Findings Of Fact Respondent is now and was at all times material to this action a licensed real estate broker in the State of Florida, holding license number 0064475. Respondent operated his own real estate brokerage firm under his license. The firm was located in Niceville, Florida. In addition to his real estate brokerage business Respondent maintained and managed his personal real estate investments. Several of these personal investments included rental property which Respondent would later sell. One such piece of property was located at 104 Perdido Circle, Niceville, Florida, and is the property involved in this action. Prior to July 6, 1985, the Respondent, as seller and not as a broker, advertised for sale the Perdido property. Sometime around July 6, 1985, Robert L. Mitchell and June F. Mitchell looked at the Perdido property. Frank Ray, a salesman for John Brooks Realty, an unrelated real estate firm showed the property to the Mitchells. They liked the property and wanted to buy it. Frank Ray made arrangements for himself and the Mitchells to meet with Respondent in order to discuss the terms of the potential purchase contract. They met on July 6, 1985. The meeting lasted approximately an hour to an hour and a half. During the lengthy meeting Respondent went over the purchase terms contained in the contract of sale. The Mitchells main concern was to have immediate occupancy of the house. Special terms were developed for renting the property. At some point during the meeting the down payment came under discussion. Originally, the Mitchells had planned on a $1500 down payment which was acceptable to Respondent. However, as the meeting progressed the Mitchells decided they would like to reduce the amount of the down payment. Respondent informed the Mitchells that the only way he could decrease the $1500 down payment was to make the money a non-refundable option payment. Respondent then marked out the $1500 down payment figure contained in the purchase contract and inserted a $1200 figure. Respondent concurrently added the language "option payment" next to the $1200 figure. The remainder of the contract was discussed and the Mitchells signed the amended document. The Mitchells then wrote a check to Respondent, personally, in the amount of $1200. The note section of the check the Mitchells wrote contained the language "house down payment." The exact discussion on the down payment/option is not clear. What is clear from the evidence is that neither party had a meeting of the minds over what the $1200 check was. The Mitchells being very inexperienced in real estate thought it was a down payment. Although it is doubtful the Mitchells understood the legal meaning of the term "down payment." Respondent thought it was a non- refundable option payment. Absolutely no evidence of fraud or misrepresentation on the part of Respondent was demonstrated. Likewise, there was no evidence that Respondent in any way used his knowledge or expertise in the real estate market improperly. The final result of the negotiations was that the Mitchells had entered into what on its face purports to be a rental contract with an option to buy. However, since there was no meeting of the minds over the option, the option was eventually unenforceable. Since there was no meeting of the minds regarding the $1200 the money was not properly escrowable property. In essence the $1200 was neither a down payment nor an option payment. This lack of escrowability is borne out by the sales contract which calls for another escrow agent. 1/ The Mitchells took possession of the property for approximately three months. The Mitchells failed to obtain financing. The contract was conditioned upon the Mitchells obtaining financing, and the transaction failed to close. A dispute arose between the parties concerning the down payment/option money. When the dispute could not be resolved by the parties, the Mitchells filed a lawsuit against Nevin H. Nordal demanding a refund of the $1200 "house down payment." As a result of the Mitchell's lawsuit the County Court, in Okaloosa County, Florida, Summary Claims Division, by Amended Final Judgment dated January 20, 1987, awarded the sum of $1,028,87. The judgment figure is the balance of the $1200 after deduction of a counterclaim of $171.13 for cleaning the house after the Mitchells evacuated the property. Additionally, the Respondent was required to pay costs in the sum of $57 for a total of $1,087.87 due the Mitchells. The judgment amount is bearing interest at a rate of 12 percent per annum. The County Court judgment contains no findings of fact as to the Judge's reasoning on the judgment award. The Mitchells have repeatedly demanded of the Respondent that he pay the judgment. He has repeatedly refused to pay the judgment. Respondent did account to the Mitchells for the money when he told them he had deposited the check and had spent the funds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore RECOMMENDED that the Administrative Complaint failed against Respondent, Nevin H. Nordal, be dismissed. DONE and ENTERED this 4th day of March, 1989, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of March, 1989.
Findings Of Fact At all times pertinent hereto Respondent O'Connor was a licensed real estate broker in the State of Florida having been issued license lumber 0065137. Respondent Berg was a licensed real estate salesman having been issued license number 0391098. At all pertinent times alleged in the Administrative Complaint Respondent Berg was licensed and operated as a real estate salesman in the employ of broker Respondent Edward M. O Connor. On or about February 15, 1953, Respondent Berg entered into a contract as purchaser seeking to purchase certain real property in Charlotte County, Florida, described as: Lot 26, Block 1, Charlotte Harbour Subdivision, also known as 201 Cortex Street, Charlotte County, Florida. The property was owned by Louis J. Knetter. Mr. Knetter, as seller, was represented by Emanuel Consalvo, a licensed real estate salesman or broker. This proposed contract, contrary to the allegations of Petitioner, made no mention in its terms of any $500 binder or earnest money deposit. Rather, the contract, instead of mentioning a cash deposit, had the words "commission" clearly written on the top, being Berg's pledge to pay $300 of the real estate commission he would be entitled to on the transaction to the buyer at closing. The proposed contract was tendered to Emanuel Consalvo , the seller's agent, who examined it thoroughly with his client Louis Knetter. Mr. Knetter subsequently refused to enter into that proposed contract. Respondent Berg then made a second offer to purchase the same property which was accepted by the seller. This offer was made on April 18, 1983. The contract regarding the second offer was prepared from a rough draft which Respondent Berg had handwritten. He handwrote the word "commission" precisely as on the original offer of February 15, 1983. On the final typed copy of the contract the abbreviated word "comm.," was typed into the contract to indicate (and it was Respondent Berg's intent) that the commission to be earned by Berg would be used as a down payment at closing rather than any proposal by Berg (or O'Connor) to post $500 or other amount of cash earnest money deposit upon the offering of the contract. Respondent Berg genuinely believed that anything of value could be inserted into a contract to provide consideration and could serve as sufficient consideration therefor including his offer to pay to the buyer a part of the real estate commission he would be entitled to with regard to that transaction Neither Respondents Berg nor O'Connor made any representations or statements, verbally or written, to Louis Knetter or Emanuel Consalvo to the effect that there ever was an earnest money deposit in any amount posted by the purchaser Berg, or on account at O'Connor Realty. Kevin O'Connor, the son of Respondent O'Connor, is also a licensed real estate broker who holds a degree in the field of real estate. He established that the textbook practice and indeed, the general real estate industry custom or practice in the Charlotte County area allows for anything of value to be used as consideration for a real estate contract and that a cash earnest money deposit is not necessary. He established the industry practice with regard to the posting of earnest money deposits for real estate sales contracts and demonstrated that unless a contract, by its terms, clearly indicates that an earnest money deposit has been posted, there is no basis for a seller or his agent to assume that to be the case. Kevin O'Connor, a witness for the Respondents, had personal contact with the seller's agent, Emanuel Consalvo, regarding the transaction and established that the Respondent Edward M. O'Connor was not even in his office or in the area during the time of the contract proposal or offer. Kevin O'Connor was operating the office in the Respondent Edward O'Connor's absence. Kevin 0'Connor established that the question of an earnest money deposit was never discussed with Consalvo and that neither Consalvo nor Knetter ever raised a question during the pendency of the transaction concerning the existence of an earnest money deposit. Kevin O'Connor never told Consalvo that any money was in escrow nor did Respondent Berg or Edward O'Connor. No representation was ever made to Consalvo or Knetter, singly or jointly, to the effect that any money had been placed on deposit or in escrow with regard to either of the two offers. Indeed, Mr. Consalvo acknowledged that no one at 0'Connor Realty ever told him of any money being placed in an escrow account. The transaction ultimately failed to close because the seller failed to include all the furniture with the home as required by the contract. At that juncture, the seller demanded the supposed $500 earnest money deposit to be paid him as a forfeiture on the mistaken belief that an earnest money deposit had been posted with regard to the transaction. Such was not the case however, nor was it ever represented to be the case.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED that the complaint filed by Petitioner against Respondents William Berg and Edward M. 0'Connor t/a O'Connor Realty, be DISMISSED in its entirety. DONE and ENTERED this 5th day of February, 1986 in Tallahassee, Florida. P. MICHAEL RUFF 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 February, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 84-0180 PETITIONER'S PROPOSED FINDINGS OF FACT: Accepted. Accepted. Accepted. Rejected as not comporting with the competent, substantial, credible evidence presented. Accepted, but not in itself dispositive of the material issues presented. Rejected as not comporting with the competent, substantial, credible evidence presented. Accepted, but not dispositive of the material issues presented in itself. Accepted, but not dispositive of the material issues presented. Accepted, but not dispositive of the material issues presented. RESPONDENT EDWARD O'CONNOR'S PROPOSED FINDINGS OF FACT: Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected as constituting a conclusion of law. Accepted. Rejected as constituting a conclusion of law. Accepted. Accepted. Accepted. Accepted. RESPONDENT WILLIAM BERG'S PROPOSED FINDINGS OF FACT: Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Elwood P. Safron, Esquire SAFRON, RODNEY & DZUPAK 306 E. Olympia Punta Gorda, Florida 33950 Jesus Hevia, Esquire WOTITZKY, WOTITZKY, WILKINS, FROHLICH & JONES 201 West Marion Avenue Punta Gorda, Florida 33950 Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact At all times pertinent to the charges, the Respondent Joyce A. Chandler, was a licensed real estate broker in the State of Florida, holding license number 0348072. Respondent's license was suspended for a period of one year pursuant to a Final Order of the Florida Real Estate Commission on August 4, 1983, which became effective September 3, 1983. To date, the Respondent has failed to take steps necessary to reactivate her license and she remains in a suspended status. Gerald and Mary Anne Jennings were the owners of a home located at 15413 S.W. 105th Avenue, Miami, Florida. There was a first mortgage on the home held by Stockton, Whatley and Davin. In the early part of 1981, the Jennings were experiencing financial difficulties and in an effort to help pay off debts secured a second mortgage in the amount of $15,000.00 from Davide and Associates, Inc. This mortgage from Davide and Associates, Inc., was a wrap-around mortgage making the total obligation (Stockton, Whatley and Davin plus Davide) approximately $44,000.00. In August of 1981, Davide and Associates, Inc. sold the wrap-around mortgage to Mr. and Mrs. Leon Shiff. In January of 1983, the Jennings made a decision to sell their home as they were having difficulty making payments to Shiff. The Jennings contacted Mr. Shiff and informed them of their decision, and Mr. Shiff attempted to secure prospective purchasers for them. On or about January 30, 1983, the Respondent Chandler made an offer to purchase the Jennings home, which offer was rejected by the Jennings. On or about February 2, 1983, the Respondent made a second offer to purchase the Jennings home which offer was accepted. The terms of this February 2, 1983 contract provided that the Respondent was to give sufficient funds to the Jennings to catch up on all mortgage arrearages, tender to the Jennings approximately $4,000.00 in cash, and the Jennings were to take back a third mortgage in the amount of $4,000.00. Respondent, in turn, was to assume the Stockton, Whatley and Davin mortgage and agreed to pay off the Shiff mortgage within 90 days. The Jennings desired to return to West Virginia immediately. Therefore, the Respondent promised and represented to the Jennings that she would secure tenants to occupy the residence while she attempted to obtain the necessary financing and to close the transaction and would use the proceeds from the rental money to make all mortgage payments. On or about February 22, 1983, the Respondent and the Jennings signed yet a third contract. Said contract has not been produced and the location of it is unknown. On this same date, the Respondent had the Jennings sign, in blank, a Warranty Deed. The Respondent represented to the Jennings that the Warranty Deed was nothing more than a Power of Attorney which enabled the Respondent to rent the house and use the rental money to make the mortgage payments while the Respondent sought the financing per the terms of the contract. Based on the Respondent's representations and promises, the Jennings vacated the residence and stopped making mortgage payments. Thereafter, the Respondent secured a Mr. and Mrs. Hill as tenants for the property. Mr. and Mrs. Hill came to the Respondent as tenants from Prudential Life Insurance Company. Mr. and Mrs. Hill had recently experienced damage to their home due to a fire and the Respondent secured rental property for the Hills on behalf of Prudential. In regards to this matter, Prudential paid via a double party check made payable to Robert Hill and Princess International, Inc. $1,950.00. The Respondent goes by the name of P. J. Chandler, Princess Chandler, Princess international and Princess International, Inc. These tenants remained in the Jennings' home for approximately two months. The Respondent made no mortgage payments to either Stockton, Whatley and Davin or to Mr. Shiff for the period of February 1983 to August 1983. Further, the last mortgage payment made was for the January payment delivered to Mr. Shiff by Mrs. Jennings. In order to keep the first mortgage in good standing with Stockton, Whatley and Davin, Mr. Shiff took it upon himself to make these mortgage payments although he was receiving no mortgage payments on the wrap-around from Mr. & Mrs. Jennings or the Respondent. In June of 1983, Mr. Shiff enlisted the aid of Herman Isis, attorney at law, to begin foreclosure proceedings on the residence. In August of 1983, the residence was sold to Shiff at the foreclosure sale. Thereafter, a certificate of title was received by Mr. Shiff in regards to said foreclosure purchase. The Jennings received only $3,248.00 from the Respondent as opposed to the approximate $8,000.00 contract amount. The transaction never closed as promised by the Respondent. Finally, the Respondent failed to make the necessary mortgage payments as represented and promised by her to the Jennings.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent Joyce A. Chandler's license as a real estate broker be revoked. DONE and ORDERED this 22nd day of March, 1985, in Tallahassee, Leon County, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of March, 1985. COPIES FURNISHED: James R. Mitchell, Esquire Department of Professional Regulation, Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, Florida 32802 Fred Graves, Esquire 315 S.E. Seventh Street Ft. Lauderdale, Florida 33301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Fred Roche Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802
The Issue The issue posed for decision herein is whether or not James T. Speaks, Respondent, engaged in conduct amounting to a failure to maintain in an escrow bank account deposits he received as a selling broker which were entrusted to him in the course of his brokerage activities until a proper or authorized disbursement of such monies was made. Based on its Administrative Complaint filed on May 17, 1978, the Florida Real Estate Commission, Petitioner, seeks to revoke, annul, suspend or otherwise discipline licensee James T. Speaks, who holds Florida Real Estate License No. 0083459, based on conduct which will be set forth herein in detail.
Findings Of Fact Based on the testimony presented during the course of the hearing, the following relevant facts are found: During October of 1976, Donna W. Ross was a listing broker to sell the property of Katherine Scanlon. During mid-October, 1976, Respondent Speaks located purchasers for the Scanlon property and submitted an offer to the listing broker, which offer was accepted by the seller. Respondent Speaks deposited a $1,000.00 binder deposit in his escrow account. (See FREC Composite Exhibit No. 7.) The closing of the real estate transaction in the Scanlon property took place in Attorney David Booher's office who, based on evidence received during the course of the closing, questioned Respondent Speaks as to the negotiability of a $1,000.00 check Respondent Speaks presented as a refund of the escrow deposit he had tendered to secure the deposit receipt contract for the Scanlon property. Virginia RawIs, who was formerly employed by Booher and Crabtree, Realtors, called the Barnett Bank of Regency to verify if sufficient funds were on deposit in Respondent Speaks' account and was advised that sufficient monies were not on deposit to cover the check. At that juncture, Respondent Speaks acknowledged that he had tendered a check which was drawn on an account without sufficient funds to cover it and agreed that the $1,000.00 binder deposit should be deducted from his commission monies due. This agreement was acceptable to all parties concerned at the closing and another check representing the commission monies due Respondent Speaks, less the $1,000.00 deposit, was drawn and made payable to Speaks. Donna W. Ross, the listing broker, was also present during the hearing and verified the testimony of Attorney Booher respecting the presentation by Respondent Speaks of the $1,000.00 check which was not secured by sufficient funds. As noted in the appearance section of this Recommended Order, the Respondent, James T. Speaks, did not appear during the hearing although copies of the Notice of Hearing were mailed to his last known addresses.
Recommendation Based on the foregoing findings of fact and conclusions of law, I hereby recommend that the Registered Real Estate Broker license of Respondent, James T. Speaks, be suspended for a period of two (2) years. RECOMMENDED this 5th day of January, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received, and the entire record compiled herein, the following relevant facts are found. By its Administrative Complaint filed March 1, 1982, the Petitioner, Department of Professional Regulation, Florida Real Estate Commission, seeks to suspend, revoke or take other disciplinary action against Donna Migone and Pedro Realty, Inc., as licensed real estate salesperson/corporation, respectively, who have been issued License No. 0304648. 2/ On August 8, 1980, Mrs. Mary Perez, c/o Douglas Spring, Esquire, 15211 N.W. 60th Avenue, Miami Lakes, Florida 33014, entered into a listing agreement with Respondents Migone and Pedro Realty, Inc., for the sale of Mrs. Perez' property located at 414 West 67th Street, Hialeah, Florida. The asking purchase price of the subject property was $69,900. On August 18, 1980, Mrs. Perez was presented with a contract for the sale of her residential property by Donald E. Morton, a licensed real estate broker employed by International Realty Association and Investment Corp. and Respondent Donna Migone, the listing salesperson for Respondent, Pedro Realty, Inc. The contract/offer presented was for the sum of $66,000. Mrs. Perez reviewed the contract/offer presented by Respondent Migone and thereafter Respondent Migone filled out a form entitled "Approximate Seller Expenses" to explain to Mrs. Perez how the proceeds of the sale would be disbursed. During this explanation, Respondent Migone computed the commission due herself and Donald Morton both on the basis of a sales price of $56,000 and $66,000 pursuant to the contract/offer presented. In this regard, Mrs. Perez agreed to hold a $10,000 second mortgage to assist the purchasers in securing the financing to purchase the property. During that time, August 18, 1980, the purchasers gave Donald E. Morton a $4,000 purchase-money deposit for the subject property to be held in escrow until closing. On December 5, 1980, the closing occurred in a typical manner whereby the seller and the buyer separately delivered their respective documents and monies to the Amerifirst Federal Savings & Loan, 900 N.E. 125th Street, Suite 200, North Miami, Florida. There was no formal gathering of the parties and Respondent Migone and Donald E. Morton were notified on or about December 10, 1980, by Mrs. Perez' attorney, Douglas Spring, that the closing had occurred. Respondent Migone and Donald E. Morton computed the commission on the basis of six percent (6 percent) of the full purchase price of $66,000. This amounted to $3,960 as computed by Respondent Migone on one of the two net sheets presented to Mrs. Perez. On December 18, 1980, Respondent Migone and Donald E. Morton were paid $1,980 each from the escrow fund, and Donald E. Morton sent Mrs. Perez a check for $40.00 representing the balance due her from the escrow deposit fund. Petitioner contends that the commission should have been computed by Respondents Migone and Pedro Realty, Inc., on the basis of six percent (6 percent) of the amount of $56,000 or $3,360 as reflected on one of the net sheets presented to Mrs. Perez by Respondent Migone. On this point of dispute, evidence reveals that when the contract/offer was presented to Mrs. Perez, Mrs. Perez reviewed the offer and at that time was presented with two forms filled out by Respondent Migone entitled "Approximate Seller Expenses" to reflect how the proceeds of sale would be disbursed. During this discussion, Mrs. Perez agreed to the $66,000 offer and agreed to hold a $10,000 second mortgage to assist the purchasers in completing the real estate transaction. The testimony reflects that Mrs. Perez was interested in receiving a monthly income check and the income from the $10,000 mortgage was a means whereby this could be achieved. During the course of these discussions, one of the forms computed by Respondent Migone for the commissions reflected that commissions would be computed based on $56,000 whereas another form was computed reflecting the total purchase of $66,000. A careful reading of the testimony of Mrs. Perez reflects that she understood that she would be paying the commission based on the total purchase price of $66,000 and not based on the $56,00 as the Petitioner contends. Mrs. Perez indicated that she knew that she was selling the property for $66,000 and the six percent (6 percent) commission (on that basis) was no surprise to her. (TR 33, 40, 41, 57, 65, 72, and Respondent's Composite Exhibit B). Further, Respondent Migone credibly testified that there was a great deal of discussion of the $56,000 versus the $66,000 and the manner in which the $10,000 second mortgage would be written up; however, there was no evidence presented to reflect that no commission would be paid on the $10,000 second mortgage as contended by the Petitioner other than the "net sheet" computed by Migone reflecting the commission computed on six percent (6 percent) of $56,000. Further, Respondent Migone testified that Mrs. Perez never discussed paying a commission only on $56,000 versus the $66,000 as was computed and deducted by the Respondents. A review of the documentary evidence indicates that there are no variations of the six percent (6 percent) commission of the total sales price. (TR 66)
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Administrative Complaint against the Respondents, Pedro Realty, Inc., and Donna Migone, be DISMISSED in its entirety. RECOMMENDED this 24th day of January, 1983, 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 24th day of January, 1983.
Findings Of Fact Frederick Hodgdon (Hodgdon) has held Florida real estate broker license 0206805 at all times pertinent to this case. Hodgdon is owner and qualifying broker for Pelican Realty of Marco Island, Inc., (Pelican Realty), through which Hodgdon conducts business and which also is named as a respondent. At all times pertinent, Pelican Realty has held Florida corporate real estate broker license 0223934. July 24 through August 6, 1984, respondents placed the following newspaper advertisement in the Sun-Daze: DO YOU KNOW ... that all Florida real estate brokers are agents for the seller and CANNOT legally propose any lower than listed prices or better terms for the benefit of the buyer? UNLESS ... the broker legally qualifies himself as an agent for the buyer. As a Buyer's Broker Pelican Realty CAN and DOES exactly this and a lot more! Buyers pay no fees or commissions. Call or send for our informative brochure, you will be glad you did. The real estate buyer's best bet for the best price is to have a Buyer's Broker. On February 19, 1986, respondents placed the following newspaper advertisement in the Marco Island Eagle: 1/ BUYER BEWARE! DON'T BUY REAL ESTATE ON MARCO ISLAND. ... before consulting an attorney or carefully reading Paragraph 5) and 7) of the 1985 Revision of the Sales Contract as approved by the Naples Area Board of Realtors and the Marco Island Area Board of Realtors and the Collier County Bar Association contract Revision Committee. The Contract states quote: "The Buyer has inspected the property sold by the Contract and there are no other inspections permitted or required. The property is acceptable in its AS IS condition as of date of this offer. INCREDIBLE! ... What happens to the unwitting Buyer who intends to have termite, structural and seawall inspections AFTER his offer is accepted? He just may have to buy a termite ridden house that needs a new roof and a seawall that is on the verge of collapse. Thats what! ... Taken at face value the Sales contract calls for the buyer to spend several hundred dollars for inspections BEFORE making an offer that may well be turned down. INCREDIBLE! .... Paragraph 7) states quote: "Buyer's decision to buy was based on Buyer's own investigation of the property and not upon any representation, warranty, statement or conduct of the Seller, or broker, or any of Seller's or broker's agents" (Excluding those rare occasions when the seller and his agents remain silent.) INCREDIBLE! ... The above subject sections of Paragraphs 5) and 7) of the 1985 Sales Contract in our opinion may well violate the Realtor's Code of Ethics Article 7) "to treat fairly all parties to the transaction." There is nothing Pelican Realty could say or do to better emphasize the Buyer's need to have an advocate on his side. ... As a Buyer's Broker we recommend striking out any and all terms and conditions of the Sales Contract that are prejudicial to the Buyer's best interests. ... Pelican Realty would appreciate the opportunity to discuss with any interested parties the many advantages of working with a Buyer Broker. Our services are at NO additional expense to the buyer. CALL US FOR FURTHER DETAILS. NOW!! On March 11, 1986, respondents placed the following newspaper advertisement in the Sun-News: CASH BACK FOR THE REAL ESTATE BUYER. THAT'S INCREDIBLE! Pelican Realty GUARANTEES CASH BACK to every buyer on every sale. The bigger the sale, the bigger the cash gift to the buyer. On top of this Pelican Realty (a Buyer's Broker) goes all out to get the lowest possible price for the buyer at NO additional cost to the buyer. Other realtors must get the highest price for the seller. The thousands you SAVE already belong to you. THINK ABOUT IT! Call us for further details NOW! "WE PAY OUR BUYERS TO DO BUSINESS WITH US" There is nothing false or fraudulent about the three advertisements. However, the following statements in the advertisements are deceptive or misleading in form or content: The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that buyers pay no fees or commissions. In form, the buyer perhaps does not pay brokerage fees or commissions. But in substance, the buyer does indirectly pay his broker a brokerage fee or commission when the seller pays fees and commissions out of the proceeds of the sale. The representation in the July 24 through August 6, 1984, Sun-Daze advertisement that a buyer's broker "legally qualifies himself as an agent for the buyer." Although perhaps technically correct, this representation implies separate state regulation and qualification procedures for licensure as a buyer's broker. In fact and in law, any licensed real estate broker can become a buyer's broker simply by entering into an agreement with a buyer to be the buyer's broker. The representation in the March 11, 1986, News-Sun advertisement: "Other realtors must get the highest price for the seller." Read carefully in context, this representation is true--realtors other than those representing a buyer must try to get the highest price for the seller he represents (while being open, honest and fair to the buyer). But, as written, the representation could lead one to believe that the respondents have an ability no other realtors have when, in fact and in law, any realtor or other licensed real estate broker who represents a buyer can try to get the best price for the buyer. Although respondents have offered cash rebates, no client has seen the offer or asked for a rebate. Although respondents have maintained their innocence, they changed the ads to meet the criticism of the Department of Professional Regulation.
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 (1) reprimanding respondents, Frederick Hodgdon and Pelican Realty of Marco Island, Inc., and (2) fining them $500 each for violations of Section 475.25(1)(c), Florida Statutes (1985). RECOMMENDED this 21st day of July, 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 21st day of July, 1987.
Findings Of Fact Prestige Realty, Inc. and Anthony C. Cappello were at all times here relevant registered with the FREC as alleged. Mrs. Cappello, wife of Respondent, is a salesperson with Prestige Realty, Inc. Prestige Realty, Inc. is an Electronics Realty Associates (ERA) franchisee and actively promotes the ERA Homeowners warranty Plan which will, for a fee, warrant to pay for repairs to structure and equipment within the first year of purchase all costs over the minimum for which the policy is written. While showing prospective purchasers William and Dora Keys various properties, Mrs. Cappello told them about the ERA Buyers Protection Plan (BPP) and the Keys expressed an interest in having same, particularly if the seller would pay for it. Mrs.. Cappello has worked with the Keys for several months showing them various properties for sale. Thomas Hanrahan listed his home for sale with B & M Real Estate as listing agent at a price of $52,000 on 31 January 1977. On April 28, 1977 Mrs. Cappello obtained an offer from William and Dora Keys to purchase Hanrahan's house for $49,000. Keys had inherited some money, and after seeing the Hanrahan house which they liked, made an offer to purchase the property for $49,000 including the drapes and BPP. Inclusion of the BPP in the offer was suggested by Respondent Cappello and/or Mrs. Cappello. The fact that an offer had been received was communicated to the listing salesperson and the listing agent met the Cappellos to present the offer to Hanrahan. Respondent Cappello, who had accompanied his wife to present the offer, first discussed the contract conditions, including drapes and BPP, before revealing the offering price to Hanrahan and the listing broker's agent. When Respondent revealed the $240 premium for BPP Hanrahan remarked it was a "rip- off"; however, Respondent Cappello emphasized that the seller shouldn't mind paying this premium if the selling price of the home is right. After obtaining Hanrahan's agreement to the BPP "if the price is right', Respondent disclosed the offering price of $49,000. Hanrahan refused this offer and made a counter offer of $51,000, which was communicated to the buyers who re-countered with a $50,000 offer. At no time during these negotiations did Respondents advise Hanrahan that Prestige Realty would receive 25 percent of the premium the contract provided the seller would pay for the ERA BPP. Of the $240 premium paid for the BPP, $C0 was retained by Respondent, Prestige Realty, and the remaining $180 was forwarded to ERA. When the offer of $50,000 was presented to Hanrahan by Respondent Cappello, it was represented to be the buyers' final offer, that the ERA BPP was an essential element of the offer, and if not accepted by the seller they would find the buyers another house. The Keys never insisted to Cappello that the BPP be included in their offer, and both William and Dora Keys testified they would have paid $50,000 for the Hanrahan home without the BPP. Attempts by Hanrahan to share the cost of BPP with the buyers or discourage their insistence upon having this policy provided were rebuffed by Respondents. Following the closing the Keys were offered the option of taking a lower deductible on the BPP than $100, but after being advised the additional cost to them for a lower deductible, it was declined. Respondents and other ERA franchisees consider the BPP to be a good selling tool in the conduct of their business. In addition to the BPP, ERA offers a sellers protection plan which, if the seller lists his house with an ERA franchisee and agrees to pay for a BPP when the house is sold, will insure the seller from failure of certain equipment (less a deductible) during the period the house is listed before sale.
