, an assessment of the property prepared by an appraiser indicating each lot's value, and it was represented that they would receive a first mortgage securing the note on lots worth two times the value of the note. There was no showing that the Respondent knew or should have known the mortgage to the Bartons was not a first mortgage and title to the property not clear. The transaction of September 29, 1973, was exempt under the law existing at that time. The Petitioner therefore has failed to show any violation of Section 517.16(1)(d), F.S.
Recommendation The agency having failed to show a violation of Section 517.16(1)(d), F.S., by the Respondent and the Hearing Officer having found that the September 29, 1973 transaction was exempt recommends that the charges be dismissed. DONE and ORDERED this 27th day of February, 1976. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Fred O. Drake, III, Esquire Counsel for Petitioner Charles W. Musgrove, Esquire Counsel for Respondent
