Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, I make the following: The Defendant, Leroy Wilson, is a registered real estate broker with the Commission and during January 1, 1975 to November 5, 1975, Defendant was registered as trading as Overpass Real Estate. On April 27, 1975, Defendant was the owner of residential property located at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida. On April 28, 2/ Robert English and his wife Mazie English in response to a "for sale" sign posted at 291 N.W. 29th Terrace, Ft. Lauderdale, Florida, went to the real estate brokerage office maintained by the Defendant at room 201 Romark Building, 3521 West Broward Boulevard, Ft. Lauderdale, Florida. Defendant and Mr. and Mrs. English discussed and negotiated a deposit receipt contract dated April 28, 1975, between the Englishes as purchasers and Defendant as seller for the purchase and sale of property owned by Defendant located at 291 N.W. 29th Terrace. Mrs. English testified that they put up an earnest money deposit of $300 acknowledged by Defendant, however, Defendant executed the deposit receipt contract reflecting an earnest money deposit of $600. (See FREC Exhibit number 2). Mrs. English testified that part of the terms of the contract was that she would apply for a mortgage loan but when it was determined that her daughter who was to participate with her in the purchase, was not able to stay with her, she and her husband decided not to apply for a mortgage loan. She explained to Defendant and he agreed to return the $300 deposit that she had submitted along with the deposit receipt contract. When the Englishes demanded the return of their deposit, Defendant advised them that "it was the law that the deposit must be kept for 6 weeks, and thereafter, he would have to keep the deposit another ten days." After the expiration of the six week period, the Englishes called the Defendant's office and was advised that he no longer lived there and other efforts by the Englishes to contact the Defendant were fruitless. Thereafter on or about August 20, 1975, the Englishes filed a complaint with the Commission. Approximately two days after the Commission initiated its investigation, the Defendant returned the $300 deposit to the Englishes. (See FREC Exhibit number 3). N.B. Wolf an employee of Gulf Atlantic Mortgage Brokers testified that she was familiar with the document received into evidence as Exhibit number 2 which is the deposit receipt contract entered into by the Defendant and the Englishes. She testified that she did not recall ever having taken a credit application for the Englishes to apply for a mortgage loan. Roy E. Conner, the operations officer for Plantation First National Bank testified that he caused to be gathered the bank records as they relate to the escrow account maintained by the Defendant at that bank. An examination of those bank records revealed that the Defendant's escrow bank account maintained at Plantation First National Bank had a shortage of $5 as of September 16 and that on August 14, his escrow bank account showed a balance of $65 when it should have reflected a balance of $300 in earnest money deposits. See FREC Exhibit number 4 received into evidence. Pruyn investigated Defendant's brokerage office on September 16, at 2951 N.W. Avenue, Ft. Lauderdale, Florida. Based on an official inspection, Pruyn noted a number of inadequacies in that there were no letterheads, no desks, no chairs, no business mail, no diary of witnesses or any official sign as required and set forth in Commission Rule 21V-10.07 and 10.09, Florida Administrative Code and Section 475.22, Florida Statutes. See FREC Exhibit number 5 received into evidence. As previously stated, the Defendant did not appear at the hearing nor did he have a representative present to present any defense to the charges made by the Commission in the administrative complaint.
Findings Of Fact At all times relevant hereto, respondent, Annette J. Ruffin, held real estate broker license number 0076385 issued by petitioner, Department of Professional Regulation, Division of Real Estate. When the events herein occurred, respondent was owner and broker for Century 21 A Little Bit Country at 915 Lithia Pinecrest Road, Brandon, Florida. She is presently employed by U. S. Homes Corporation in Tampa, Florida. James and Shirley Yaksic wished to sell their residence at 3512 Plainview Drive in Brandon, Florida. They listed their property with Century 21 Solid Gold Properties II, Inc. in Brandon in December, 1983. Deborah Cassidy was a salesman at respondent's office, and knew her parents, J. R. and Helen Anderson, were in the market for a new home. With Cassidy's assistance, the Andersons executed a contract on February 16, 1984, to purchase the Yaksics' residence. The contract called for a purchase price of $65,000 with a down payment of $10,000, including a $500.00 cash deposit which was given to respondent's firm several days after the contract was executed. The deposit was placed in Ruffin's escrow account on February 28, 1984. The Andersons were also required to seek VA financing on the balance owed. After the contract was accepted by the Yaksics on February 17, Helen Anderson made application on February 23 for a $55,000 VA loan with Norwest Mortgage, Inc., a lending institution in Tampa. Florida. Since her husband was in New York State, only Helen signed the loan application agreeing to allow verification of all representations made in the application. While filling out the loan application at Norwest, Helen Anderson learned that the Veterans Administration allowed applicants to apply for loans equal to 100% of the value of the property. Since the Andersons preferred to make no down payment, Helen Anderson wrote Norwest in early March requesting that their loan application be increased from $55,000 to $65,000. She also noted that she did not sign the "disclosure statement" on behalf of her husband since "it would be incorrect." In response to this Letter, Norwest wrote the Andersons in early April requesting a number of items needed to process the application as well as an amendment to the contract reflecting that the sellers agreed to 100% financing by the buyers. The Andersons did not respond to this inquiry. In addition, they never, advised the sellers that they had changed their loan application to 100% financing, and that the sellers would be required to pay more discount points at closing. Because no amendment to the contract was ever filed, Norwest processed the application for a $55,000 loan. Due to insufficient income and excessive obligations, the application was denied. The Andersons were so notified by letter dated May 3, 1984. After Helen Anderson received the denial letter she telephoned respondent's office manager on several occasions to seek a refund of her deposit. This information was apparently conveyed to Ruffin by the office manager. About the same time the sellers were advised by the listing salesman that the Andersons did not intend to close. On May 5, the sellers wrote a letter to Solid Gold requesting that it notify the selling broker to not "release the binder to the buyers as we are entitled to this money." For some reason, a copy of this letter was not mailed to respondent until May 31, and she received it in early June. Even though Ruffin may have been orally advised in early May of the Yaksics' intended claim by the listing office, she had no concrete evidence of this intention until she received their letter in early June. On June 29, 1984, Helen Anderson wrote respondent's office manager a letter requesting a return of her deposit no later than July 9. She also indicated the letter was being sent pursuant to instructions received from petitioner. On July 2, Ruffin replied by letter stating that "we cannot release your deposit as the house was off the market for such a long time," and that Norwest had advised her that the Andersons "did not bring in a lot of the information until it was too late." After Helen Anderson filed a complaint with the Department of Professional Regulation (DPR), DPR wrote respondent a letter dated July 19, 1984, stating in part that Anderson had been refused her deposit and that its records did not show that respondent had notified DPR of conflicting demands for that money. On July 30, 1984, respondent replied to DPR's inquiry and gave her version of the circumstances surrounding the transaction. After receiving no reply to this letter, she wrote a second letter in late December, 1984 to the Division of Real Estate (Division) requesting advice on the deposit matter. The Division sent a her form for requesting an escrow disbursement order on January 4, 1985 which was returned by respondent within a few weeks. An escrow disbursement order was eventually issued by the Division on April 19, 1985 directing her to refund the deposit to the Andersons. She did so on May 5, 1985. In conjunction with its investigation, DPR obtained copies of respondent's escrow account bank statements during the period when the Andersons' deposit was retained by Ruffin. Although the $500.00 deposit should have been maintained in that account from February, 1984 until disbursement in May, 1985, her account dropped below $500.00 on sixteen separate days during this period of time, and continuously from February 28 through April 30, 1985. Respondent, who has been a broker since 1977, maintained a record of all escrow deposits and expenditures in a ledger book which reflected when the Anderson money was deposited and when it was paid out. Although she inferred the problem may have been attributable to her bookkeeper, no adequate explanation was given as to why her bank balances dropped below $500.00 on a number of occasions. She acknowledged that she learned of the conflicting demands in May, 1984, but felt that she could still "solve" the credit problem of the Andersons. She stated that she intended to give notice to the Division of the conflicting claims on the deposit and needed no encouragement from the Division to do so. There is no evidence that respondent has ever been disciplined on any other occasion since first receiving her salesman license around twelve years ago.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent be found guilty as set forth in the Conclusions of Law portion of this order. All other charges should be DISMISSED. It is recommended that respondent's broker license be suspended for ninety days and that she be fined $500.00. DONE and ORDERED this 5th day of September, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Bearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1985.
Findings Of Fact Upon consideration of the relevant oral and documentary evidence adduced at the hearing, the following pertinent facts are found: Respondent Charles Shane was formerly employed by IREC, Inc. (International Real Estate Consultants). His assigned duties were administrative in nature and included the performance of research and field work pertaining to appraisals. It was not one of his assigned duties to procure appraisals and his salary was not contingent upon the appraisals performed by IREC, Inc. By application dated January 22, 1973, respondent Shane applied to the Florida Real Estate Commission for registration as a real estate salesman. By certificate number 0117007, Shane was registered as a real estate salesman effective December 20, 1973. He is presently registered as a non-active salesman. By letter dated January 9, 1973, on IREC stationary, respondent Shane, signing as Vice President, wrote a letter to John R. Vereen stating that, upon acceptance by Vereen, IREC would conduct a market value appraisal of certain property for a compensation of $2,500.00. This letter bears the handwritten notation "cancelled with no liability 3/5/73." On March 5, 1973, respondent Shane, again signing as Vice President of IREC on IREC stationary, wrote a letter to Mr. Vereen stating "I will conduct a market value appraisal. . ." of the same property as that described in the January 9th letter for a compensation of $2,500.00. The checks in payment of this amount were made payable to respondent Shane individually and not to IREC, Inc. As indicated by Exhibits 6,7,10,11,12 and 13, appraisal reports were submitted to various entities on dates ranging from December 29, 1971, through March 20, 1973. The cover letters are each signed by respondent Shane as Vice- President and by one other person as "M.A.I. Consultant." These reports contain several pages concerning the qualifications of the appraiser. Respondent Shane's qualifications are included. Mr. Edward Waronker, who co-signed five of the six reports listed above, did not write or prepare the reports. It was Waronker's duty as an independent appraiser for IREC to inspect the property and review the appraisal reports prepared. A letter on IREC stationary dated July 23, 1974, from respondent Shane makes reference to a June 19, 1973, appraisal report. In such letter, Mr. Shane states "I have reviewed the referenced appraisal, which was conducted under my direction as of June 19, 1973." As noted above, respondent Shane did not appear at the hearing and therefore no evidence was offered in his behalf. A "petition for mitigation" was filed with the Real Estate Commission stating that respondent did not sign the appraisal reports with any intention of holding himself out as an appraiser or salesman. In summary, said petition states that respondent Shane signed these documents as the person of the corporation and not as a real estate appraiser or broker and that, had he been fully informed of the Florida real estate law, "he would not have continued in the manner that he did." Respondent Richard W. King has been registered with the Florida Real Estate Commission since 1957 and, prior to the instant complaint, has never been cited for a violation of the statutes, rules or regulations governing brokers or salesmen. Respondent King was employed with IREC, Inc. in June of 1973. According to the testimony, the registration of IREC and King was not approved by the Real Estate Commission until October of 1973. From the time that respondent King went to work with IREC, he had effective control and supervision of all appraisals performed by IREC. To King's knowledge, respondent Shane was never involved in the decision-making process surrounding appraisal work, and did not sign appraisal reports after June of 1973.
Recommendation Based upon the findings of fact and conclusions of law recite above, it is recommended that: the registration of respondent Charles Shane be suspended for a period of three (3) months; and the charges relating to respondent Richard King be dismissed. Respectfully submitted and entered this 10th day of September, 1976, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 ================================================================= AGENCY FINAL ORDER ================================================================= FLORIDA REAL ESTATE COMMISSION THOMAS M. MURRAY, Petitioner, vs. PROGRESS DOCKET NO. 2709 DADE COUNTY CHARLES SHANE, IREC, INC., CASE NO. 76-844 and RICHARD W. KING, Respondents. /
Findings Of Fact On September 4, 1984, Idus B. Bowen and his wife, Jean, were shopping for a lamp in Respondents' furniture store in Palatka, Florida. Mr. and Mrs. Bowen had recently retired and moved to Palatka where they intended to settle. The clerk they dealt with at the furniture store, who happened to be the Respondents' daughter, in the course of conversation regarding the Bowens' move, indicated that her father had a place for sale on the water. When the Bowens indicated some interest, she got some of the details as to size, location, and price from her father and discussed the matter with the Bowens. As they seemed to show some interest, she introduced them to her father, Respondent Richard Woodall, who discussed it with them and, that same day, took them out to see the property which was, at the time, occupied by his wife and him. When Woodall first talked with the Bowens about the property in his office at the furniture store, he advised the Bowens that he was a real estate broker but that he was selling this property, his personal home, as the owner and not the broker. Several times that day, both on the way to the house and at the house, he advised the Bowens he was selling as an owner and not as a broker. On the first visit to the house, Mr. Woodall showed the Bowens both the inside and the outside. They stayed approximately an hour and a half and the Bowens got a full view of the house and the property on which it was located and Mr. Woodall gave Mr. Bowen a plat of the property. No agreement was reached that day, however. Two days later, on September 6, 1984, Mr. Bowen again went to the furniture store to talk over the terms Mr. Woodall was offering on the sale. At this time he was advised by Mr. Woodall that there was an outstanding loan on the property of approximately $39,400.00 at 8 1/2% interest. This figure was determined by Mr. Woodall through a call to the lending institution and he received a tentative approval for the Bowens to assume this loan at a rate of 11 7/8%. Mr. Woodall passed this information on to the Bowens but in doing so, mistakenly stated the assumption percentage rate as 11.78%. In reality, the figure was 11 7/8% which, when converted to a decimal presentation, is reflected as 11.875%. Mr. Bowen did not realize this difference, however, until some time after the contract was signed. On this same date, September 6, 1984, after receiving the financing information from the lending institution, Mr. Woodall suggested that the Bowens again go out to the house so that his wife could show the property from a woman's point of view. When the Bowens agreed, an appointment was made for the showing by Mrs. Woodall for the next day, September 7, 1984. On the 7th, Mrs. Woodall showed the Bowens the house in detail. After doing so, she suggested that the Bowens stay for coffee and refreshments and when the Bowens agreed, called her husband to come home and join them. Before Mr. Woodall got there, however, Mrs. Woodall asked if the Bowens were ready to sign a contract. The Bowens indicated they were not. When Mr. Woodall arrived, he and Mr. Bowen went out for a walk around the property during which Mr. Bowen asked about the need for a fence around the swimming pool. Mr. Woodall assured him that since the house was located on the water, it was not necessary to fence the pool area all the way around. Mr. Woodall, while admitting Mr. Bowen asked about the water level in the canal, states there was no discussion of flooding and he further contends that Mr. Bowen did not discuss the issue of the fence until after he went to the County office subsequent to signing the contract. No doubt Mr. Woodall answered the questions asked by Bowen to the best of his knowledge and belief. Based on this information they went back to the house where Mr. Bowen agreed to sign a contract for the purchase on Saturday morning, September 8, 1984, in the Respondents' office in the furniture store. On September 8, 1984, both the Bowens and the Woodalls signed a contract for the sale of the Woodall's property for a purchase price of $125,000.00 with $5,000.00 to be placed in escrow in Respondent, Rich Hill Realty's escrow account. The contract also called for the Bowens to assume a mortgage in the amount of $39,400.00 at 11.78% and the balance due was to be paid in cash at closing to be held as soon as possible. The contract was conditioned upon the purchaser obtaining a firm assumption commitment within 15 days. At the time of signing the contract, Mr. Bowen gave the Woodalls a check for $5,000.00. When the Bowens arrived, the contract had already been prepared and signed by Mrs. Woodall. Once all remaining parties had signed, Mr. Woodall had it witnessed. The contract called for the deposit of $5,000.00 to be placed in escrow and Mr. Bowen assumed that it would be so placed because the sellers were both real estate professionals. He contends that if he had not thought the deposit would be placed in escrow, he doubts he would have paid a deposit to the Woodalls at that time. In all his previous real estate purchases, the money was placed into escrow and not drawn out until later. On September 10, 1984, after further consideration of the purchase and based on the fact that the pool was the same depth from one end to the other, a depth beyond the height of his non-swimming wife, Mr. Bowen went to Mr. Woodall to see if he would release him from the contract. When Mr. Woodall refused, however, he accepted the refusal. He immediately made application to assume the Woodall's loan with Security 1st Federal Savings & Loan Association, which, on September 18, 1984, furnished him a good faith estimate of settlement charges which reflected the interest rate at 11.875%. Just about this time, Mr. Bowen also became concerned as to whether the property was in the flood zone and called the Putnam County Zoning Board where he was advised that the property in question was in fact in the flood plain. When he also asked if the pool needed to be fenced, he was told that where there was a pool, it was required to be fenced a],1 around with a four foot high fence with lockable gates. When Mr. Bowen received this information, he immediately reported it to Mr. Woodall who said he would check with the County and get it straightened out. Mr. Woodall thereafter called Mr. Bowen back and told him that the property was declared to be in the flood plain sometime in 1983 and that the pool regulation became effective sometime before that, but that since the house was built before either regulation came into effect, it was grandfathered in and the rules would not apply. In the meantime, Mr. Bowen's application to assume the Woodall's loan was approved. No assumption agreements were ever signed by the Bowens because by this time Mr. Bowen had determined that the deal was not good for him and he had decided that he would not go through with it. Mr. Bowen consulted an attorney who discovered some additional minor discrepancies in the transaction such as (1) the legal description of the property was incorrect, and (2) the estimate of closing costs had not been furnished by the seller. Neither of these discrepancies are relevant to the issues for consideration at this hearing, however. On the basis of what he had already discovered and this additional information, Mr. Bowen refused to close on the contract as called. for on September 25, 1984, and requested a refund of the $5,000.00 deposit by a letter from his attorney to the attorney for the Woodall's. Mr. Bowen did not receive an answer to his demand for refund of the deposit and despite several subsequent requests, the money has never been refunded. No action has been filed in court to force return, however. On November 28, 1984, Respondents notified the Bowens their deposit had been forfeited for failure to close. Mr. Bowen admits that Mr. Woodall advised him on their first trip to the property that he was a real estate broker but that he did not deal ,with the public. He only dealt in real estate for his own investments. Mr. Bowen also admits that he did not read the contract in full before he signed it. He admits that there were no special clauses inserted in the contract at his request nor did he request that any comments be made in the contract regarding the flood plain or the pool. When he signed the contract, however, he claims he was relying on the representations made to him by Mr. Woodall which he checked out only after affixing his signature to the contract. Both Mr. and Mrs. Bowen declined to sign the contract contending they felt the property had been misrepresented by Mr. Woodall in the particulars regarding the alleged misrepresentation dealing with the fence around the pool, the fact that the property is located on the flood plain, and the fact that there is a discrepancy in the interest rate. The $5,000.00 deposit was in fact placed into the Rich Hill Realty escrow account by Mr. Woodall. However, on January 31, 1985, more than three months later, Mrs. Woodall, an officer of Rich Hill Realty, drew the amount out of the escrow account and purchased a certificate of deposit with the Citizen's 1st National Bank of Crescent City with it. This certificate has been rolled over upon maturity since that time. With regard to the state of the County Ordinances concerning fences around swimming pools in this County, according to Peter M. Christensen, the Codes Administrator for Putnam County, pools built before 1975 would not require fencing. The requirement for a four foot fence was enacted by the County Commission in 1976. With regard to the flood plain situation, the area where the property in question is located is classified A- 3,which means that the first floor of any dwelling must be at least six feet above mean sea level. Mr. Christensen cannot say for certain whether this particular property is located in the flood plain because he did not have the maps available to him at the hearing. However, the majority of the property in the area where the Woodall property is located is within the flood plain. According to Ms. Ann Keele, a specialist in the residential lending service of the Security 1st Federal Savings & Loan Association, which holds the mortgage on the Woodall property, at the time the Woodalls secured their loan, there was no requirement for flood insurance because there was no flood plain regulation in effect. She recalls the flood insurance program as coming into effect sometime in 1980 and her bank's policy is to require flood insurance if (1) the community is participating in the flood insurance program, or (2) if the area is prone to flooding. When the flood insurance program went into effect, the bank did not notify existing borrowers of the need to take out flood insurance. Since the Woodalls purchased their property and got their mortgage prior to 1980, they well may not have known of the change in the law and the requirement for flood insurance. As a matter of fact, had the Woodalls kept their property, they would not have had to purchase flood insurance. Upon assumption, however, a new purchaser would have to buy it. To determine those properties requiring flood insurance, the bank uses flood maps provided by a governmental agency. Most real estate agencies use the same maps but Ms. Keele cannot be sure whether Respondent had one or not.
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is, therefore: RECOMMENDED that the Administrative Complaint against the Respondents here be dismissed. RECOMMENDED this 7th day of November, 1985, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 7th day of November, 1985. APPENDIX The Petitioner's Proposed Findings Of Fact have been considered and are, as to each: Paragraphs 1-6 Accepted 6 Accepted except that portion of the Finding which states the Buyer had relied upon Woodall's assurances that the 11.78% interest rate could be assumed. The evidence, while reflecting that the Bowens believed the rate was 11.78%, fails to establish that this was a major fact on which they relied. 8-10 Accepted 11 Accepted except for the term "neglected." The evidence clearly shows the refusal to return was based on full knowledge of the situation and not a matter of neglect. 12-13 Accepted. Respondents' Proposed Findings Of Fact have been considered and are, as to each: Paragraphs Accepted Accepted in part and denied in part. The evidence does reflect some conflict as to whether the Bowens were advised the property was in the flood plain or not and whether they were advised the pool had to be fenced. It has been found by the undersigned that Respondents' information given to the Bowens was in error but from ignorance rather than from design and that said negligence was simple and not culpable. 3-4 Accepted 5 Accepted as to the preparations for and failure of closing. Rejected as to the course of conduct attributed to the Bowens for the reasons implied and rejected as immaterial to the Findings Of Fact as to the availability of the courts to rectify a dispute. COPIES FURNISHED: Arthur Shell, Jr., Esq. Department of Professional Regulation Division of Real Estate 400 W. Robinson Street Orlando, FL 32801 Earl Nicholson, Esq. 407 St. John's Avenue Palatka, FL 32077 Fred Roche Secretary Department of Professional Regulation 130 N. Monroe Street, Tallahassee, FL 32301 Harold Huff Executive Director. Division of Real Estate Department of Professional Regulation P. O. Box 1900 Orlando, FL 32802 Salvatore A. Carpino General Counsel Department of Professional Regulation 130 N. Monroe Street Tallahassee, FL 32301
Recommendation Based on the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order revoking the license of Respondent, Annette J. Ruffin, to be a real estate broker. RECOMMENDED this 27th day of May, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of May, 1987.
Findings Of Fact At all pertinent times, both respondents held real estate broker's licenses. The corporate license is No. 0222663 and the individual license is No. 0159888. The individual respondent has been the only owner of the corporate respondent and the only broker the corporation has ever employed. At one time Angela Lewis worked for Broker Jim, Inc. as a licensed real estate salesperson. On October 6, 1981, it was she who signed, on the broker's behalf, a listing agreement with Laverne Lockhart and Faith Willis, the sisters who jointly owned the house at 1535 NW 116th Street in Miami, Florida (the house) . Petitioner's Exhibit No. 2. Kenneth G. Wilson, who wanted to buy the house, had $5000 available. The house was encumbered with a mortgage in the approximate amount of $33,000 and the sisters eventually agreed to take $44,000 for the property. On the form contract signed by both owners and Mr. Wilson, and dated November 25, 1981, under the heading "Terms and conditions of Sale:", the following was typewritten: 1,000 as mentioned above. Purchaser agrees to make an additional deposit in the amount $4,000 before closing. Purchaser agrees to assume an existing first mortgage in the Approx. amount $33,000, payab[l]e $340.00 P.I.T.I at 10.5 percent per annum in accordance with the terms and conditions set forth therein. Purchaser to obtain a P.M. 2nd mort[g]age in the amount of $6,000 at 18 percent per annum payable Approx. $152.37 for a period of 5 yrs. Balance of purchase price to be paid in cash or cashier check at time of closing. Property being purchased in its present as is condition. Petitioner's Exhibit No. 3. Elsewhere on the printed form appears the following: When this contract is executed by the purchaser and the seller and the sale is not closed due to any default or failure on the part of the purchaser, the seller, at his option, may seek to enforce this contract, or else the seller may direct the holder of the deposit to pay the broker his brokerage fee not to exceed one-half of the deposit and to pay the balance of the deposit to the seller as consideration for execution of this agreement, and the holder of the deposit shall be held harmless by all parties for disbursement in accordance with this agreement. Petitioner's Exhibit No. 3. Ms. Lewis prepared the form contract. Mr. Muhammad, as he is now known, read it over and approved it. In retrospect, he believes this was a mistake, because the contract fails clearly to reflect the parties' understanding that the offer was contingent on Mr. Wilson's ability to borrow $6,000, to be secured by a second mortgage on the house. A deposit ticket dated November 25, 1981, accompanied Mr. Wilson's check for $1000 when respondents deposited it to their escrow account. The bank credited the escrow account on December 1, 1981. Neither Mr. Wilson's efforts to obtain a loan, nor those of respondents on his behalf, availed, and word reached Ms. Lockhart that the transaction was doomed for want of sufficient purchase money. Over the phone, Ms. Lockhart told Helen Jackson, respondents' secretary, that she wanted a "refund" of the deposit. A lawyer Ms. Lockhart consulted communicated a similar demand to respondent Muhammad personally. Respondents gave Ms. Lockhart no money and no accounting. The money stayed in respondents' escrow account until it was used on Mr. Wilson's behalf in the purchase of another house respondents had listed.
