The Issue Whether Respondent's license as a real estate broker should be suspended or revoked, or the licensee otherwise disciplined for alleged violations of Chapter 475, F.S. as set forth in Administrative Complaint dated December 22, 1981. This proceeding arises from the filing of an administrative complaint by the Board of Real Estate against Jack Braunstein on December 22, 1981, which alleges that he failed to refund an advance rental fee to Annette Richard on May 13, 1980, thus violating a duty imposed upon him by law or by the terms of a listing contract in a real estate transaction in violation of subsection 475.25(1)(b), Florida Statutes. The complaint further alleges that Respondent thereby violated subsection 475.25 (1)(d), Florida Statutes, in failing to account to Ms. Richard, and violation of Section 475.453, Florida Statutes, for failing to provide repayment of any amount over 25 percent of the fee for rental information, if the prospective tenant does not obtain a rental. Respondent requested an administrative hearing, and the case was referred to this Division for assignment of a Hearing Officer on February 8, 1982. At the commencement of the hearing, the parties stipulated as to the truth of Paragraphs 2-3, 5-7, 9-11, and 19-20 of the Administrative Complaint. The parties further stipulated that Respondent was licensed by Petitioner at the time of the incident alleged in the Administrative Complaint. Respondent objected to the proceeding on various grounds, as reflected in the transcript of the hearing. The Hearing Officer treated the objection as a motion to dismiss and denied the same. Petitioner moved to amend Paragraph 22 of the Complaint to correct a typographical error to allege a violation of subsection 475.25(1)(d), F.S. in lieu of the inadvertent recitation of a violation of subsection 475.25(d), F.S. The motion was granted. The post-hearing submission by the Petitioner has been fully considered, and those portions not adopted herein are considered to be either unnecessary, irrelevant, or unwarranted in fact or law.
Findings Of Fact Respondent Jack Braunstein is licensed as a real estate broker and was so licensed at all times relevant to the matters alleged in the Administrative Complaint. Respondent operates Rent-Aid, Inc. located in Fort Lauderdale, Florida, a corporate real estate broker, He is the active broker for that firm. (Petitioner's Exhibits 1-2, Stipulation) On April 15, 1980, Annette H. Richard went to Respondent's firm to ascertain the availability of an apartment for rent in the school district where her child attended school. She had previously talked to Respondent by telephone concerning her needs, and Respondent had informed her that rentals were abundant and that she should come into the office. After she arrived, Respondent turned her over to his associate Jeannie Nemett who took down the information concerning Ms. Richard's apartment requirements. Ms. Nemett informed her that they could find her an apartment in the area, but had nothing available at that time. Although Ms. Nemett looked through the firm's book of apartment listings, she did not permit Ms. Richard to do so. Ms. Nemett told her that there was a new duplex listing not far from the desired area and Ms. Richard agreed to look at it. Ms. Nemett had explained the fact that the firm's services were available for a $50.00 "membership" fee. Since Ms. Richard did not have the money with her, she and Ms. Nemett stopped at the bank on the way to see the property and, after paying the requisite fee, Ms. Nemett gave her a copy of the "membership" agreement. She then showed the duplex and one other rental apartment to Ms. Richard. (Testimony of Richard, Nemett, Petitioner's Exhibit 3) A few days later, Ms. Nemett, having identified some existing available apartments in the school district area in her book of listings, called Ms. Richard several times but could not reach her. The messages were recorded on a telephone answering device. Ms. Richard did not return the calls immediately. About four days after having been shown the duplex by Ms. Nemett, she found an apartment which met her needs as a result of a newspaper ad. Prior to locating this apartment, Ms. Richard had also left telephone messages for Ms. Nemett which had not been returned. About a week or ten days after their initial meeting, Ms. Richard telephoned Ms. Nemett and informed her that she had secured her own apartment and did not wish Rent-Aid, Inc. to proceed any further in her behalf. (Testimony of Nemett, Richard, Petitioner's Exhibit 3) The agreement signed by Ms. Richard with Rent-Aid, Inc. included the following statement: If you do not obtain a rental you are entitled to receive a return of seventy-five percent of the fee paid, if you make demand within thirty days of this contract date. All notices shall be sent by certi- fied mail. A rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. (Emphasis added) By letter dated May 10, 1980, Ms. Richard requested a refund of her $50.00 fee from Rent-Aid, Inc., but by letter dated May 13, 1980, signed by Ms. Nemett, Ms. Richard was informed that a refund could not be made, as follows: It has been construed that the obtaining of rental property is when you receive listings--available, shown by us, in your price range and area, or any other listings which you agree to see. We did, in fact, show you available rental property under the terms of the Rent-Aid policy #011061. Also at that time, I left messages on your answering machine, concerning other avail- able rentals. Under the conditions and terms of this policy--a refund cannot be made. On advice of counsel, Respondent refunded the amount of $37.50 to Ms. Richard on January 11, 1982. (Testimony of Richard, Respondent, Petitioner's Exhibits 4-5) On March 27, 1980, Respondent's attorney wrote to Salvatore A. Carpino, Staff Attorney of the Department of Professional Regulation enclosing Rent-Aid, Inc.`s contract form and requesting review of it to determine whether or not it met the requirements of Chapter 475. The form sent to Mr. Carpino contained the same language as that used in the Richard transaction. By letter of April 1, 1980, the attorney informed Respondent that he had heard from the Department of Professional Regulation about the case and that the form would be acceptable if he deleted the word "registered" in "registered mail." Thereafter, on May 8, 1980, the attorney again wrote Mr. Carpino enclosing print sizes of the form to determine if it met the Department's print size requirements. By letter of May 15, 1980, Carpino informed the attorney that the Respondent could continue to use the existing forms "with the changes that we have previously discussed." Respondent utilized the contract form in question in reliance upon the advice given to him by his attorney in the above regards, and believed that he was operating properly in accordance with the Department's requirements. He had inserted the definition of "obtaining a rental" in the contract form in order to eliminate the vagueness of the statute pertaining to refunds. (Testimony of Braunstein, supplemented by Respondent's Exhibits 1-2)
Recommendation That the Florida Real Estate Commission (formerly Board of Real Estate) issue a private reprimand and impose a $100 administrative fine against Respondent, Jack Braunstein, pursuant to subsection 475.25(1)(d), Florida Statutes. DONE and ENTERED this 20th day of July, 1982. THOMAS C. OLDHAM 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 20th day of July, 1982. COPIES FURNISHED: Bruce Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Mr. C. B. Stafford Executive Director Florida Real Estate Commission P. O. Box 1900 Orlando, Florida 32801
The Issue The issue in this case is whether the Florida Real Estate Commission should discipline the Respondent, Mounir Albert El Beyrouty, on charges that he failed to deliver rental proceeds, was dishonest in his dealings regarding the rental property, failed to escrow rental deposits and proceeds, and failed to properly reconcile his escrow account.
Findings Of Fact The Respondent, Mounir Albert El Beyrouty, is licensed as a real estate broker in Florida, having been issued license no. BK 596936. He is the qualifying broker for Intermab, Inc., d/b/a Byblos Beach Realty. Acting through the real estate brokerage he qualified, Intermab, Inc., the Respondent orally agreed with Virginia Covington to manage apartment Unit 1-E, Redington Tower 3, located at 17940 Gulf Boulevard in Redington Shores, Florida. Initially, Covington, who is a federal district judge, was the personal representative and sole beneficiary of her mother's estate, which owned the unit; after probate, Judge Covington became the owner of the unit. The Respondent and Judge Covington agreed orally that the Respondent would try to lease the apartment on an annual basis at a lease rate of $850 per month, less a 15 percent commission to the Respondent. Although the Respondent was unable to secure such a lease, he intentionally misled Judge Covington to think there was such a lease and, in January 2008, began paying her $722.50 per month by check drawn on his brokerage operating account. He did this because he wanted her to think highly of his abilities as a real estate broker in the hopes that she would retain him to list the property when she decided to sell. Not long after he began sending monthly checks, the Respondent told Judge Covington that a leak in the kitchen sink should be repaired and a stained mattress should be replaced. He got her permission, took care of both items, and was reimbursed. However, he perceived that Judge Covington did not want to put additional money into the apartment unnecessarily and decided to avoid these kinds of conversations and dealings with her. Instead, he began to expend his own funds to maintain and upgrade the property as he saw fit without telling her. The Respondent secured a paying tenant for the apartment for six weeks during February and March 2008. He collected a $500 security deposit and $5,250 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. In April 2008, the Respondent allowed friends to stay in Judge Covington's apartment free of charge and without paying a security deposit. He did not tell Judge Covington, rationalizing that he was paying her the $722.50 per month she thought was her share of the annual lease payments. The Respondent secured a paying tenant for the apartment for January, February, and March 2009. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. The Respondent secured a paying tenant for the apartment for January, February and March 2010. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. In July 2010, the Respondent was able to lease the apartment for a year at a monthly rent of $1,300. He also collected a $1,000 security deposit. He deposited this money in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. In November 2010, Judge Covington told the Respondent to tell the tenant she wanted to increase the annual lease rate to $935 a month. The Respondent continued to lead her to believe there was an annual lease for $850 a month and told her that he would advise the supposed tenant of the rent increase. Instead, he kept collecting $1,300 a month from the tenant and began paying Judge Covington $794.75 a month (the $935, less a 15 percent commission). He did not tell her there actually was an annual lease for $1,300 a month. The $1,300 annual lease was not renewed in July 2011. The Respondent continued to pay Judge Covington $794.75 a month and to lead her to believe there was an annual lease for $935 a month. In about June 2011, Judge Covington decided to sell her apartment. As the Respondent hoped and planned, she listed it with his brokerage. Judge Covington asked the Respondent to notify the supposed annual tenant, who she believed had been living in the apartment since December 2007, to make sure the tenant would be agreeable to a month-to-month lease during their efforts to sell. The Respondent continued to lead Judge Covington to believe there was such an annual tenant and assured her that he would be able to convince the tenant to cooperate with her plan to sell. From August 29 through October 5, 2011, the Respondent allowed friends to stay in Judge Covington's apartment free of charge and without paying a security deposit. He did not tell Judge Covington, rationalizing that he was paying her the $794.75 per month she thought was her share of the annual lease payments. In November and December 2011, the Respondent rented Judge Covington's apartment to the sister of the court clerk for $850 a month without requiring a security deposit. He did not tell Judge Covington about this rental. The Respondent secured paying tenants for the apartment for February, March and April 2012. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $794.75 a month and led her to believe there was an annual lease for $935 a month. Despite several price reductions, the Respondent was unable to sell the apartment, and Judge Covington decided to switch selling brokers. In February 2012, she signed a listing agreement with another real estate broker. Later in February 2012, a real estate salesperson showed Judge Covington's apartment to a prospective purchaser. Upon questioning, an older woman told the salesperson that they were paying $3,000 a month in rent. The Respondent told the salesperson to disregard the information because the woman was not thinking straight, or words to that effect, because her husband had been ill. He also told her that the woman's son was actually paying the rent. The salesperson related this information to Judge Covington and also told her that she noticed that the residents were not the same people she happened to see in the apartment on one occasion in February 2012. Upon receiving this information, Judge Covington became suspicious that the Respondent had been dishonest and misleading her. She contacted the State Attorney's Office and the Division regarding the process for filing a complaint against the Respondent. She also arranged for a meeting with the Respondent. When she met with the Respondent, she brought a forensic accountant to review the Respondent's records. The Respondent told them he was sorry that Judge Covington was upset with him, but that he did not owe her any money--to the contrary, that she owed him money. However, he told them he was being audited by the Division and was unable to provide supporting documentation. At the final hearing, the Respondent provided a ledger to support his position that all the rent he collected belonged to him alone because Judge Covington owed him money throughout his dealings with her due to his payments to her, regardless whether her apartment was rented, and the money he spent to maintain and improve the apartment. (This was an after-the-fact justification for his failure to deposit any security deposits or rental payments into his escrow account when, in fact, he did not do so because he did not know it was required.) There is reason to believe that the ledger is not entirely accurate. For example, the Respondent omitted rent collected from at least one occupant of the apartment. It also does not account for the times the Respondent allowed friends and relatives to stay there free of charge, essentially acting as if he owned the apartment. Although the Respondent's testimony regarding the money he paid to maintain and improve the apartment is accepted, his failure to timely apprise Judge Covington regarding those expenditures makes it difficult to be certain about it. Finally, even accepting the ledger at face value, it shows that there were times when the Respondent owed Judge Covington, and not vice-versa. The Division attempted to make a case that the Respondent intended to and attempted to steal rental proceeds. It is unlikely that the Respondent actually targeted a federal judge to victimize in that way. It is more likely that the Respondent was attempting to impress Judge Covington with his skill and expertise as a real estate broker and, ultimately, to be rewarded with the listing on the property when it was sold. In so doing, the Respondent flagrantly violated several laws and rules regarding his professional responsibilities as a licensed Florida real estate broker. Respondent has been a licensed real estate broker for many years and depends on his license to make a living to support himself and his family. He has no prior disciplinary record. However, it has become known in this case that, over the years, he consistently has failed to use his escrow account for rental deposits and proceeds because he did not know it was required.
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 the Respondent guilty as charged; fining him $2,000; suspending his license for one year; and placing him on probation for a suitable period of time and upon suitable conditions. DONE AND ENTERED this 5th day of August, 2013, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 2013.
Findings Of Fact At all times material, Respondent, Gary Dean Upton, was a licensed real estate broker having been issued license number 0090905. Respondent was the broker for the other Respondent herein, Dean Upton Realty, Inc., which has its offices situated at 7045 W. Broward Blvd., Ft. Lauderdale, Florida. At times material herein, Respondent, Dean Upton Realty, Inc., was a corporation licensed as a real estate broker having been issued license number 0213092. On March 11, 1983, a hearing was held before an arbitration panel of the Ft. Lauderdale Area Board of Realtors in response to a complaint filed by Respondent herein, Upton, claiming a commission from another realtor based upon an exclusive rental agreement for property owned by Rex and Martha Anderson. (Tr pages 23, 28) Subsequently, the Ft. Lauderdale Area Board of Realtors filed a complaint with the Department of Professional Regulation alleging possible perjury in connection with Upton's testimony at the hearing or forgery in connection with the exclusive listing agreement with the Andersons. Unrefuted testimony shows that during a meeting at Anderson's home in October, 1982, Rex Anderson initialed a listing brochure for the Anderson property. (Tr page 111-112; Respondents' Exhibit 3; Anderson deposition at page 9; referring to the March 22, 1983 letter at Petitioner's Exhibit 3, page 60, paragraph 3) Anderson claimed he did not intend to give Upton an exclusive listing. However, because of the strain he was under at the time the agreement was purportly executed, he could not swear that he did not initial the document. Anderson's testimony about being under a "severe strain" and unable to remember what occurred in connection with the exclusive listing agreement is not inconsistent with that of the only other eye witness who has testified regarding the transaction, Kevin Scott, a former associate of Upton who is presently involved in hotel management at the Royal Orleans Hotel in New Orleans, Louisiana. (Tr page 108) The day Upton visited the Anderson residence to obtain the listing, Rex Anderson, who had been laid off from his job as an airline pilot, appeared "very upset," and appeared to be drinking. (Tr page 110) Thereafter, Upton and Scott left the Anderson residence for a brief period. When they returned, Anderson was a "very flustered, very nervous and an agitated individual." (Tr page 114) The credible testimony of persons familiar with Upton's reputation for honesty in the community evidenced that he was not reputed to be a person who would forge someone's name on a listing agreement. (Testimony of Clemente, Apuna and Marion Upton at Tr pages 126, 143 and 145, respectively) Based on Respondent's testimony that Anderson initialed the exclusive listing agreement, Kevin Scott's testimony which was corroborative of Respondent Upton's testimony and Anderson's inability to state, without evasiveness, what occurred in connection with the exclusive listing agreement respecting the subject property, there is no competent and substantial evidence herein to establish that Respondent Upton either forged Rex Anderson's initials to the exclusive listing agreement or that he gave perjured testimony before the Fort Lauderdale Area Board of Realtors. On October 17, 1984, Respondent Upton pleaded nolo contendere to the felony offense of possession of an unlawfully issued driver's license. (Petitioner's Exhibit 5) The plea resulted in a withheld adjudication and a sentence of 18 months probation plus the payment of fines and court costs. In making the nolo contendere plea, Respondent Upton considered that such was in his best-interests; however, he felt that he was not guilty and has been a model probationer since October, 1984. (Testimony of Susan Jean Davis, Respondent Upton's correctional officer) Respondent has completed a 30-day residential treatment program for alcoholism at the Beachcomber in Delray Beach, Florida. Since that time, he has also participated successfully in the Broward County Commission of Alcoholism, Inc. DWI program. (Respondents' Exhibits 4, 5 and 8) Those persons who have had the opportunity to observe Respondent since his bout with alcoholism consider him a reformed alcoholic. (Testimony of former judge, Lawrence C. Roberts; Marion Upton and former Broward sheriff and judge, George Brescher) Kendall D. DeVeaux, Broward County's chief evaluator for the substance abuse program had the opportunity to evaluate and supervise Respondent Upton since his DWI and drug abuse offenses. DeVeaux's testimony corroborates that of Roberts and Marion Upton respecting Upton's reformation. Based on the foregoing factual findings and conclusions, and the mitigating factors introduced herein, I hereby make the following:
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent Gary Dean Upton's real estate broker's license number 0090905 be suspended for a period of six (6) months. In all other respects, it is RECOMMENDED that the complaints in Case Numbers 84-0138 be DISMISSED. RECOMMENDED this 8th day of October, 1985, 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 8th day of October, 1985.
Findings Of Fact The Respondent, M. Betty Murray, currently holds Florida Real Estate Broker's License number 62943. At all times material to this proceeding, the license was in full force and effect. The Respondent represented L. O. Huckaby and Sarah Huckaby in the sale of property located at 363 Boylston Avenue, Daytona Beach, Florida, to Elizabeth T. Stein, the complainant in this proceeding. Pursuant to her representation of the Huckaby's, the Respondent, on or about June 18, 1979, prepared a proposed contract for the sale and purchase of the subject property. Prior to signing the contract and tendering a deposit thereunder, Ms. Stein reviewed the contract with her attorney, Berrien Becks, Sr. When reviewing the contract with Mr. Becks, Ms. Stein failed to inform either Mr. Becks or his secretary, Sylvia Van De Mark, that she intended to use the property as either a duplex or a triplex. Had Ms. Stein indicated such an intent, a provision to that effect would have been included in paragraph VIII of the contract for sale and purchase. This was the normal procedure utilized in the ordinary course of business by the Becks' law firm. The contract for sale, Respondents Exhibit 1, shows no such provision or notation. The sellers, Mr. and Mrs. Huckaby, were represented by Charles E. Booth, Esquire. On behalf of Ms. Stein, Mr. Becks requested that certain repairs be made to the property. Mr. Booth rejected these demands by letter dated July 24, 1979. Although the contract does not state that the property was intended to be used as a duplex, the property is in fact recognized as a de facto duplex under the nonconforming use provisions of the city's zoning ordinance. Had Ms. Stein elected to proceed with the sale, she would have been permitted to utilize the property as a two unit property so long as she lived in one of the units which was her expressed intent. Prior to paying the balance of the deposit due on the contract, Ms. Stein and the Respondent went to Mr. Booth's office where Mr. Booth confirmed by telephone conversation with city officials and in the presence of both Ms. Stein and the Respondent, the lawful use of the property as a single family residence with attached rental unit. Following this information, Ms. Stein paid the balance into the Respondent's escrow account. On August 20, 1979, Ms. Stein demanded return of the $9,000.00 deposit from the Respondent. Upon receipt of this demand, the Respondent contacted Mr. Booth who instructed her to retain the deposit in her escrow account. Mr. Booth and Mr. Becks negotiated a release which was signed by the Sellers on August 28, 1979 and by Ms. Stein on September 11, 1979. The release authorized disbursements to be made including $500.00 to the Respondent, $150.00 to Mr. Booth, $43.00 to Lawyers Title Services, Inc. and the remaining $8,307.00 to Ms. Stein. On August 20, 1979, prior to signing the release, Ms. Stein sent a complaint to the Board concerning the return of her $9,000.00. On September 7, 1979, Ms. Stein sent another letter to the Board indicating that she had not agreed to the disbursements set forth in paragraph 8 above notwithstanding her agreement to sign the release. Ms. Stein's attorney, Mr. Becks, witnessed the release and explained the legal implications of the release in detail to her prior to her signing. Mr. Stein did not inform Mr. Becks of her correspondence with the Board which attempted to disclaim the release. At no time did the Respondent represent the property as a triplex, but only as a single family residence with a single attached rental unit, which was a permissible use under the city zoning ordinance. In fact, Ms. Stein defaulted on the contract and under its express terms could have forfeited the entire $9,000.00. The release negotiated between Mr. Becks and Mr. Booth which returned $8,307.00 to Ms. Stein was generous and demonstrated good faith efforts on the part of the Sellers to settle this matter amicably. The Respondent has maintained her registered office at 231 Gradview, Daytona Beach, Florida. The office consists of a room where she maintains her business files and which can be closed for privacy. The allegations of Ms. Stein against the Respondent were untrue and were made with knowledge that neither the Huckaby's nor the Respondent had engaged in any illegal or unethical activities regarding this transactions. The testimony of Mr. Becks, attorney for Ms. Stein and the affidavit of Mr. Booth, attorney for the Huckaby's, corroborates the Respondent's testimony and contradicts the allegations made in the complaint filed by Ms. Stein and the administrative complaint filed by the Board which was based entirely upon Ms. Stein's allegations. Ms. Stein's failure to appear at the final hearing supports the conclusion that she knew the allegations made by her could not be proved at the hearing. Any equitable or legal rights which Ms. Stein may have had to pursue this matter ended when she knowingly and voluntarily signed a release in order to secure the return of a substantial portion of her deposit monies. In effect, the only misrepresentation in this case was that made by Ms. Stein when she represented that the release would extinguish all responsibilities, obligations and rights arising from the contract in return for the $8,307.00 and then effectively requested the Board to proceed against the Respondent.
The Issue The issue in this case is whether Monroe County Ordinance 004-1997, approved by a Final Order of the Department of Community Affairs, DCA Docket No. DCA97-280-FOI-GM, is consistent with the Principles for Guiding Development set forth in Section 380.0552, Florida Statutes (1997)?
Findings Of Fact The Parties. Petitioners are all involved in the rental of real property in unincorporated Monroe County, Florida. Petitioner John H. Rathkamp is a resident of the State of Georgia. (Admitted fact). Mr. Rathkamp is the owner of real property located in unincorporated Monroe County described as Lost 6, Block 9, Redfish Lane, Cudjoe Ocean Shores Subdivision, Cudjoe Key (RE #188684000800). At the time of purchase, the property was improved. At all times material to this proceeding, Mr. Rathkamp's property was located in an Improved Subdivision land use district. (Admitted facts). Petitioner Monroe County Vacation Rental Managers, Inc., is a Florida not-for-profit corporation doing business in Monroe County. Its principal place of business is located at 701 Caroline Street, Key West, Florida. (Admitted facts). Petitioner Lower Keys Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is Post Office Box 4330511, Mile Maker 31, Big Pine Key, Florida. (Admitted facts). Petitioner Marathon Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is 12222 Overseas Highway, Marathon, Florida. (Admitted facts). Respondent, the Department of Community Affairs (hereinafter referred to as the "Department"), is an agency of the State of Florida. The Department is charged with responsibility for, among other things, the approval or rejection of comprehensive plan amendments and land development regulations adopted by the Monroe County Board of County Commissioners. Chapter 163, Florida Statutes, and Sections 380.05 and 380.0552, Florida Statutes (1997). Intervenor, the Board of County Commissioners of Monroe County (hereinafter referred to as the "County"), is the governing body of Monroe County, Florida, a political subdivision of the State of Florida. Among other things, the County is responsible for adopting a comprehensive plan and land development regulations for unincorporated Monroe County. Unincorporated Monroe County has been designated as the Florida Keys Area of Critical State Concern (hereinafter referred to as the "Florida Keys ACSC"), pursuant to Sections 380.05 and 380.0552, Florida Statutes, since 1979. As an area of critical state concern, all comprehensive plan amendments and land development regulations adopted by the County must be reviewed by the Department for consistency with the Principles for Guiding Development (hereinafter referred to as the "Principles"), set out in Section 380.0552(7), Florida Statutes. Standing. The parties stipulated that Petitioners are all substantially affected persons as those terms are used in Section 120.569, Florida Statutes (1997). The evidence in this case proved that Petitioners' substantial interests have been determined by the Department's Final Order approving the land development regulation at issue in this case. Petitioners have standing to initiate, and participate in, this proceeding. The evidence also proved that the County's substantial interests were determined by the Department's Final Order. The County has standing to participate in this proceeding. The County's Adoption of Ordinance No. 004-1997. During 1995 the County directed that public hearings be held on the issue of the rental of real estate for short periods of time for vacation purposes in Monroe County. Public hearings were held before the County's Development Review Committee in Marathon, Monroe County, Florida, on July 25, 1995, and December 2, 1995. Public hearings were also held before the County's Planning Commission on the following dates and at the following locations in Monroe County: Date Location March 7, 1996 Marathon March 21, 1996 Key West April 3, 1996 Key Largo April 18, 1996 Marathon April 22, 1996 Duck Key July 15, 1996 Duck Key September 5, 1996 Marathon On November 5, 1996, a referendum was placed on the ballot in Monroe County. The referendum asked the following question: "Should transient rentals of less than 28 days be allowed in (IS) Improved Subdivisions?" This question was answered "yes" by 51% of the citizens who voted on the referendum. Public hearings to consider an ordinance prohibiting certain vacation rentals were held before the County on December 18, 1996 in Marathon and on February 8, 1997, in Key West. On February 3, 1997, the County passed and adopted Ordinance No. 004-1997 (hereinafter referred to as the "Ordinance"). The Ordinance applies to lands located in unincorporated Monroe County. (Admitted facts). The Department's Review of the Ordinance. On February 25, 1997, the County transmitted a copy of the Ordinance to the Department for approval or rejection pursuant to Section 380.05, Florida Statutes. (Admitted fact). On April 25, 1997, the Department caused notice of Proposed Rule 9J-14.006(11), approving the Ordinance, to be published in the Florida Administrative Weekly. (Admitted fact). A challenge pursuant to Section 120.56, Florida Statutes, to the proposed rule was filed by Petitioners on May 16, 1997. The Department held public hearings in Monroe County on the proposed rule on May 21 and 22, 1997, and June 26, 1997. On May 31, 1997, an amendment to Section 380.05(6), Florida Statutes, became effective. The amendment changed the procedure for approving or rejecting comprehensive plan amendments and land development regulations in areas of critical state concern. Pursuant to the new procedure the Department was required to approve or reject comprehensive plan amendments and land development regulations in areas of critical state concern by final order instead of by rule. (Admitted facts). Petitioners in the rule challenge proceeding stipulated that they would not object, procedurally, if the Department elected to withdraw the proposed rule and issue a final order approving or rejecting the Ordinance. (Admitted fact). On November 26, 1997, the Department caused a Final Order entered November 5, 1997, to be published in the Florida Administrative Weekly, Vol. 23, No. 48. The Final Order was accepted into evidence as Joint Exhibit 5. The Final Order contains Findings of Fact and Conclusions of Law. Those Findings of Fact and Conclusions of Law are hereby incorporated by reference into this Recommended Order. A copy of the Final Order is attached to this Recommended Order. Pursuant to the Department's Final Order, the Department approved the Ordinance as being consistent with the Principles. (Admitted facts). Studies and Reports. One thing that was made abundantly clear during the formal hearing was that no formal studies were conducted by the County during its consideration and adoption of the Ordinance. Instead, the County relied upon information provided to it during the hearings conducted prior to, and during, the adoption of the Ordinance and the County's knowledge about Monroe County. Another fact made abundantly clear was that the Department also did not undertake any formal studies during its review of the Ordinance. The Department relied upon the its knowledge of Monroe County and information that had been provided to the County, summarized in memorandums. The Principles. Section 380.0552(7), Florida Statutes, creates the Principles: To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation. To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat. To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat. To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development. To limit the adverse impacts of development on the quality of water throughout the Florida Keys. To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys. To protect the historical heritage of the Florida Keys. To protect the value, efficiency, cost- effectiveness, and amortized life of existing and proposed major public investments, including: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and Florida Keys Electric Co-op; and Other utilities, as appropriate. To limit adverse impacts of public investments on the environmental resources of the Florida Keys. To make available adequate affordable housing for all sectors of the population of the Florida Keys. To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or man-made disaster and for a post-disaster reconstruction plan. To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource. In determining whether the Ordinance is consistent with the Principles, the Principles must be considered as a whole and no specific provision is to be construed or applied in isolation from the other provisions. Section 380.0552(7), Florida Statutes. The Principles must also be construed and applied with due consideration to the legislative intent. The legislative intent in promulgating Section 380.0552, Florida Statutes, is set out in Section 380.0552(2), Florida Statutes: LEGISLATIVE INTENT.—It is hereby declared that the intent of the Legislature is: To establish a land use management system that protects the natural environment of the Florida Keys. To establish a land use management system that conserves and promotes the community character of the Florida Keys. To establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. To provide for affordable housing in close proximity to places of employment in the Florida Keys. To establish a land use management system that promotes and supports a diverse and sound economic base. To protect the constitutional rights of property owners to own, use, and dispose of their real property. To promote coordination and efficiency among governmental agencies with permitting jurisdiction over land use activities in the Florida Keys. In order for the Ordinance to be consistent with the legislative intent of Section 380.0552(2), Florida Statutes, it must be consistent with the Principles. The Ordinance. The Monroe County 2010 Comprehensive Plan (hereinafter referred to as the "Plan"), establishes the land uses which are allowed and prohibited in Monroe County. The Ordinance provides the following "Purpose": The purpose of this ordinance is to further and expressly clarify the existing prohibition on short-term transient rental of dwelling units for less than twenty-eight (28) days in duration in Improved Subdivisions, mobile home districts (which provide affordable housing) and native areas, and to allow tourist housing uses in all other districts and in improved subdivision districts with a newly-created tourist housing subindicator. The Ordinance defines the terms "vacation rentals" as the rental for tenancies of a dwelling unit for less than twenty- eight days. Hotels, motels, and recreational vehicle spaces are specifically excluded from the definition of "vacation rentals." The Ordinance addresses the following land use districts and prohibits vacation rentals within those district: Sparsely Settled Residential District; Native Area District; Mainland Native Area District; and Commercial Fishing Residential District. The Ordinance addresses the following land use districts and provides that vacation rentals are allowable "if a special vacation rental permit is obtained under the regulations established in Code s9.5-534": Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Urban Residential District; Sub Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Sub Urban Residential District; Sub Urban Residential District (Limited); Destination Resort District; Maritime Industries District. Vacation rentals are not allowed, however, in commercial apartments with more than six units; and Mixed Use Districts. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use. The Ordinance addresses the following land use districts and provides that vacation rentals are prohibited except "in gated communities which have (a) controlled access and (b) a homeowner's or property owners' association that expressly regulates or manages vacation rental uses": Urban Residential-Mobile Home District; URM-L District; and Improved Subdivision Districts. Improved Subdivision Districts (hereinafter referred to as "IS Districts"), are the primary, residential districts in Monroe County. 40 The Ordinance establishes a new district, the Improved Subdivision-Tourist Housing District (hereinafter referred to as the "IS-T District"). Vacation rentals are allowed in IS-T Districts under certain conditions: A map amendment designating a contiguous parcel as IS-T may be approved, provided that the map amendment application (and subsequent building permit applications and special vacation rental permit applications) meet the following standards, criteria and conditions: The IS-T designation is consistent with the 2010 Comprehensive Plan and there is no legitimate public purpose for maintaining the existing designation. The IS-T designation allowing vacation rental use does not create additional trips or other adverse traffic impacts within the remainder of the subdivision or within any adjacent IS district: The parcel to be designated IS-T must contain sufficient area to prevent spot zoning of individual parcels (i.e., rezonings should not result in spot-zoned IS-T districts or result in spot-zoned IS districts that are surrounded by IS-T districts). Unless the parcel to be rezoned contains the entire subdivision, there will be a rebuttable presumption that spot-zoning exists, but the Board of County Commissioners may rebut this presumption by making specific findings supported by competent, substantial evidence that: the designation preserves, promotes and maintains the integrity of surrounding residential districts and overall zoning scheme or comprehensive plan for the future use of surrounding lands; does not result in a small area of IS-T within a district that prohibits vacation rentals; the lots or parcels to be designated IS-T are all physically contiguous and adjacent to one another and do not result in a narrow strip or isolate pockets or spots of land that are not designated IS-T, or which prohibit vacation rentals; and the IS-T designation is not placed in a vacuum or a spot on a lot-by-lot basis without regard to neighboring properties, but is a part of an overall area that allows vacation rentals or similar compatible uses. In addition to the requirements contained in Code s.9.5-377 (District Boundaries), an IS-T district shall be separated from any established residential district that does not allow tourist housing or vacation rental uses by no less than a class C bufferyard: Vacation rental use is compatible with established land uses in the immediate vicinity of the parcel to be designated IS- T: and Unless a map amendment is staff-generated (i.e., initiated by Monroe County), an application for a map amendment to IS-T shall be authorized by the property owner(s) of all lots (or parcels) included within the area of the proposed map amendment. The Ordinance provides that vacation rentals are prohibited in Offshore Island Districts unless they "were established (and held valid state public lodging establishment licenses) prior to January 1, 1969." Finally, the Ordinance provides, in part, that the following uses are permitted in Recreational Vehicle Districts: Recreational vehicle spaces. RV spaces are intended for use by traveling recreational vehicles. RV spaces may be leased, rented or occupied by a specific, individual recreational vehicle, for a term of less than twenty-eight days, but placement of a specific, individual Recreational Vehicle (regardless of vehicle type or size) within a particular RV park for occupancies or tenancies of 6 months or more is prohibited. Recreational Vehicles may be stored, but not occupied, for periods of 6 months or greater only in an approved RV storage area (Designated on a site plan approved by the Director of Planning) or in another appropriate district that allows storage of recreational vehicles. . . . Code s9-534 of the Ordinance requires a permit for vacation rentals, except for vacation rentals located within a controlled access, gated-community or within a multifamily building which has 24-hour on-site management or 24-hour on-site supervision. This Code section also provides certain conditions which must be met by vacation rentals, requires that a copy of any permit be provided to surrounding property owners, provides for the circumstances under which a permit may be revoked, provides for certain penalties, and deals with other miscellaneous matters. Code s9-534 is hereby incorporated into this Recommended Order. The Ordinance is a "land development regulation" as defined in Section 380.031(8), Florida Statutes. (Admitted fact). Petitioners' Challenge to the Ordinance. On December 16, 1997, Petitioners timely filed a challenge pursuant to Sections 120.569 and 120.57, Florida Statutes, to the Department's Final Order approving the Ordinance. (Admitted facts). In addition to alleging that the Ordinance is not consistent with the Principles, Petitioners also challenged some of the specific findings of fact contained in the Final Order entered by the Department. While the Department has agreed that it has the burden of proving the "validity of the final order," for purposes of Sections 380.05 and 380.0552, Florida Statutes, the only "final order" which the Department entered in this matter is the final line of the order: "WHEREFORE, IT IS ORDERED that Monroe County Ordinance No. 004-1997 is consistent with Section 380.0552(7), F.S., and is hereby approved." Because this is a de novo proceeding, the "facts" and "conclusions of law" the Department reached in taking the "proposed agency action" at issue in this case, are not controlling. Petitioners also alleged that the Ordinance is not "consistent with the legislative intent for designation of unincorporated Monroe County as the Florida Keys ACSC expressed in Section 380.0552(2), F.S." Chapter 380, Florida Statutes, does not specifically require the Department to independently determine whether a land development regulation is consistent with the legislative intent. The Department is only required to determine consistency with the Principles. If a land development regulation is consistent with the Principles, it will also be consistent with the legislative intent. Finally, Petitioners alleged in their Petition that the Ordinance is not consistent with the Plan. This allegation was not included in the Prehearing Stipulation. This issue was, therefore, waived by Petitioners. Even if not considered waived, the issue of whether the Ordinance is consistent with the Plan is not an issue which has been properly brought before this forum. The challenge in this case was instituted pursuant to Chapter 380, Florida Statutes. Nowhere in Chapter 380, Florida Statutes, is the Department required or authorized to review a land development regulation for consistency with a growth management plan. The Department's authority to review a land development regulation for consistency with a growth management plan comes from Chapter 163, Florida Statutes. Challenges to Department's decisions under Chapter 163, Florida Statutes, must be instituted pursuant to Section 163.3213, Florida Statutes. No such proceeding has been instituted by Petitioners. Petitioners, although not specifically alleged in their petition or the Prehearing Stipulation, presented evidence at hearing and argument in their proposed order concerning what the County and Department knew or did not know, and what they did or did not do, at the time of their respective actions. Because this is a de novo proceeding, such knowledge or actions, do not support a finding that the Ordinance is not consistent with the Principles unless, in the case of required information, the information is not provided at hearing and, in the case of an action that was not taken, the action was required by rule or statute. The evidence presented at hearing in this case was sufficient to determine consistency of the Ordinance with the Principles. The evidence also failed to prove that the County or the Department failed to take any action required by rule or statute with regard to their respective roles in this matter. Sound Economic Development of Monroe County. Section 380.0552(7)(d), Florida Statutes, includes the following principle: "To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development." This principle is consistent with the legislative intent set out in Section 380.0552(2)(e), Florida Statutes, that a local government establish a land use management system that promotes and supports a diverse and sound economic base. Undoubtedly, the evidence in this case proved that the Ordinance will cause a negative impact to the economy of Monroe County. No economic impact study was necessary to prove this fact. Although neither the County nor the Department conducted an economic impact study prior to the County's adoption and the Department's review of the Ordinance, the County and the Department were aware of the fact that there would be a negative economic impact as a result of the Ordinance and took that fact into consideration in carrying out their respective roles. More importantly, there is no requirement in Chapters 120 or 380, Florida Statutes, that an economic impact study be performed prior to adoption of a land development regulation or during the Department's review. Nor is the Department authorized as part of its review pursuant to Chapter 380, Florida Statutes, to require such a study be conducted by the County. This is a de novo proceeding. Therefore, it was incumbent upon the Department in order to meet its burden of proof to present sufficient competent substantial evidence concerning the economic impact of the Ordinance during the formal hearing. Much of the proof was presented by Petitioners. The combined proof of the parties in this case concerning the economic impact of the Ordinance is sufficient to make a determination as to whether the Ordinance is consistent with Principle "d." The economy of Monroe County is primarily dependent upon the tourist industry. The tourist industry in turn is largely dependent on the natural resources of Monroe County. As a consequence, the majority of the Principles provide for a consideration of impacts on the environment of Monroe County. Ultimately, the economic viability of Monroe County depends on its environmental resources. Tourists who vacation in Monroe County generally require lodging while on vacation. Lodging in Monroe County is diverse and includes hotels, motels, camp grounds, RV parks, and rentals of dwellings, including rentals for periods of less than 28 days (rentals of dwellings of less than 28 days are hereinafter referred to as a "Short-Term Rental Property"). There are some tourists who prefer to stay in Short- Term Rental Property over other types of accommodations available in Monroe County. There are even some tourists who may go elsewhere if they are unable to find Short-Term Rental Property in Monroe County. A reduction in available Short-Term Rental Property may also cause some tourists to come to Monroe County during periods during the year when tourism is lower. The evidence, however, failed to prove the extent of the loss of tourists or the extent to which tourists may come to Monroe County during the off-season if there is a reduction in the available number of Short-Term Rentals Property as a result of the Ordinance. Short-Term Rental Property makes up a significant portion of tourist lodging available throughout Monroe County. Short-Term Rental Property has been a part of the tourist economy of Monroe County for the past twenty to thirty years. Short-Term Rental Property, however, has increased significantly recently as the number of dwellings in Monroe County has increased. The use of properties as Short-Term Rental Property adds to the economy of Monroe County by providing work for a number of businesses in Monroe County. Those businesses include real estate brokers, pool maintenance, lawn maintenance, home repairs, maid/cleaning services, and many of the businesses associated with the tourist industry. Occupancy rates for Short-Term Rental Properties in Monroe County have been averaging approximately 30% annually. Occupancy occurs primarily during the peak tourist season from December or January through April. To a lesser extent, occupancy is higher in August also. Occupancy rates in Monroe County hotels and motels during the peak season have been approximately 80% to 100%. There is currently a moratorium in the Florida Keys on the construction of hotels and motels. The moratorium is only effective through 2006. The construction of new transient rentals and the conversion of single-family residences to transient rentals are prohibited by the Plan. These measures represent an effort of the County to regulate the influx of tourists into Monroe County and very likely result in an increase of properties used for Short-Term Rental Property to meet the demand for tourist lodging. As a result of the Ordinance's restriction on where Short-Term Rental Property will be allowable in Monroe County, there will be some reduction in the number of Short-Term Rental Properties available to tourist in Monroe County. Petitioners have estimated that there will be a reduction of in excess of 3,000 Short-Term Rental Properties as a result of the Ordinance. This number is based upon the assumption that there are 4,100 Short-Term Rental Properties in Monroe County, that 76% of those rentals are located in IS districts, and that all 76% of the rentals in IS districts will be lost. The evidence failed to support a finding that such a reduction will occur. First, the Ordinance does not prohibit all Short-Term Rental Property in Monroe County. The use of properties for Short-Term Rental Property is not prohibited in several land use districts listed, supra. Short-Term Rental Property located in the cities of Key West, Key Colony Beach, and Village of Islamorada are also not subject to the Ordinance. There are approximately 12,000 seasonal rental units in incorporated and unincorporated Monroe County. To the extent that the demand for Short-Term Rental Property is not met by properties which are no longer available for use as a Short-Term Rental Property under the Ordinance, some part of that demand will be met by seasonal units not impacted by the Ordinance: those units located in land use districts in which Short-Term Rental Properties are not prohibited and in incorporated areas. The market will react to the market conditions as they change under the Ordinance. Petitioners' expert witness, Charles Ilvento, provided estimates of the losses in revenue and sales tax collections in Monroe County (at a rate of 11.55 per cent) as a result of the Ordinance. Those estimates were that Monroe County would experience $400,235,747.00 to $500,294,683.00 per year in economic losses and $6,262,444.00 per year in sales tax losses. The Department's and County's expert, Dr. Nicholas, estimated that the economic loss from the Ordinance to Monroe County would only be approximately 20 per cent of the loss projected by Mr. Ilvento and would last only two years. Mr. Ilvento also suggested that the losses would be continuing losses. The weight of the evidence failed to support the extent of losses suggested by Mr. Ilvento. First, in making his estimates, Mr. Ilvento relied upon the number of Short-Term Rental Properties Petitioners had estimated would be lost as a result of the Ordinance. Those estimates are too high. See Findings of Fact 68 and 69. Secondly, Mr. Ilvento did not take into account the economic benefit of keeping residential uses of property and the more commercial activities of Short-Term Rental Properties separate as required by the Ordinance. Because of the value of Short-Term Rental Properties, finding property for permanent residents is more difficult. In some areas, the use of residential property for Short-Term Rental Properties can dominate the residential nature of an area to a great enough extent that the residential sector will decline and withdraw. Thirdly, Mr. Ilvento did not take into account the increase in income that would be likely to occur from the sales of properties formerly used as Short-Term Rental Property which Petitioners assert will have to be sold. Fourthly, Petitioners' estimate of the number of properties that will be sold (50%), which Mr. Ilvento relied upon in reaching his estimates, is not reasonable. Petitioners' estimate of the number of Short-Term Rental Properties that will be sold assumes that the owners of those properties will no longer be able to afford them without the rental income they had previously enjoyed from the properties. This assumption is not realistic. It is not realistic to assume that half the owners of Short-Term Rental Properties acquired their property without taking into account the possibility that they would not be able to rent the property. Additionally, it is not reasonable to assume that an owner who is faced with the inability to carry the debt on a property will necessarily elect to sell it rather than rent it on a long-term basis. The evidence also proved that the economy of Monroe County will be benefited to the extent that the Ordinance enhances the availability of affordable housing and reduces adverse impacts to the environment of Monroe County, as discussed, infra. The benefits to the economy as a result of the increase in affordable housing and the reduction of adverse impacts to the environment will not be substantial, however. The weight of the evidence in this case proved that there will be an overall economic loss in Monroe County as a result of the Ordinance. That loss should last approximately two to three years. The amount of the loss projected by Dr. Nicholas is a more reasonable estimate of the loss which will occur. That loss, however, will be substantial. Protection of the Public Health, Safety, and Welfare. Section 380.0552(7)(l), Florida Statues, includes the following principle: "To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource." The County, in adopting the Ordinance, was primarily exercising its police power to protect the public health, safety, and welfare of the citizens of Monroe County. The County decided to exercise its power by limiting the types of activities allowable in areas designated for residential use. The County's decision was based upon extensive testimony on the negative impacts of Short-Term Rental Property in neighborhoods given at the public hearings conducted by the County. Additionally, the County was aware of the results of the November 5, 1996, referendum vote in which residents of the County voted in favor of prohibiting Short-Term Rental Property in IS districts. Although the testimony concerning the negative impacts of Short-Term Rental Property and the results of the referendum vote relied upon by the County constitutes hearsay, it does corroborate and explain the testimony of Denise Werling, a permanent resident of Monroe County. It is difficult to characterize the rental of Short- Term Rental Property as purely commercial or residential. While Short-Term Rental Property is being used by the people who rent the property as housing, which is in the nature of a residential use, the services they are provided in conjunction with the rental is more in the nature of a commercial enterprise. Therefore, Short-Term Rental Property use is more like the rental of a hotel or motel rental, rather than the a long-term lease of property. Additionally, although there are always exceptions, occupants of Short-Term Rental Properties use the properties for reasons that are different from the uses that occupants of long- term rentals or permanent residents put their properties. As a result of the differences between the uses to which occupants of Short-Term Rental Property and permanent residents put their property, conflicts arise where the two land uses exist side by side. Although Short-Term Rental Properties have been a part of Monroe County for many years, there has been an increase in the number of properties available for use as Short-Term Rental Property in areas which have also increasingly been used as neighborhoods for permanent residents during the past ten years. As a result, the conflicts between occupants of Short-Term Rental Properties and permanent residents have increased. Denise Werling testified as to the types of conflicts she has experienced with a Short-Term Rental Property located next door to her home. Ms. Werling's testimony was illustrative of the types of conflicts which can exist if Short-Term Rental Properties are allowed to exist in areas designated for purely residential uses. The following are the types of problems which are not uncommonly associated with the use of properties as Short-Term Rental Property in residential areas: Short-Term Rental Property may be occupied with excessive numbers of tenants. Occupants of Short-Term Rental Property usually do not have to work because they are on vacation. As a consequence, they usually want to maximize the time they spend enjoying their vacation. As a result, they may stay up later at night and/or get up earlier in the morning than permanent residents. Late- night parties are not limited to weekends. Occupants often have excessive numbers of vehicles, boats, jet skies, RV's, and boat trailers, which they park on residential streets or all over the Short-Term Rental Property. RV's are parked in the driveway, yard, or the street in front of the rental property. When occupied, these RV's can be noisy if they are powered by self-contained generators. Multiple boats may be docked along seawalls behind Short-Term Rental Properties. Ms. Werling has seen as many as six boats parked at one time against the seawall of the Short- Term Rental Property located next to her residence. Occupants of Short-Term Rental Property are unfamiliar with garbage and recycling schedules. As a result, full trash containers and recycle containers, if they are used, are left outside when the occupants leave, even though it may be several days before pickup is scheduled. Pets that are unfamiliar to the neighborhood are left to roam free. Ms. Werling has had dogs from the property next to hers on her property. Occupants of Short-Term Rental Property are strangers to the neighborhood. As a result, they can create a sense on uneasiness to permanent residents. This sense of uneasiness is not only a result of concern for the safety of the permanent residents and their families, but is also caused by the fact that occupants of Short-Term Rental Properties are less likely to adhere to accepted neighborhood practices. They may leave outdoor security lights on all the time. They are less concerned about trespassing onto seawalls and yards of the permanent residents. They are only in the area for a relatively short period of time and, consequently, they are likely to be less considerate of the neighboring permanent residents. Short-Term Rental Property occupants are often less familiar with the waters that surround their Short-Term Rental Property. As a result, they tend to run aground, causing damage to seagrass beds. While they could cause such damage elsewhere if they were staying at a hotel or motel, they at least have hotel and motel personnel that are familiar with the surrounding waters that they can consult before venturing out. Such information is not as readily available at Short-Term Rental Properties. 86 Most of the difficulties associated with Short-Term Rental Properties are not limited to occupants of Short-Term Rental Properties. Many are also caused by some permanent residents. Just as there are some Short-Term Rental Property occupants that are inconsiderate to permanent residents, there are permanent residents that are inconsiderate to their neighbors. The degree to which the problems are caused is much higher, however, for occupants of Short-Term Rental Properties than it is for permanent residents. Additionally, it is more likely that permanent residents that cause problems can be effectively dealt with through the enforcement of regulations than occupants of Short- Term Rental Property. Finally, some of the problems are only associated with occupants of Short-Term Rental Properties. Efforts to enforce regulations intended to deal with the problems associated with inconsiderate neighbors, such as anti-noise ordinances, have not been successful in eliminating the problems associated with Short-Term Rental Property. Short- Term Rental Property occupants have less reason to be concerned about regulations because they know they will be leaving the community in a short time. Whether they get along with their "neighbors" is not something they are concerned with. Ms. Werling has reported the problems she has experienced with the Short-Term Rental Property located next door to her. The problems, however, persist. Efforts of managers of Short-Term Rental Properties have not eliminated the difficulties associated with Short-Term Rental Property for the same reason that regulations are not effective and because not all owners of Short-Term Rental Property use local managers. Some absentee owners rent the properties themselves and they are not available to handle complaints as they arise. The County, in adopting the Ordinance, was exercising its police power to eliminate the incompatible use of Short-Term Rental Properties in districts intended for use as residential communities. In exercising its police power, the County prohibited Short-Term Rental Property in the most sensitive residential areas and placed restrictions intended to reduce the impacts of Short-Term Rental Properties in areas where Short-Term Rental Properties are allowed under the Ordinance. The County also restricted Short-Term Rental Properties in districts intended to protect the sensitive natural resources of the Florida Keys ACSC. Petitioners' have suggested that, while additional regulation of Short-Term Rental Property may be appropriate and beneficial, to prohibit Short-Term Rental Property in IS districts, given the negative economic impact of such a prohibition, would be detrimental to the overall welfare of Monroe County. Therefore, Petitioners have argued that the Ordinance is not consistent with Principle "l." Petitioners' suggestion does not support a finding that the Ordinance is not consistent with Principle (l), however. Petitioners' suggestion relates to the issue of the balancing of all the Principles, discussed infra. The County's Ability to Manage Land Use and Development. Section 380.0552(7)(a), Florida Statutes, includes the following principle: "To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation." Short-Term Rental Properties have existed throughout the Florida Keys for many years. Many owners of Short-Term Rental Property have obtained an occupational license for their rental business. Prior to the adoption of the Ordinance, the County Attorney and the Monroe County Code Enforcement Board, began to question whether the use of property as Short-Term Rental Property was an allowable land use in certain land districts in Monroe County under existing laws. The fact that some owners of Short-Term Rental Properties obtained occupational licenses from the Monroe County Tax Collector and licenses pursuant to Chapter 509, Florida Statutes, from the Department of Business and Professional Regulation does not, as Petitioners have argued, support a finding that the use of Short-Term Rental Properties have been an allowable use. An occupational license is, in essence, a method of collecting a tax pursuant to Chapter 205, Florida Statutes, for the operation of a business in a local jurisdiction. The issuance of such a license is not in the nature of a land use decision. Although there was a requirement in the County prior to the adoption of the Ordinance that occupational licenses issued by the Tax Collector be reviewed by the County for consistency with land use requirements, the evidence failed to support a finding that licenses were actually reviewed. Even if they had been, the evidence in this case only proved that the County simply did not give any consideration to whether existing comprehensive plans and land development regulations allow or prohibit the use of property as Short-Term Rental Property in all land use districts of Monroe County. Licenses from the Department of Business and Professional Regulation also do not constitute land use decisions. By taking the actions necessary to consider the problem of Short-Term Rental Properties and in adopting the Ordinance, the County has evidenced the willingness to take responsibility for the issue of whether the use of property for Short-Term Rental Property is allowable, and, if so, in which districts. By adopting the Ordinance, the County has resolved any ambiguity concerning the legality of Short-Term Rental Property. Even if it were clear that the use of Short-Term Rental Property has been allowable throughout Monroe County, the County has still taken steps to strengthen its capability for managing land use and development. The County took on a highly controversial issue, with vocal proponents and opponents, and made a decision as to the future direction of neighborhoods in Monroe County. In so doing, the County also took the actions necessary to actually "manage" Short-Term Rental Properties. The Environmental Issues. 100. Sections 380.0552(7)(b), (c), (e), (f), and (i), Florida Statutes, are Principles which require a consideration of the impacts on the environment of the Florida Keys: Principle "b": "To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat." Principle "c": "To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat." Principle "e": "To limit the adverse impacts of development on the quality of water throughout the Florida Keys." Principle "f": "To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys." Principle "i": "To limit the adverse impacts of public investments on the environmental resources of the Florida Keys." (This Principle could also be grouped with Section 380.0552(7)(h), Florida Statutes). These Principles are consistent with the legislative intent set out in Section 380.0552(2)(a), Florida Statutes, that a local government establish a land use management system that protects the natural environment of the Florida Keys. Part I of Chapter 380, Florida Statutes, is titled "The Florida Environmental Land and Water Management Act of 1972." Section 380.012, Florida Statutes. The legislative purpose for establishing Part I and designating areas of critical state concern was primarily to provide State protection from adverse development impacts on environmentally sensitive areas of the State: Big Cypress Swamp, Green Swamp, Apalachicola Bay, and Monroe County's Florida Keys. All of these areas include environmentally sensitive lands and water bodies. The Ordinance does not specifically deal with environmental issues. The Ordinance involves primarily a balancing of a local government's police power with the economic impact of the exercise of that power. The Ordinance does, however, have some small positive impacts on the environment of Monroe County. Most importantly, the Ordinance does nothing contrary to the legislative intent to protect the Florida Keys ACSC. Monroe County's economic viability depends on the preservation and protection of its natural resources, including the quality of its surrounding waters. Tourism, which is the largest industry in Monroe County, is dependent on Monroe County's natural resources. The tourists who come to Monroe County are, in large part, attracted to Monroe County by its environmental qualities. Unfortunately, tourists are generally the worst abusers of the natural environment of Monroe County. This is true whether a tourist is staying in a motel or a Short-Term Rental Property. Tourists have more free time and, as a consequence, tend to participate in the recreational activities available in Monroe County more frequently and intensely than permanent residents. They simply use the resources more than a permanent resident. For example, in addition to spending more time on the water during good weather, tourists tend to engage in water activities even during inclement weather. Unlike a permanent resident who can wait until the next clear weekend, a vacationer will not necessarily be in Monroe County when the weather clears and therefore, is likely to be on the water at every opportunity. Tourists use the resources of the Florida Keys ACSC throughout their vacation. Unlike permanent residents, who are limited primarily to enjoying the natural environment of the Florida Keys ACSC on weekends and holidays, tourists are free to enjoy the environment everyday they are in Monroe County. In addition to the more frequent and intense use of the resources of Monroe County, tourists also cause harm to the environment because of their lack of knowledge about the Florida Keys ACSC or because they simply don't care. Monroe County's nearshore waters consist of numerous unmarked channels that leave many areas of Monroe County, including many canals of IS Districts. The unmarked channels can be difficult to navigate because of shallow waters typical of the Florida Keys. Navigation through these channels is learned largely from experience. The shallow nearshore waters contain beds of seagrasses that provide an important part of the ecosystem of the Florida Keys. They support juvenile fish and shellfish, which in turn provide feeding stock for birds and larger fish species. Grounding on these seagrass beds causes propeller scaring damage to the seagrasses. Tourists are also not familiar or do not care about limits on the numbers of fish and other marine life that can be caught, the sensitively of coral reefs and other natural resources of the Florida Keys ACSC, or the need to minimize human contact with the Key Deer. As a result, tourist tend to create more harm to most of the environmental features of the Florida Keys ACSC. Tourists that stay in Short-Term Rental Properties located in IS Districts and other land use districts are not significantly different from tourists that stay in other transient rentals available in Monroe County such as hotels or motels in terms of their impacts on the environment. The adverse impacts on the environment from tourists described, supra, are caused by tourists regardless of where they may be staying. Tourists that stay in Short-Term Rental Properties, however, do cause slightly more harm to the environment than other tourists for several reasons. First, a large number of tourists bring their own boats and ski jets with them to Monroe County. Those who stay in Short-Term Rental Properties generally do not operate or store their boats out of commercial marinas or use public boat ramps. As a consequence, it is more difficult to educate them about the adverse impacts they may cause on the environment. Marinas and other commercial locations where boats may be docked provide greater information about the waters of the Florida Keys and are more likely to have adequately marked access channels than Short- Term Rental Properties. Marinas, hotels, and motels also have knowledgeable individuals available to answer questions concerning the surrounding waters, a service not available to Short-Term Rental Property occupants. Prohibiting Short-Term Rental Properties in IS Districts will reduce the number of inexperienced boaters using the numerous canals of IS Districts to access the waters of Monroe County. Secondly, tourists that occupy Short-Term Rental Properties are more likely to cause harm to the Key Deer and other sensitive natural resources due to the proximity of their Short-Term Rental Property to the Key Deer and other resources. Key Deer inhabit the Florida Keys primarily on Big Pine Key. The Key Deer is an endangered species. Properties located on Big Pine Key and in other areas where Key Deer are found are used for Short-Term Vacation Rental Properties. Adverse impacts on the Key Deer result from their interaction with humans, through feeding, automobile deaths, and dogs that chase the Key Deer. While all tourists have impacts on the Key Deer due to their interaction with the them, the location of Short-Term Rental Property within the Key Deer habitat, especially areas located away from the main highway corridor of the Florida Keys, U.S. Highway 1, increases the amount of interaction between those tourists who occupy those Short-Term Rental Properties and the Key Deer. Tourists staying in IS Districts on Big Pine Key, especially those in Port Pine Heights at the north end of the Key, feed the Deer more because they are there more often, and cause more traffic problems because of the drive required to get to their rental property. Principle "e" requires that land development regulations limit the adverse impacts of development on water quality. There are public health concerns associated with untreated or improperly treated sewage, including viruses, bacteria, and parasites. Throughout most of the Florida Keys ACSC, septic tanks are used to dispose of sewage. Many of the septic tanks were installed years ago and do not meet today's standards for septic tanks. The size of a septic tank that must be installed depends on what the property will be used for. For single family residences, it is assumed that 100 gallons per day of sewage will be disposed of. Hotels are also assumed to create the same amount per room, while resorts, camps, and cottages are assumed to produce 200 gallons per day. Establishments with self-service laundries are assumed to produce 750 gallons per day. The use of Short-Term Rental Properties is somewhere between the use of single-family residence, hotels, resorts, and establishments with self-service laundries because of the similarity in how tourists in Short-Term Rental Properties and occupants of other transient locations live. Additionally, Short-Term Rental Properties are often occupied with more persons than would normally be found in a single-family residence. Although some septic tanks are designed with even more capacity than may be required by rules, not all septic tanks are designed to handle the increased use that occupants of Short-Term Rental Properties can cause. As a consequence, there is at least the potential for adverse consequences to the water of the Florida Keys ACSC to the extent that Short-Term Rental Properties are not better regulated by the County. Through the Ordinance, the County is attempting to ensure that the potential harm from the over use of septic tanks in Monroe County is regulated. The Ordinance limits the number of occupants of Short-Term Rental Properties. The Ordinance also requires that applicants for vacation rental permits submit a report from the Department of Health verifying compliance with existing septic tank or on-site sewage disposal system regulations. The Ordinance has no direct impact on Principle (i) and some parts of the other environmental Principles. The Ordinance is not, however, inconsistent with any of the Principles which deal with the environment. Community Character and Historical Heritage of the Florida Keys. Section 380.0552(7)(f), Florida Statutes, provides for a consideration of the "community character" of the Florida Keys, in addition to environmental considerations. This principle is consistent with the legislative intent set out in Section 380.0552(2)(b), Florida Statutes, that a local government establish a land use management system that promotes the community character of the Florida Keys. Section 380.0552(7)(g), Florida Statutes, includes the following Principle: "To protect the historical heritage of the Florida Keys." Although the evidence proved that the vacation rental of single-family residences has been a part of the character and historical heritage of the Florida Keys for many years, the problem being dealt with by the County through the Ordinance has not. The Ordinance does nothing to harm the community character or historical heritage of Monroe County. Public Investments. Section 380.0552(7)(h), Florida Statutes, requires that "the value, efficiency, cost-effectiveness, and amortized life of existing and proposed major public investments be protected, including the following investments: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and the Florida Keys Electric Co-op; and Other utilities, as appropriate. This principle is consistent with the legislative intent set out in Section 380.0552(2)(c), Florida Statutes, that a local government establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. The evidence in this case failed to prove that the Ordinance has any impact, positive or negative, on "existing and proposed major public investments " Affordable Housing. Section 380.0552(7)(j), Florida Statutes, provides the following Principle: "To make available adequate affordable housing for all sectors of the population of the Florida Keys." This Principle is consistent with the legislative intent set out in Section 380.0552(2)(d), Florida Statutes, that a local government provide affordable housing in close proximity to places of employment in the Florida Keys. There is a significant problem finding housing in Monroe County. It is especially difficult finding housing affordable to lower income residents. The shortage of housing has been caused by the lack of available developable land and restrictions on development, including those imposed by the Rate of Growth Ordinance (hereinafter referred to as "ROGO"). ROGO limits the number of new permanent residential units which may be constructed in the Florida Keys to 255 per year. Because of the restrictions on available new housing in Monroe County, prices for residential property have increased over the years. Currently, most 2 to 3 bedroom properties used as Short-Term Rental Properties are selling for $200,000.00 to $300,000.00. These properties do not come under the definition of "affordable housing" for lower income residents. "Affordable housing" is defined in terms of housing which can be afforded by very-low income, low-income, and moderate-income persons. Homes that costs over $200,000.00 do not constitute "affordable housing" as defined in the County's Land Development Regulations. The market for homes selling for over $200,000.00 in Monroe County is not high. Therefore, to the extent that properties located in IS Districts that are currently used as Short-Term Rental Properties are placed on the market, there will not be a direct increase in housing for very-low income, low- income, or moderate-income persons. Many of the Short-Term Rental Properties in Monroe County are second homes that are used only part of the year by the owners and are used as Short-Term Rental Properties the rest of the year. Some Short-Term Rental Properties are properties that have been purchased for investment purposes and/or with the intent of using the properties as the owners' permanent residence upon retirement. As a result, these properties are not available for use by permanent residents. Regardless of their costs, with a limited number of new residential properties allowed under ROGO, the use of new properties as Short-Term Rental Properties necessarily reduces the overall availability of housing in Monroe County. The restriction caused in the overall housing market in Monroe County can reasonably be expected to also negatively impact the availability of affordable housing. Potential revenues to property owners from Short-Term Rental Properties in IS Districts are higher then the potential revenues from long-term rentals to permanent residents. Consequently, as more property owners in IS Districts are attracted to using their properties as Short-Term Rental Properties, there is a reduction in the amount of housing available for long-term rentals. Therefore, the use of properties in IS Districts as Short-Term Rental Properties decreases the supply of long-term rentals available for residents of Monroe County. By prohibiting the use of properties in IS Districts as Short-Term Rental Properties, the total properties in Monroe County available for housing, including for long-term rentals, for permanent residents, will increase. As supply increases demand for all housing, including an affordable housing to some small extent, will be better met. There is a demand for long-term rentals in Monroe County. Two to three bedroom homes located in IS Districts can easily be rented for $1,000.00 to $1,500.00 per month. Some segment of the permanent population of Monroe County could afford such rentals if they were available, freeing up less expensive housing. Additionally, some absentee owners are able to purchase more expensive property because of their ability to rent the property as Short-Term Rental Property and apply the rental income to meet a higher mortgage payment. As a result, the real estate market in Monroe County builds more expensive homes to meet the demand. To the extent that this market for higher priced homes is reduced by the Ordinance, the allocation of ROGO residential units may be used for less expensive housing. The overall impact on the increase in available housing for permanent residents of Monroe County as a result of prohibiting Short-Term Rental Properties in IS Districts will generally "trickle" down throughout the entire housing market and benefit the availability of affordable housing. Natural or Manmade Disaster and Post-Disaster Relief. Section 380.0552(7)(k), Florida Statutes, provides the following Principle: "To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or manmade disaster and for a postdisaster reconstruction plan." Hurricane evacuation in Monroe County is a difficult problem because of the low elevations in the Florida Keys and the lack of evacuation routes. Through most of the Florida Keys, there is only one evacuation road: U.S. Highway 1. The County has adopted, and put in place, hurricane evacuation plans for Monroe County. Estimated hurricane evacuation times for Monroe County determine the extent to which growth can be allowed in the future. The estimated hurricane evacuation time for Monroe County is determined by a ROGO hurricane evacuation model. The model takes into account seasonal residents, hotel/motel residents, transient rental occupants, and permanent residents. Petitioners presented evidence in an effort to show that the reduction in Short-Term Rental Properties will cause the calculation under the ROGO hurricane evacuation model to be inaccurate. The evidence failed to support such a finding. The evidence failed to prove how occupants of Short- Term Rental Properties are treated for purposes of the hurricane evacuation model. Testimony that they are included as seasonal occupants was not credible. Even if occupants of Short-Term Rental Properties are considered seasonal occupants for hurricane evacuation purposes, it does not necessarily mean that the Ordinance is inconsistent with Principle "k." It would only mean that the results of the hurricane evacuation model need to be revised. Rather than hampering hurricane evacuation efforts in Monroe County, the Ordinance should have a beneficial impact by giving the County more accurate information about the actual number of Short-Term Rental Properties in Monroe County. Consideration of the Principles as a Whole. Section 380.0552(7), Florida Statues, specifically provides that the Principles are to be "construed as a whole and no specific provision shall be construed or applied in isolation from the other provisions." The evidence in this case supports a conclusion that the Ordinance has no or little impact on most of the Principles, except Principles "d" and "l." To the extent that there is any impact on the other Principles, the evidence proved that the Ordinance is consistent. This finding, however, is not dispositive of this case. Ultimately, the question of whether the Ordinance is consistent with the Principles is dependent upon an evaluation of the consistency of the Ordinance with Principles "d" and "l." Clearly, the Ordinance will have a short-term negative impact on the economy of Monroe County. Just as clearly, the Ordinance will enhance the safety, health, and welfare of the residents of Monroe County. When the legislative intent of Chapter 380, Florida Statutes, is taken into account, it is clear that this is not the type of land use decision the State is most concerned with. Because the Ordinance does essentially no harm to the natural environment and waters of the Florida Keys ACSC, the State's interest in the Florida Keys ACSC is protected. The issue is essentially a local one. Consequently, some deference should be afforded the County to make this difficult choice. Given the purpose of the Department's involvement in this matter, the legislative intent of Chapter 380, Florida Statutes, the County's effort in considering the issues, and the evidence presented in this proceeding, it is concluded that the County's effort to protect the public safety, health, and welfare is sufficient to overcome any harm to the economy. Therefore, the Ordinance is consistent with the Principles, considered as a whole.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Community Affairs enter a Final Order approving Monroe County Ordinance 004-1997 as consistent with the Principles for Guiding Development of Section 380.0552(7), Florida Statutes. DONE AND ENTERED this 30th day of September, 1998, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 Filed with the Clerk of the Division of Administrative Hearings this 30th day of September, 1998. COPIES FURNISHED: Kelly B. Plante, Esquire Kenneth J. Plante, Esquire Wilbur E. Brewton, Esquire Gray, Harris and Robinson, P.A. 225 South Adams, Suite 250 Tallahassee, Florida 32301 Jeffrey Bell, Esquire Herzfeld & Rubin 5310 North West 33rd Avenue, Suite 102 Ft. Lauderdale, Florida 33309 Kathleen R. Fowler, Assistant General Counsel Sherry Spiers, Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Ralf G. Brookes, Esquire Hugh J. Morgan, Esquire Karen K. Cabanas, Esquire Morgan & Brookes 317 Whitehead Street Key West, Florida 33040 James T. Hendrick Monroe County Attorney 310 Fleming Street Key West, Florida 33040 James F. Murley, Secretary Department of Community Affairs Suite 100 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100 Stephanie Gehres Kruer, General Counsel Department of Community Affairs Suite 325-A 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100
Findings Of Fact The Declaration of Condominium for Oaks of Broward was filed by Margen, a Florida Partnership, in May, 1974 in the Public Records of Broward County and with the Petitioner. All documents required to be filed by Margen with Petitioner were filed and the fees paid. Simultaneously a recreational lease was filed of property adjacent to the condominium in which Barnett Bank of Hollywood was named as Trustee and Lessor, and The Oaks Condominium Association, Inc. of Broward as Lessee. Between May 1974 and early 1976 Margen sold to individuals 39 condominium units at Oaks of Broward. In early 1976, Housing Investment Corporation, mortgagee, began foreclosure proceedings which resulted in title to all of the Oaks condominium property, except for the 39 units previously sold, being taken by The Oaks of Broward, Inc., Respondent. Thereby Respondent became successor in title to the previously unsold 75 units in the building and to the position of the Lessor on the long-term recreational lease. On or about August 1977, Respondent offered for sale the 75 condominium units pursuant to prospectus admitted into evidence as Exhibit 2. In addition thereto and as part of the sales effort Respondent executed and recorded the Declaration Waiving Rents, a copy of which was admitted into evidence as Exhibit Neither of these documents was filed with Petitioner. The 75 units owned by Respondent were sold with the recreational lease rents waived. Pursuant to the terms of the recreational lease the original 39 buyers pay $20 per month, either to the Association or directly to the Lessor. This lease is a net/net lease, which means the Lessor performs no services except to provide the premises themselves. The Condominium Association is responsible for and pays all maintenance, taxes, upkeep and expenses for the operation of the Recreation Area. All condominium units, the original 39 as well as the remaining 75, pay to the Association, as part of the common expenses, their pro rate share of those operating expenses. It is this disparate treatment of the two groups of unit owners with respect to the recreational lease rent payment of $20 per month that is one subject of Petitioner's request for a cease and desist order. The second subject of the Petition for a cease and desist order is Petitioner's contention that Respondent is a Developer and is required to file documents and pay a $10 filing fee for each of the 75 condominiums sold, regardless of whether fees for these 75 units were paid by Respondent's predecessor in title.
Findings Of Fact At all times here involved, Respondents Robert P. Powers and Allen L. Lindow were real estate brokers registered with Petitioner, Alan M. Levy was a salesman registered with Petitioner, and Quality Rentals, Inc. was registered as a corporate broker. During the summer of 1978 Respondent Levy became interested in acquiring a corporate broker and learned from Cynthia Odeneal that she had an inactive corporation that she could transfer to him. This corporation, Quality Rentals, Inc., was registered with the Secretary of State in 1977, but the authorized stock had never been issued nor had the corporation ever engaged in business. Ms. Odeneal assigned her subscription rights to the stock in the corporation to Levy by letter of 15 September 1978 which was received by him in October 1978. At the time Quality Rentals was incorporated Ms. Odeneal was doing business in Gainesville as Gates Rentals. The mailing address supplied to the Secretary of State for Quality Rentals, Inc. was Ms. Odeneal's residence address. Rose J. Vines was employed by Ms. Odeneal in Gator Rentals. In the summer of 1978 Ms. Odeneal contemplated moving Gator Rentals to a new address in Gainesville, but after she and Ms. Vines visited those offices, Ms. Odeneal decided to close Gator Rentals. On 15 September 1978 Ms. Vines leased this office space she and Ms. Odeneal had looked at and opened a lease referral service under the name of Quality Rentals. No authorization to use the name Quality Rentals was given by Ms. Odeneal and when she became aware of the use of her corporate name, she told Ms. Vines to stop. This occurred after Ms. Odeneal had transferred the subscription rights to Quality Rentals, Inc. stock to Levy. Ms. Vines paid the first month's rent in September, but no further rental payments were made. The second-month rental, due October 5, 1978, was extended until 15 October. When payment was not received then, the lease was terminated. During the period of September and October 1978, Rose Vines d/b/a Quality Rentals, advertised a lease referral service and charged fees to allow customers to look at lists of places for rent. In November 1978 Levy, holding subscription rights to the corporation, entered into discussions with Respondent Lindow for the latter to serve as broker and active firm member of Quality Rentals, Inc. Lindow, with the assistance of Levy, prepared and submitted the application for registration of Quality Rentals, Inc. (Exhibit 1) dated 15 November 1979. Lindow never performed any broker functions or received any compensation from Quality Rentals. By letter dated 8 January 1979 Lindow resigned as active firm member of Quality Rentals, Inc. By application dated 11 January 1979 Robert Powers applied for registration as active firm member of Quality Rentals, Inc. On December 5, 1978 the Secretary of State dissolved Quality Rentals, Inc. for failure to file the annual corporation report due before July 1978. This dissolution, effective 8 December 1978, was mailed to Quality Rentals at the former address of Gator Rentals, then closed. Notice of this dissolution was not received by Levy or anyone at Quality Rentals, Inc. until after the corporate report submitted January 1979 was received by the Secretary of State's office. Quality Rentals was then notified of the dissolution and the additional fees necessary to restore the corporation. Upon receipt of this information, the attorney for Quality Rentals submitted the necessary documentation and fees and Quality Rentals, Inc. was restored to good standing. At no time during this period was any Respondent aware of the activities of Ms. Vines in Gainesville under the name of Quality Rentals.
The Issue Whether Respondents' licenses as real estate brokers should be suspended or revoked, or the licensees otherwise disciplined, for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint, dated September 28, 1981. This proceeding is based on an administrative complaint filed by Petitioner, Board of Real Estate, alleging that Respondents, while engaged in a rental service business which advertised and sold rental property information or lists, for an advance fee to prospective lessees, utilized a contract or receipt agreement which included language defining when a "rental has been obtained" that was contrary to the intent of Rule 21V-10.30, Florida Administrative Code, and that therefore Respondents had violated Subsection 475.453 and 475.25(1)(b), Florida Statutes. It further alleged that Respondents failed to refund 75 percent of an advance fee to specific prospective tenants as required by Subsection 475.25(1)(e), Florida Statutes and therefore constituted a violation of Subsection 475.25(1)(d), Florida Statutes. At the commencement of the hearing, the parties submitted a Proposed Stipulation of facts which was accepted by the Hearing Officer and constitutes the Findings of Fact hereinafter. No witnesses testified at the proceeding nor were any exhibits entered in evidence other than the four exhibits attached to the Stipulation. (Exhibit 1)
Findings Of Fact Respondent Jack Braunstein is a licensed real estate broker having been issued license number 0146924. The last known address of this Respondent is 916 North Federal Highway, Fort Lauderdale, Florida 33304. Respondent Rent Aid, Inc., is a licensed corporate real estate broker having been issued license number 0133234. The last known main office address of Rent Aid, Inc., is 916 North Federal Highway, Fort Lauderdale, Florida 33304. At all times material herein Respondent Braunstein was the sole active broker of and for Respondent Rent Aid, Inc., doing business at the corporate main office located in Fort Lauderdale, Florida. As said active broker, Braunstein was responsible and liable for the acts and/or omissions of the associates of Rent Aid, Inc. performed in the scope of their employment; and was responsible and liable for the acts and/or omissions of Rent Aid, Inc. At all times material herein, Respondent Rent Aid, Inc., was engaged in a full service real estate brokerage business which included representing potential buyers and sellers of real property and potential landlords and tenants with regard to rental properties. As part of the business Rent Aid, Inc. entered into contracts with prospective tenants for an advanced fee, as shown by Exhibit "A" to the Complaint and incorporated herein by reference. That the contract or receipt agreement forms provided by the Respondents, have inserted therein additional language as to specifically stating that "a rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. On or about September 16, 1980 Jan Spear and Deborah Nigro entered into the contract, an accurate copy of which is appended to the Complaint as Exhibit "A", with Rent Aid, Inc. That under the terms of the contract, Respondent had the discretion to refuse any and all refunds if they had shown to the prospective tenant an available rental unit which met the terms specified and requested by the prospective tenant, even if the prospective tenant declined to rent said unit and demanded a refund of the paid fee within the required time frame. That Respondent's practice was to refuse demands for refund made where, in Respondent's opinion, a bona fide effort had been made to obtain a rental, which efforts had been unsuccessful through no fault of Respondent's. Jan Spear and Deborah Negro made written demand upon Respondent's for a partial refund of the fifty ($50) fee which they had paid Respondent's pursuant to the contract. This demand was made within thirty days of the contract date as shown by therefund refusal dated October 12, 1980, attached to the Complaint as Exhibit "B" and incorporated herein by reference as true and accurate. The contract utilized by Respondent's does not strictly conform to the refund required by Rule 21V-10,30 in that the conditions under which a refund would be payable are restricted beyond the scope of said Rule, and SS 475.453(1), Florida Statutes. Respondent utilized the Contract form in question in reliance upon advice received from his prior counsel, Gregory Jones, as shown by a letter dated April 1, 1980. A true and accurate copy of which is attached hereto as Exhibit "C". Sal Carpino, attorney for the Department of Professional Regulation, had been provided with a copy of the form utilized by Respondent and had approved the format of said form without approving a discrepancy of the language in question in this proceeding, to wit: "a rental has been obtained with company (Rent Aid, Inc.) provides a guaranteed available rental unit upon the terms specified and requested by members." In response to this proceeding, Respondent has made full and complete refund to Jan Spears and Deborah Nigro and has agreed to voluntarily stop all use of the Contract form in question, and use only such a form as strictly complies with 475.453(1) and Rule 210-10.30 and to furnish a copy of said form to the Department conformance with said Rule."
Recommendation That the Board of Real Estate issue a private reprimand and impose a $100 fine against Respondents Jack Braunstein and Rent Aid, Inc. for violation of Subsections 475.25(1)(d) and (e), Florida Statutes. DONE AND ENTERED this day of March, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM 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 5th day of March, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire Suite 101 2715 East Oakland Park Boulevard Ft. Lauderdale, Florida 33306 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Frederick H. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C.B. Stafford, Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801
