The Issue Whether the Respondent violated Subsection 475.25(1)(b), Florida Statutes, by failing to reconcile his accounts, having monies stolen from him by an employee, and withdrawing money from his escrow account as commissions. Whether the Respondent violated Subsection 475.25(1)(k), Florida Statutes, by failing to maintain funds paid to him as deposits for rentals, sales taxes, and security deposits in his escrow account until after the date of the rental.
Findings Of Fact The Respondent is a licensed real estate broker and was so licensed at all times relevant to the events which are a part of the Administrative Complaint. The Respondent holds license number 0177110 issued as a broker, t/a Sunspot Realty, 16428 West Highway 98A, Panama City, Florida 32407. On February 10, 1989, Elaine Brantley, an investigator for the Department of Professional Regulation, visited the Respondent's office for the purpose of conducting a financial audit of the records of the business. The Respondent was not present; and Teresa Tuno, the Respondent's secretary and wife, stated she would prefer that Brantley not review the records in her husband's absence. On February 14, 1989, Brantley telephoned the Respondent and made arrangements to audit Respondent's books on February 15, 1989. A review of the records by Brantley on February 15, 1989 revealed that the records were in a state of disarray and the ledgers were not posted. At that time, Brantley advised the Respondent that the records had to be put in order, the ledgers posted, and accounts reconciled by February 17, 1989, when she would reinspect the records. Brantley reinspected the records on February 17, 1989, and all the ledgers had been posted and the accounts had been reconciled through January. The audit revealed that Tuno had received $47,961.45 in security deposits, sales taxes, and rental deposits which were not refundable under the lease agreement. The audit revealed that the balance of the Respondent's escrow account was $33,321.45. The difference between the balance of the escrow account and the money received by the Respondent includes $8,000 which the Respondent paid to himself with checks drawn on the account for "commissions", and $6,540 which had been stolen by an employee of the Respondent. The monies stolen included cash deposits paid by rental customers to the employee and one check on the escrow account endorsed in blank and given to the employee to pay for items purchased for one of the rental units which the employee cashed and converted to his own use. The theft was reported to the local police and their investigation revealed that the employee had disappeared under suspicious circumstances, indicating foul play. The lease agreement states that a deposit of 50% of the rental rate was required to reserve a property and the deposit was refundable only if another tenant could be found for the same period. The Respondent's agreement with the owner of the property called for a commission of 30% of the rental receipts. However, there was no mention of when the commission was earned and under what circumstances it would be paid in the original rental agreement. Upon being criticized for this practice by Brantley, the Respondent repaid the total amount of the draws. Subsequently, he had a new agreement drawn purporting to authorize early payment of management fees. The new agreement states in pertinent part: Owner agrees to compensate Agent a commission of 30% of rental receipts with the exception of long term winter rentals which will be at a rate of 20%. Agent is authorized to draw management fees upon receipt of tenant's non-refundable reservation deposit. The balance of the escrow account was sufficient to meet any potential demands against it. Had the property been leased to another renter for the same period of time, the second renter's deposit would have been deposited to the account making up the funds refunded to the first renter. The audit also revealed that the Respondent had paid monies from the escrow account to a maintenance company operated by the Respondent for work performed on various of the properties. However, the Respondent had not debited the individual property accounts at the time the check was drawn. Each of the properties had a sufficient individual balance to pay for work charged against the property. The appropriate entries were made eventually in the ledgers for the property by the Respondent. The Respondent has amended his agreement with property owners to permit him to bill for repairs on their property on a cost-plus-10% basis to eliminate this problem. None of the actions by the Respondent resulted in financial loss to any of his clients, and the Respondent was cooperative and candid with the auditor.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent: Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing commissions to himself; Be required to pay an administrative fine of $1,000 for violation of Section 475.25(1)(k), Florida Statutes, by distributing payments to a maintenance company which he owned without debiting individual property accounts; and Be required to enroll and satisfactorily complete a course on maintenance of escrow funds and accounts. DONE AND ORDERED this 6th day of December, 1989, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 6th day of December, 1989. APPENDIX A TO RECOMMENDED ORDER, CASE NO. 89-2681 The Respondent filed a letter in place of proposed findings which contained legal argument which was read and considered. It did not contain any findings. The Petitioner filed proposed findings which were read and considered as follows: Paragraphs 1-3 Adopted Paragraph 4, 1st sentence Adopted Paragraph 4, 2nd sentence Rejected as irrelevant Paragraphs 5-7 Adopted Paragraphs 8-10 Rejected. The terms of the contracts do not address when Tuno was entitled to his commission. Under the terms of the contracts the renters were not entitled to a refund of their advance deposit after a reservation was made unless a new renter could be found for the same time, in which case that renter would have to make a deposit. When Tuno was entitled to his commission was not addressed in the contracts. While findings that Tuno violated the provisions of statute relating to maintenance of funds in his escrow account; this failure was based upon the lack of clarity in the contracts and the high standard of conduct in maintaining escrow accounts which is required of licensees. COPIES FURNISHED: Ms. Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32801 Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Steven W. Johnson, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street P. 0. Box 1900 Orlando, Florida 32802 Mr. Robert P. Tuno 16428 West Highway 98A Panama City, Florida 32407
Findings Of Fact Ann Doris Richman is a licensed real estate salesman holding license number 0073487. She was employed by Parman Florida, Inc., and her qualifying broker was John P. Schlicher. On April 20, 1985, Ms. Richman obtained a $1,000. deposit check and a written offer from James A. Angleton, Jr., to purchase condominium unit number 503 at the Charter Club Condominium, 600 Northeast 36th Street, Miami, Florida, at a price of $70,000.00. The offer stated that the transaction was to close within 180 days from receipt of an abstract or, at the purchaser's option, sooner if it was possible to do so. Mr. Angleton was to assume the existing mortgage. The brokerage fee for the transaction was to be $4,200.00. Mr. Angleton informed Ms. Richman that the $1,000.00 check which accompanied his Condominium Deposit Receipt Contract was not good, and would be replaced if the owners of the condominium unit accepted his offer. The owners of the condominium unit resided in Costa Rica and were not readily accessible to Ms. Richman. The $1,000.00 check was brought to the attention of Ms. Richman's broker, Mr. Schlicher, but was not deposited because Ms. Richman had been told that it was not good. The check was kept in the file with the contract. Toward the end of May, 1985, the owners of the apartment came to the Parman office in Miami and were shown the Angleton purchase offer, but the owners would not sell for the $70,000.00 Angleton offered, because it would not have covered the mortgage and the brokerage fee. They made certain handwritten changes to the contract, i.e., that the sales price would be $77,500.00, that the purchaser would deposit an additional $2,000.00 upon execution of the contract, and that the closing date was to be October 1, but sooner if possible. The brokerage fee was reduced to $3,000.00 Ms. Richman then called Mr. Angleton to tell him that the sellers had rejected his offer and made a counter-offer. Mr. Angleton did not come into the office of Parman Florida, Inc. until late June 1985. He initialed the changes the sellers had made on the contract and replaced the original $1,000.00 check with another check, which promptly was deposited. Ms. Richman changed the date at the foot of the contract when the replacement check was received from April 5, 1985 (the date Angleton's original offer had been made and the first $1,000.00 check had been given), to June 24, 1985, the date Angleton accepted the changes made in the contract by the sellers and made the new $1,000.00 deposit. Although the counter-offer included the additional requirement, which the sellers had interlineated by hand and Angleton had initiated, that an additional $2,000.00 deposit would be made upon the execution of the contract, Angleton made no additional $2,000.00 deposit then or at any other time. Ms. Richman never told the sellers the additional $2,000.00 deposit was not received. Angleton has stated various times when he claims to have made the $2,000.00 additional cash deposit the sales contract called for. He has said the cash was provided several days after June 24, 1985 (Tr. 41), and in late May 1985 (Tr. 43). Mr. Angleton and his lawyer, a Mr. Tryson, attempted, in December 1985, to secure the return of the $2,000.00 cash Angleton claims to have given Ms. Richman. In Tryson's letter of December 26, 1985, to Ms. Richman, Tryson stated that the $2,000.00 cash had been given after September 20, 1985. See Finding of Fact 9, post. Mr. Angleton is not only very confused as to the time the deposit was supposed to have been made, but he is wrong on the issue whether he gave a $2,000.00 cash deposit to Ms. Richman. No such thing happened. Ultimately, the sale was cancelled by the sellers because the closing did not take place within the time required by the contract. Mr. Angleton took the position, through his attorney, that the sellers had failed to deliver evidence of good title on a timely basis. The sellers made no claim to the $1,000.00 deposit, and Angleton's lawyer demanded from Ms. Richman on December 26, 1985, the return of the $3,000.00 deposit which Angleton claimed to have made. Angleton received a refund of $1,000.00, the amount of the check which was given on June 24, 1985, and had been deposited by Parman Florida, Inc.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED THAT: As to Count One, Respondent be found guilty of culpable negligence, reprimanded and fined $250.00, and As to Count Two, that count of the Administrative Complaint should be dismissed. DONE AND ORDERED this 24th day of March, 1987, in Tallahassee, Florida. WILLIAM R. DORSEY, JR 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 24th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3284 The following constitute my specific rulings pursuant to Section 120.59(2), Florida Statutes (1985), on the proposed findings of fact submitted by the parties. Rulings on Proposed Findings of Fact Submitted by Petitioner Covered in Finding of Fact 1. Rejected as unnecessary. Covered in Finding of Fact 2. Covered in Finding of Fact 5. Rejected as unnecessary. Rejected as irrelevant to this matter. Covered in Finding of Fact 6. Rejected as subordinate to the findings made in Findings of Fact 6. Generally covered in Finding of Fact 7, but the date the counteroffer was acceptable was June 24, 1985, not June 25, 1985. Covered in Finding of Fact 7. Covered in Finding of Fact 8. Rejected because no $2,000.00 additional deposit was made by Mr. Angleton. Covered in Finding of Fact 6, although there was no proof that all $3,000.00 of the sales commission would have gone to Richman. Covered in Finding of Fact 8. Covered in Finding of Fact 10. Rejected as irrelevant. Rulings on Proposed Findings of Fact Submitted by Respondent Rejected as unnecessary. Covered in Finding of Fact 2. Covered in Finding of Fact 5. Sentences 1 and 2 covered in Findings of Fact 3 and 5. The remainder rejected as unnecessary. Sentences 1 and 2 rejected as unnecessary. Sentence 3 adopted in Finding of Fact 10. Rejected as unnecessary. Covered in Finding of Fact 7. Covered in Finding of Fact 8. Rejected as unnecessary. Rejected as recitations of testimony not findings of fact. Rejected as unnecessary. Rejected as unnecessary. Rejected as irrelevant and unnecessary. Rejected as argument, not findings of fact. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Division of Real Estate/DPR 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Allen P. Reed, Esquire 901 Brickell Avenue Miami, Florida 33131 Harold Huff, Executive Director Division of Real Estate/DPR 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Van Poole, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Joe Sole, General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
The Issue Whether Respondent failed to deliver a deposit to the person entitled to said delivery in violation of Section 475.25(1)(c), Florida Statutes. Respondent appeared at the hearing without legal counsel and was advised of his rights to same at his own expense. He elected to represent himself at the hearing. He was further advised as to his rights under the Administrative Procedure Act including the right to testify on his own behalf if he so desired. He indicated his understanding of his rights. It was stipulated by the parties that Joseph Sopotnick, Joseph Sopotnick, Jr., and Joe Sopotnick are one and the same person.
Findings Of Fact At all pertinent times under consideration in these proceedings, Respondent was a registered real estate broker (Stipulation of parties, Exhibit 2) In March 1974, Alvin K. Whittington of Marietta, Georgia, upon the recommendation of his job supervisor, who had dealt with Respondent in the past, called the Respondent on the telephone concerning the possibility of purchasing land in Florida. Although the Respondent indicated that he had none available at that time, he called Whittington later on in the day and told him that he had certain property which was for sale and inquired as to when he could come down to Florida to look it over. Whittington informed him that he did not know when he would be able to visit Florida and Respondent advised him to send a deposit in order to hold the land since there was a contractor interested in the same property. Whittington told him that he did not like the idea of placing a deposit on property that he had not seen and inquired as to whether or not he could secure a return of the deposit if, after he had seen the land he did not wish to purchase it. Respondent told him "That's no problem. You can get your deposit back". He advised him to send the deposit and that he would hold it until he came to Florida. Accordingly, Whittington sent a check for $360.00, dated March 20, 1974, to the Respondent which indicated on its face that it was a "deposit on Fla. shore lots - N.W. corner Needle Palm & 18th". The check was signed by Mrs. Whittington on a joint account with her husband. The sum of $360.00 represented 10 percent of a purchase price of $3600.00. After talking to Whittington, Respondent on March 20 wrote to the owners of the property, advised that a deposit check would be forthcoming and enclosed a standard sales contract for the sellers to execute and return to him. This was accomplished and Respondent then forwarded the contract to the Whittingtons for execution and return which they received on April 1st. Mr. Whittington thereupon called the Respondent and told him that he could not sign the contract without seeing the property. On April 12th, he and his wife went to Florida, met with the Respondent, looked over the lots in question, and informed the Respondent that he would call him the following Monday as to whether or not he wished to make the purchase. On April 15th, Whittington called the Respondent, informed him that he did not wish to purchase the property and requested return of his deposit. Respondent informed him he could not return it and that disposition of the deposit would be a matter to be determined by the seller. Thereafter, on April 19th, Respondent wrote to the Whittingtons informing them that after careful consideration, he intended to treat the matter as a forfeiture of deposit situation, and unless he heard from them to the contrary he would disburse the deposit to the seller under the terms of the contract. However, he stated in the letter that he would apply the full deposit to any purchase that the Whittingtons might thereafter wish to make. After receipt of this letter, Whittington again called the Respondent concerning the situation at which time Respondent informed him that he would try to get 1/3 of the deposit returned if Whittington would send him a letter indicating that he would accept such an amount. Nothing further was heard from the Respondent and the deposit was never refunded (Testimony of Mr. & Mrs. Whittington, Composite Exhibit 1, Exhibits 3, 4). On or about July 2, 1974, Respondent remitted 1/2 of the deposit to sellers and retained 1/2 for himself (Stipulation of parties) Respondent testified that Whittington had insisted he accept the deposit and send the contract to the seller to insure that he would be able to purchase the property, and that the proposed deal was not contingent upon the buyer's satisfaction with the property. He denied telling Whittington he could get his deposit back. He also testified that after the Whittingtons viewed the property in Florida, he asked Whittington about the contract and the latter said that he had not brought it with him but would send it within a few days. That when he thereafter called upon his return to Georgia, he informed Respondent that he did not wish to make the purchase because his wife was about to have a baby. Respondent contended at the hearing that he was never sure that Whittington wanted his deposit back, however, conceded that Composite Exhibit 1f was his letter to the sellers advising that the Whittingtons had requested the return of the deposit. Respondent asserted that it was his impression that if a deposit had been made in good faith, it was proper to consider that there was a binding contract even though the depositor had not signed a sales contract. He further indicated that if he was wrong in this respect he would return the deposit. At no time did the Respondent ever discuss the transaction with the sellers. He was unaware of the provisions of Section 475.25(1)(c), by which a registrant may seek advice from the real estate commission if he entertains, in good faith, doubt concerning his duty to account and deliver a deposit. Respondent has been in the real estate business for twelve years (Testimony of Respondent, Composite Exhibit 1f).
Recommendation That Respondent's registration as a real estate broker be suspended for a period of 60 days. That the period of suspension in excess of 30 days be vacated if the Respondent returns the $350.00 deposit to Mr. & Mrs. Alvin K. Whittington prior to the expiration of the aforesaid period of 30 days from the original date of suspension. DONE and ENTERED this 20th day of February, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue The issue is whether Respondents' real estate licenses should be disciplined on the ground that Respondents allegedly violated a rule and various provisions within Chapter 475, Florida Statutes, as charged in the Administrative Complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: When the events herein occurred, Respondents, Edward D. Armbruster and Colleen Michele Armbruster, were licensed real estate brokers having been issued license numbers 0002159 and 0362890, respectively, by Petitioner, Department of Business and Professional Regulation, Division of Real Estate (Division). Respondents served as qualifying brokers and officers of Respondent, Armbruster Realty, Inc., a corporation registered as a real estate broker and located at 1031 West Nelson Avenue, DeFuniak Springs, Florida. The corporation holds license number 0211855, also issued by the Division. On July 10, 1996, Gerald and Joyce Singleton, who had just relocated to California, entered into a contract with James B. and Joyce Patten to sell their single-family residence located on Madison Street in the City of Freeport, Florida, for a price of $78,000.00. The contract called for the Pattens to pay $1,000.00 as an earnest money deposit, to be held in escrow by Respondents. The contract further provided that "[c]losing shall be within 30 days (more or less) after acceptance of this contract," and that "[i]n the event that buyer defaults and deposit is forfeited, it is agreed said deposit shall be divided equally between seller and broker." The transaction was handled by Geraldine Dillon (Dillon), a salesperson in Respondents' office, who is now retired. Because the Pattens had recently moved to Walton County from Washington State, and they were temporarily living with a relative in a mobile home, the time for closing was of the essence. Accordingly, the Pattens inserted into the contract a provision requiring that a closing be held within "30 days (more or less)." This meant that a closing should be held on or about August 10, 1996, give or take a few days. The parties acknowledge that property boundary problems were somewhat common in certain areas of Freeport, including the area where the subject property was located. To satisfy the bank and title company, a surveyor was engaged to prepare a survey of the property. However, the parties agree that the surveyor noted problems with the boundaries of the lot. When a second surveyor would not undertake the survey because of similar boundary problems, Joyce Patten, who was the principal negotiator for the couple, notified Dillon that they did not wish to close because of potential title problems and wanted a refund of their deposit. Notwithstanding this concern, Dillon advised Joyce Patten that a third surveyor would be hired, at the seller's expense, and he could "certify" the property. Although Joyce Patten expressed concern that the bank might not accept a third survey after two earlier ones had failed, and she did not want to pay for another survey, she did not instruct Dillon to stop the process. Accordingly, Dillon engaged the services of Tommy Jenkins, a local surveyor, to perform another survey. After a certified survey was obtained by Jenkins on August 12, 1996, which Respondents represent without contradiction satisfied the lender and title company, a closing was scheduled within the next few days. This closing date generally conformed to the requirement that a closing be held by August 10, 1996, "more or less." The seller, who by now had relocated to California, flew to Florida for the closing, and the title company prepared a closing statement and package. Just before the closing, however, Respondents learned through a representative of the title company that the Pattens were "cancelling the closing," apparently in violation of the contract. Shortly after the aborted closing, Joyce Patten requested that Dillon return their deposit. By this time, the Pattens had already entered into a second contract to buy another home in the same area and closed on that property before the end of August. Respondents were never informed of this fact by the Pattens. On August 21, 1996, Colleen Armbruster prepared a rather lengthy letter to the Pattens (with a copy to the sellers) in which she acknowledged that they had orally requested from Dillon that their escrow deposit be returned. The letter has been received in evidence as Petitioner's Exhibit 4. Armbruster stated that she was "perplexed" that they were demanding a refund of their earnest money deposit, given the fact that the seller had "met the terms and conditions of the sale." Armbruster outlined the three reasons in the contract which would allow the Pattens to withdraw without forfeiting their deposit, but noted that none were applicable here. Accordingly, she advised them that the seller would be consulted as to his wishes regarding the deposit, and that the Pattens should contact her if they had any questions. Through oversight, however, she did not include a notice to the Pattens that they must respond to her letter within a stated period of time reaffirming their demand for the trust funds, or the deposit thereafter would be disbursed pursuant to the contract. By failing to include this specific language, and sending the letter by regular rather than certified mail, return receipt requested, Respondents committed a technical, albeit minor, violation of an agency rule. Even so, the Pattens acknowledged receiving the letter, and there is no reason to believe that they did not understand its import, especially the requirement that they contact the broker if they disagreed with the proposed disbursement of the money. It can be reasonably inferred that the Pattens did not respond because they "figured [they weren't] going to be able to get [their] money back" due to their failure to perform. On September 13, 1996, the seller's attorney advised the Pattens by letter that the seller considered the deposit forfeited pursuant to paragraph 15(a) of the contract, which pertains to the "Default" provisions. The Pattens never responded to either letter, and they also failed to respond to telephone calls made by Respondents or their agents regarding this matter. In view of the Pattens' lack of response or reaffirmance of their demand, and the fact that they had already closed on another property, Respondents logically and fairly assumed that the Pattens were in agreement with the disbursement procedures outlined in Coleen Armbruster's letter of August 21. Accordingly, on September 17, 1996, Edward Armbruster, who had not been involved in this transaction to date, in good faith signed two disbursement checks giving $697.50 to the seller and retaining the balance for his firm. This division was consistent with the terms of the contract. In making this disbursement, there was no intent on the part of Respondents to trick, deceive, breach their trust, or in any way unlawfully deprive the Pattens of their deposit. Respondents did not notify the Florida Real Estate Commission (Commission) that they had received conflicting demands for a deposit, nor institute any other procedures regarding the deposit, since they no longer had any good faith doubt as to whom was entitled to their trust funds. This was because the Pattens had failed to respond to letters and telephone calls regarding the sellers' claim to the deposit. There is no evidence that Respondents have ever been the subject of prior disciplinary action during their lengthy tenure as licensees. At the same time, it is noted that Respondents acted in good faith throughout the process and genuinely believed that there was no dispute. It should also be recognized that, for at least part of the time, the Pattens were working two contracts simultaneously without advising the realtors.
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 Respondents guilty of a technical violation of Rule 61J2-10.032(1), Florida Administrative Code, and Section 475.25(1)(e), Florida Statutes, and that they be given a reprimand. All other charges should be dismissed. DONE AND ENTERED this 28th day of July, 1998, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 28th day of July, 1998. COPIES FURNISHED: Henry M. Solares, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Christine M. Ryall, Esquire 400 West Robinson Street Suite N-308 Orlando, Florida 32801-1772 Edward D. Armbruster Colleen M. Armbruster Post Office Box 635 DeFuniak Springs, Florida 32433 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact In early July, 1972, Donald R. and Pamela S. Leininger (buyer) entered into a contract to purchase a residence through Sun Up Realty with its salesman, Bernard Zapel. The real property involved and Sun Up Realty were owned by Defendant, Norman N. Zipkin either as sole proprietor or as sole shareholder of the corporation in whose name the property was held. Disclosure of the role of Defendant as owner-seller was not an issue in these proceedings. Buyer executed two contracts for the purchase of the property both dated July 9, 1972. The first contract acknowledged receipt of $100 as a deposit with a down payment to be made of $1750 with the buyer obtaining a mortgage of $33,250. Noted on this contract are two additional payments of $650 and $1,000. All of these deposits were payable to and deposited in Sun Up Realty's Escrow Account. The second deposit receipt contract was also dated July 9, 1972 and receipt of $1750 was thereon acknowledged by seller. The sale price of $35,000 applied to both contracts. The second contract provided as terms and conditions of sale that the buyer would make an additional deposit of $1700 before closing and that buyer was to apply for, qualify, and obtain a mortgage insured by FHA. Papers to so qualify were sent to the bank but buyer never qualified for the loan. The Administrative Complaint indicates that the first document executed by the buyer provided for an FHA insured mortgage; the evidence presented was as noted above. Apparently to allow buyer additional time to qualify for the loan Defendant leased the premises to buyer pursuant to lease agreement (Exhibit 5). Although Defendant testified buyer paid him nothing while he occupied the house pursuant to this lease agreement, in his deposition (Exhibit 1) buyer presented a receipt for one month's rent paid to the seller for the premises. Buyer never qualified for the mortgage because the lending agency was never satisfied from whence the additional $1700 down payment was to come. Although no evidence was presented on this point it appears that this additional deposit was required for buyer to reach a 10 percent down payment on the price of the residence. The July 9, 1972 deposit receipt contract that was in effect with respect to this transaction provides in pertinent part: "2. An additional sum of seventeen hundred dollars ($1700) shall be deposited with Escrow Agent before closing. In the event such sum is not so deposited, Seller at his option may cancel and terminate this agreement." "3. Buyer to apply for, qualify for, and obtain a Mortgage insured by the FHA Section in an amount not less than $31,550. In the event the Buyer fails to qualify for said mortgage, all said deposit shall be returned immediately, less the cost of the credit report. "14. It is mutually agreed that the trans action shall be closed and the Buyer shall pay the balance of the first payment and execute any and all papers necessary to be executed by him for the completion of this purchase within days from the aforementioned abstract of title, or such time as shall reasonably be required by seller to make such title good, otherwise the herein named Escrow Agent is hereby directed by both Seller and Buyer to divide the monies being held by said Escrow Agent, under the terms under this Contract between the Seller and Broker herein named as hereinafter provided." "It is further agreed that in case of default by the Buyers, the Seller may at his option take legal action at law and/or in equity to enforce this Contract, in which event, the Buyer shall pay reasonable attorney fees and court costs; or else the Seller may at his option retain one half of the deposit herein paid as considera tion for the release of the Buyer by the Seller from any and all further obligations under this Contract to the Seller, which release shall be implied from such act of retention by the Seller." Buyer quit the premises in October, 1972 and thereafter demanded return of his deposit from seller. By letter from buyer's attorney (Exhibit 6) dated March 19, 1973 demand was made for return of the deposit. By letter dated March 23, 1973 (Exhibit 7) Seller denied the refund of the deposit on grounds that the buyer had breached the contract as the Buyer had qualified for and been approved for a mortgage by the Collateral Mortgage Co. The money was withdrawn from the escrow account and paid to the seller. Defendant is an attorney, mortgage broker, general contractor, developer and real estate broker. For the past decade he has devoted most of his energies toward real estate development. This is the first time charges have been preferred against him by the Florida Real Estate Commission.
Findings Of Fact The Respondent, Gaspar Nagymihaly, who does business as Bay Air Apartments, is the holder of license No. 23-12970H-3234, held with the Petitioner, State of Florida, Department of Business Regulation, Division of Hotels and Restaurants. The location of the Bay Air Apartments is 665 N.E. 83rd Terrace, Miami, Florida. At all times pertinent to the notice to show cause, the Respondent has held such license for doing business as Bay Air Apartments. Bonnie Joyner, formerly known as Bonnie Pestcoe, rented an apartment from the Respondent beginning February 11, 1977. The contact that Mrs. Joyner had with the Respondent was through the intermediary M. Infante. Mr. Infante was the manager and agent for the Respondent in the apartment business known as Bay Air Apartments. There was a discussion between Mrs. Joyner and Infante to the effect that the tenant intended to stay in the aforementioned apartment for a period of one year; however, there was no written or verbal agreement which bound the parties to a lease which would last for a period of one year. In effect, the rent was paid on a monthly basis, thereby creating a tenancy of month to month. The amount of monthly rent was $190 and the parties had agreed to a security deposit of $190. Mrs. Joyner lived in the apartment for two months and paid the rent for that two-month period. Evidence of the rent payments for the two months and the security deposit may be found as Petitioner's Exhibits 2, 3, and 4 admitted into evidence. Two weeks before April 11, 1977, Mrs. Joyner contacted Mr. Infante to apprise him of the fact that she intended to vacate the premises. This contact was by an oral communication only. At that time, Infante advised Mrs. Joyner that he could not return the deposit and that he would not tell her who the owner of the apartment was. Mrs. Joyner then vacated the apartment on April 11, 1977, and sent a request to Mr. Nagymihaly for return of her security deposit. She learned of Mr. Nagymihaly's identity through a search of the tax records. The written request for the return of the security deposit is dated April 11, 1977 and is Respondent's Exhibit No. 1 admitted into evidence. Mr. Nagymihaly responded to the request by forwarding a $90.00 check to Mrs. Joyner, dated April 12, 1977. This check indicated that the basis of the return of that portion of the security deposit was premised upon the fact that Mrs. Joyner had a nice personality. A copy of the check may be found as Petitioner's Exhibit No. 5 admitted into evidence. Subsequent to the payment of the $90.00, Nagymihaly wrote a letter of April 14, 1977, addressed to, the then Mrs. Pestcoe in which he stated that the reason for returning only a portion of the security deposit, was due to the failure of Ms. Pestcoe to stay for a year and the necessary cost for preparing the apartment for reinspection, etc. A copy of the letter of April 14, 1977, is Petitioner's Exhibit No. 7 admitted into evidence. In response to a complaint which Mrs. Pestcoe made with the Petitioner, Mr. Nagymihaly wrote a letter of May 3, 1977, reiterating his comments about the necessity for Ms. Pestcoe, now Mrs. Joyner, to live in the apartment for a year and explaining why no certified letter had been sent to Ms. Pestcoe when the Respondent intended to keep the security deposit. The letter of May 3, 1977, may be found as Petitioner's Exhibit No. 7 admitted into evidence. It should be noted that in Petitioner's Exhibit 6, which is the April 14, 1977, letter to Mrs. Pestcoe, the monies are referred to as advance rent and not a security deposit. This is in contrast to the terminology used in the May 3, 1977, letter which referred to the money in controversy as being a security deposit. Moreover, the facts in the case demonstrated that the manger for the Respondent had inappropriately kept the security deposit which Mrs. Joyner had paid. The facts in this case are to be looked at in accordance with the provisions of Section 83.49(3)(a). This provision reads as follows: 83.49(3)(a) Upon the vacating of the premises for termination of the lease, the landlord shall have 15 days to return said security deposit to- gether with interest or in which to give the tenant written notice by certified mail to the tenant's last known mailing address of his in- tention to impose a claim thereon. The notice shall contain a statement in substantially the following form: This is a notice of my intention to impose a claim for damages in the amount of upon your security deposit. It is sent to you as required by s. 83.49(3), Florida Statutes. You are hereby notified that you must object in writing to this deduction from your security deposit within 15 days from the time you receive this notice or I will be authorized to deduct my claim from your security deposit. Your objection must be sent to (landlord's address). . . If the landlord fails to give the required notice within the 15-day period, he forfeits his right to impose a claim upon the security deposit. If this section were read without reference to any other provision within Chapter 83, Florida Statutes, it would appear that the Respondent, Mr. Nagymihaly has illegally retained a portion of Mrs. Joyner's security deposit. However, to truly understand the Respondent's obligation in this instance, it is necessary to look to the language of Section 83.49(5), Florida Statutes, which reads as follows: (5) Except when otherwise provided by the terms of a written lease, any tenant who vacates or aban- dons the premises prior to the expiration of the terms specified in the written lease, or any tenant who vacates or abandons premises which are subject of a tenancy from week to week, month to month, quarter to quarter, or year to year, shall give at least 7 days' notice by certified mail to the landlord prior to vacating or abandoning the the premises. Failure to give such notice shall relieve the landlord of the notice requirement of subsection (3)(a). The facts establish that Mrs. Joyner, then Mrs. Pestcoe, failed to make seven days' written notice by certified mail of her vacation and abandonment of the premises, thereby relieving Mr. Nagymihaly of any responsibility to give a written notice of the intent to claim damages against the security deposit and written notice of the rights of the tenant to object in writing to the deduction of the security deposit within 15 days of the receipt of the notice. Notwithstanding the lack of requirement on the part of the Respondent to notify Mrs. Joyner of his intent to claim against the security deposit, he did make such a notification by his comments to her in person on April 11 and by his letter of April 14 to Mrs. Joyner. She in turn made her objection known to the Petitioner. This action taken by Mrs. Joyner and the Respondent to protect their interests has set the stage for possible court action by either of the individuals in a civil proceeding. The sequence of events has not shown that there has been any violation of Section 83.49(3)(a), Florida Statutes, because the Respondent is contesting the return of the security deposit as he is entitled to do and he has been relieved of any necessity for written notice of his intention as required by that provision of the law, because Mrs. Joyner's failure to give 7 days notice by certified mail of her vacation or abandonment of the premises as required by Section 83.49(5), Florida Statutes, removed any obligation of Respondent to give such written notice. Therefore, there is no violation of Section 83.49, Florida Statutes, and there can be no penalties imposed under Section 509.261, Florida Statutes.
Recommendation It is recommended that the action taken under the notice to show cause against the Respondent, Gaspar Nagymihaly, be dismissed. DONE and ENTERED this 11th day of April, 1978, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Lawrence D. Winson, Esquire Department of Business Regulation Johns Building 725 South Bronough Street Tallahassee, Florida 32304 Theresa N. Walsh-Hubbart, Esquire 3115 Brickell Avenue Miami, Florida 33129
Findings Of Fact A notice to show cause why the Petitioner should not have a civil penalty assessed against it or the license be suspended or revoked, together with a notice of right to hearing was sent to Petitioner by certified mail. A formal administrative hearing was requested by Petitioner. Respondent contends that petitioner violated Section 83.49, Florida Statutes, by failure to give notice to a tenant of the disposition of her security deposit and later of the claim against it within 15 days. Petitioner contends it received no security deposit and therefore no notice was necessary. On or about August 18, 1977, Hizi Malka, president of the Petitioner corporation, entered into an oral agreement with Denise Lombardo to rent to Lombardo an apartment owned by Petitioner corporation. There had been discussions about the rental of an apartment between Mr. Malka and Lombardo prior to the date of August 18, and Lombardo had moved some of her possessions into the apartment. Mr. Malka presented an unexecuted lease agreement to Lombardo at the time of the oral agreement to rent with a request that it be executed. Lombardo paid a sum of $200 by check for which she was presented a receipt reflecting a billing of $300 and a payment of $200. She was then given a key to the apartment and took the unexecuted lease with her. Lombardo moved into an apartment of Petitioner and resided there until sometime in December of 1977. Received into evidence was a receipt dated 8/18 reflecting a billing of $300, $200 paid and $100 due; a receipt dated 9/2/77 denoting $150 paid; a receipt dated 10/4/77 denoting $150 paid; a receipt dated 10/30/77 reflecting a billing of $150, $100 paid and a balance due of $50. Also received into evidence was a letter from Petitioner's attorney to Denise Lombardo dated January 11, 1978. Also entered into evidence was the unexecuted lease agreement in which the proposed terms were that the monthly rental for the subject apartment would be $150 a month, payable in advance the first of each month with an advance rental payment of $150 and a security payment of $150. The proposed lease was dated September 1, 1977, to September 30, 1977 for the advance rental payment, but the lease itself was to have run for a term of 12 months beginning on the 18th of August, 1977 and ending on the 17th day of August, 1978. It is uncertain from the testimony at the hearing the exact date when Lombardo vacated the premises although she informed the Petitioner that she intended to vacate the premises at the end of November, 1977. Lombardo surrendered the keys to the premises sometime during the month of December, 1977. Lombardo was unable to state exactly when she surrendered the keys to Mr. Melka, but he stated that she delivered the keys on December 31, 1977. The Petitioner, through an attorney, Myron B. Berman, by letter dated January 11, 1977, made a demand upon Lombardo to pay an additional sum of money in the amount of seventy five ($75) dollars for rent of the premises rented from the Petitioner corporation and stated that a security deposit in the amount of $150 was applied to the arrearages. There had been no mention of a security deposit on any of the billing statements given to Lombardo. Lombardo paid the total sum of $600 to the Petitioner from August, 1977 to the time the premises were vacated in December, 1977. There was no substantiating evidence of any other payments made although Lombardo said she made additional payments in cash and the Respondent denied receiving any such payments. The premises were used by Lombardo for storage purposes during the first part of August before she moved into the premises and paid the original $200 payment. The Hearing Officer further finds: the receipts presented show that monies were paid but there is no showing that a security deposit was demanded or paid. All the monies paid by the witness to the Petitioner were assigned to the payment of rent, which at the rate of $150 per month would be the amount of the agreed rental payments for the period from the first of August to the end of November or the middle of August to the middle of December. The premises were not used for living by the witness until August 18, 1977, but the premises were not vacated and the keys returned to the Petitioner until sometime in December, 1977. The proposed lease agreement was not executed and therefore the findings of fact relative to the renting of the premises by the witness from the Petitioner is largely dependent upon the evidence and testimony received at the hearing. The letter from the Petitioner's attorney erroneously concluded that the witness had paid a security deposit which could be applied to arrearages in rent. The proposed recommended orders of the parties were considered in the findings and conclusions of law in this order.
Recommendation Dismiss the complaint. DONE AND ENTERED this 25th day of August, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Francis Bayley, Esquire Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32304 Myron B. Berman, Esquire Post Office Box 1113 North Miami Beach, Florida 33160
Findings Of Fact Respondent met Sibley Dennis Carpenter, Jr. (Carpenter) in 1974 or 1975, in connection with a land sale that is not otherwise relevant to this matter. In the summer of 1975, Carpenter asked respondent for assistance in obtaining financing for another, separate land transaction. On that occasion, Carpenter furnished respondent an unaudited, personal financial statement, prepared by an accounting firm, which put the net worth of Carpenter and his wife at slightly less than a half million dollars. On November 19, 1975, respondent became affiliated with Dennis Carpenter Realty, Inc., as a real estate salesman. Because he had other irons in the fire, he only appeared at the office of Dennis Carpenter Realty, Inc., once every month or two. Not until the spring of the following year, after he had been licensed as a real estate broker, did respondent have access to the company's books. In November of 1975, respondent met one Charles W. Van Cura, a hog farmer from Minnesota who expressed an interest in buying land in Florida, and referred Mr. Van Cura to Carpenter. Carpenter, possibly in the company of respondent, showed Mr. Van Cura certain real property belonging to Harvey H. Westphal and Margaret Westphal. Mr. Van Cura made an offer of one hundred fifteen thousand dollars ($115,000.00) for the property and deposited seven thousand five hundred dollars ($7,500.00) with Carpenter towards the purchase price, as evidenced by a binder receipt and deposit, dated December 31, 1975, and signed by Carpenter. Respondent's exhibit No. 1. Carpenter presented the offer to the Westphals, who refused Mr. Van Cura's offer but made a counteroffer of one hundred thirty-five thousand dollars ($135,000.00), by crossing out Mr. Van Cura's figures, substituting their own and signing their names. Both the offer and the counteroffer were "subject to receiving Federal Land Bank Loan of 70 percent of purchase price . . ." Van Cura told Carpenter he was unwilling to accept the Westphals' counteroffer. Carpenter persuaded respondent to buy the property himself, and, on January 6, 1976, Carpenter, respondent and Van Cura met in respondent's office. After some discussion, respondent drew two checks aggregating seventy- five hundred dollars ($7,500.00) to Van Cura's order. Petitioner's composite exhibit No. 6. Van Cura executed a receipt, respondent's exhibit No. 2, reciting that he had received seventy-five hundred dollars ($7,500.00) from respondent. At the time of this transaction, Carpenter could not have refunded Van Cura's deposit from the escrow account of Dennis Carpenter Realty, Inc., because there were insufficient funds in the account. Unbeknownst to respondent, Carpenter had never deposited Van Cura's money in the escrow account. On January 30, 1976, Carpenter drew up a written offer on behalf of respondent to purchase the Westphal property for one hundred thirty-five thousand dollars ($135,000.00). Petitioner's exhibit No. 1. The binder receipt and deposit recited that respondent "and or assigns" had deposited seventy-five hundred dollars ($7,500.00) with Carpenter in earnest money. Although the Westphals accepted this offer, the transaction never closed, for reasons which were not developed in the evidence. The Westphals never made demand for the seventy-five hundred dollar ($7,500.00) deposit, and respondent never got the money back from Carpenter. Respondent has since decided to "treat it . . . as a loan, or write it off." (R119) At no time did respondent relate to the Westphals the history of the earnest money deposit. In May of 1976, respondent was licensed as a real estate broker, and became secretary-treasurer of Dennis Carpenter Realty, Inc. Respondent and Carpenter agreed between themselves that the corporation should open an escrow account on which each could draw individually. This is reflected by a corporate resolution, dated May 4, 1976. Respondent's exhibit No. 7. Such an account was opened. When the first bank statement revealed to respondent that Carpenter had drawn improper checks against the escrow account, however, a second corporate resolution was drafted, dated July 23, 1976, respondent's exhibit No. 9, which authorized respondent, but not Carpenter, to draw against the escrow account.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the administrative complaint be dismissed. DONE and ENTERED this 15th day of September, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. Bruce I. Kamelhair, Esquire 2699 Lee Road Winter Park, Florida 32789 Mr. W. O. Birchfield, Esquire 3000 Independent Square Jacksonville, Florida 32201
The Issue Whether Respondent, Nicholas Anthony Musashe (Respondent Musashe), is guilty of failure to account or deliver funds and failure to follow procedures as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether Respondent Musashe is guilty of failure to provide written notification to the Florida Real Estate Commission (FREC) within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether Respondent Musashe is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003). Whether Respondent, The Jander Group, Inc. (Jander Group), is guilty of failure to account or deliver funds and failure to follow procedures, as required by Subsection 475.25(1)(d)1., Florida Statutes (2003). Whether the Jander Group is guilty of failure to provide written notification to the FREC within 15 days of the last party's demand as required by Florida Administrative Code Rule 61J2-10.032(1)(a). Whether the Jander Group is guilty of culpable negligence or breach of trust in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2003).
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to investigate administrative complaints pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes (2003), and the rules promulgated thereunder. Respondent Musashe is, and has been at all times material, a licensed real estate broker, having been issued license no. 265400 and license no. 3010224. He is the owner of the Jander Group, which is also a licensed real estate broker, and its business address is located at 1440 Howell Branch Road, Winter Park, Florida 32789. At all times material hereto, Respondent Musashe was licensed and operating as the qualifying broker for the Jander Group. The Jander Group manages rental property exclusively and is not involved in the sale of real estate. Respondent Musashe has been managing rental properties in Florida since 1990. He, through his company, the Jander Group, manages about 500 properties. He enters into contracts with property owners to provide property management services. He meets with the property owners to advise them on improvements to accommodate rentals. He advertises vacant properties; interviews prospective residents; shows properties; takes applications; screens applicants; and, upon ascertaining that the applicant meets the minimum standards, enters into lease agreements with tenants. He also performs the day-to-day functions of collecting rent, accounting, paying bills, accounting to the owner, and paying the owner the rental proceeds. He keeps a percentage of the rent for his services. From time to time, in the property management business, a dispute develops between a tenant and a property owner. This can involve a deposit by a prospective tenant or a security deposit pursuant to a lease. In the early 1990's, the Legislature amended Chapter 83, Florida Statutes (2003), the "Florida Residential Landlord and Tenant Act" (Landlord-Tenant Act). Among other changes, it relieved licensed real estate brokers from the requirements of reporting escrow disputes and instituting settlement procedures as outlined in Subsection 475.25(1)(d), Florida Statutes (2003), when there were deposit disputes between residential landlords and tenants. Thereafter, and until late 2001, the FREC's position on rental property deposit disputes was that such disputes were addressed by the Landlord-Tenant Act and not subject to the provisions of Chapter 475, Florida Statutes (2003). This applied to disputes over security deposits, as well as disputes over deposits by prospective tenants. In late 2001, without notice to brokers and associates or rulemaking, the FREC changed its legal interpretation of Subsections 475.25(1)(d) and 83.49(3)(d), Florida Statutes (2003), with respect to disputes over pre-lease deposits on rental property. In this case and at least one other case, administrative complaints were filed against brokers who, faced with a dispute between a prospective tenant and a property owner, failed to give the FREC notice of the dispute and requested one of the settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). In the early to mid-1990s, in his business of managing rental properties, when confronted with disputes between prospective tenants and property owners, Respondent Musashe routinely sent notice to the FREC and requested an escrow disbursement order (EDO) to assist in determining how to settle the dispute in accordance with Subsection 475.25(1)(d), Florida Statutes (2003). The FREC responded that disputes involving rental properties were to be resolved in accordance with the Landlord-Tenant Act and did not issue an EDO. James Mitchell was the legal advisor to the FREC for several years while in the Attorney General's (AG) office in the 1990s; and since that time, is the author of continuing education materials which are approved by the FREC. In his materials, he instructs real estate brokers that disputes involving any type of rental deposits should be handled pursuant to the Landlord-Tenant Act, and not in accordance with the notice and settlement procedures set forth in Subsection 475.25(1)(d), Florida Statutes (2003). Mitchell is not familiar with the particular facts or documents at issue in this case. He did not give an opinion as to whether or not the facts of the present case created a landlord and tenant relationship between Respondents and Tiffnye Castro. During his tenure with the AG's office, Mitchell applied Chapter 83, Florida Statutes (2003), to escrow dispute issues in a manner consistent with the statutes' definition of "tenant" and "rental agreement." Section 83.49, Florida Statutes (2003), applies "whenever money is deposited or advanced by a tenant on a rental agreement or as advanced rent for other than the next immediate rental period." Chapter 83, Florida Statutes (2003), defines, "tenant" as "any person entitled to occupy a dwelling under a rental agreement." On May 10, 2002, Castro signed a rental application with the Jander Group to rent a duplex at 12034 Waldenwoods in Orlando. She gave the Jander Group a check for $25.00 as an application fee and $585.00 as a holding deposit. According to the terms of the application, the holding deposit was to be held by the broker while the application was being processed. If the prospective tenant was deemed qualified, she would receive a lease. During the time that the broker was checking on the tenant's qualifications, the property would be taken off of the rental market. If the tenant did not meet the qualifications for renting the property, the holding deposit would be returned to her. If the prospective tenant qualified, but changed her mind and decided not to rent the property, the property owner was entitled to keep the holding deposit as liquidated damages for holding the property off the rental market. Subsequent to filling out the application, Castro was approved as a tenant. In a dispute over the amount of rent to be charged for the unit, Castro decided not to rent the property and sent a demand letter to Respondent seeking the return of her deposit. On June 20, 2002, the Jander Group sent Castro a letter, in conformance with Subsection 83.49(3), Florida Statutes (2003), giving her notice of its intent to keep her deposit. Respondents accounted for the deposit to both parties in the transaction; and subsequently, delivered the deposit to the property owner. Castro never signed a lease or possessed keys, and she never had the right to occupy the property in question. Respondent predicated the handling of the escrow deposit on the assumption that he had a landlord and tenant relationship with Castro. Respondents never petitioned the FREC for a declaratory statement regarding a dispute over a deposit by a non-tenant on a lease application, rather than a rental agreement. Respondent Musashe elected not to follow Subsection 475.25(1)(d)1., Florida Statutes (2003), requirements for five reasons: his opinion that the issue was contractual; his own reading of the law; his experience with professional education; advice of private counsel; and the statements of law issued by the AG's office regarding EDOs. There is no evidence that Respondent Musashe was ever specifically advised by a state agency that the landlord and tenant procedure in Section 83.49, Florida Statutes (2003), was applicable to earnest money deposits made by a non-tenant as part of an application that did not create a lease obligation. Petitioners presented no evidence relative to paragraphs 15 through 22 and 25 through 32 of the Amended Administrative Complaint.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order dismissing the Amended Administrative Complaint filed against Respondents Nicholas Anthony Musashe and The Jander Group, Inc. DONE AND ENTERED this 11th day of August, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 2004. COPIES FURNISHED: William M. Furlow, Esquire Akerman Senterfitt 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 Jason W. Holtz, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N-801, North Tower Orlando, Florida 32801-1757 Juana Watkins, Acting Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact At all times material hereto, Respondent Robert Marriott has been a licensed real estate broker/salesman under the laws of the State of Florida, trading as Marriott Realty. In February of 1980, in his capacity as a real estate broker/salesman, Respondent obtained an offer to purchase commercial property in Miami from Orlando Villacis, a resident of Ecuador, as purchaser, for a total purchase price of $500,000. In conjunction with the offer, Villacis paid a $20,000 earnest money deposit to be held by Marriott Realty in escrow under the terms of the offer. Villacis' deposit check in the amount of $20,000 was deposited into the Marriott Realty escrow account on February 22, 1980. By March 11, 1980, Villacis' $20,000 had been withdrawn, leaving an escrow account balance of $40. This fact was never reported to Villacis. Having heard nothing definite from Respondent with regard to the offer, and because he spent most of his time out of the country, Villacis engaged the services of attorney Rafael Penalver. Prior to July 1980, Penalver contacted the Respondent and inquired as to the status of the offer. Each time, Respondent told him that the seller was still considering the offer. In July of 1980, Respondent told Penalver that the $500,000 offer had been rejected by the seller and recommended that Villacis present an offer for $570,000. Penalver prepared the offer in the amount of $570,000, again calling for a $20,000 earnest money deposit, which Penalver and Villacis assumed was still in the Marriott Realty escrow account. Receiving no response from Respondent on the second offer, Penalver attempted to contact Respondent by telephone on numerous occasions. When Penalver was successful, Respondent told him that the seller was reviewing the offer. In early September 1980, Respondent advised Penalver that the $570,000 offer had been rejected by the seller. By letter dated September 11, 1980, Penalver raised the offer to $600,000, set a deadline of September 19 for the acceptance of the offer, and directed Respondent to return the $20,000 immediately should the offer not be accepted. After September 19, having heard nothing from the Respondent, Penalver called him, at which time Respondent advised that the offer was being considered by the seller. Penalver then wrote a letter dated October 7, 1980, to Respondent demanding that Respondent deposit the $20,000 into Villacis' account. Again hearing nothing from Respondent, Penalver on numerous occasions attempted to contact him by telephone in order to again demand the immediate return of the $20,000 deposit. Being unsuccessful, Penalver wrote the Respondent on November 20, 1980, and January 22, 1981, both times demanding the return of the $20,000 earnest money deposit. After the letter of January 22, 1981, Respondent agreed to meet with Penalver in Penalver's office. On February 2, 1981, the Respondent and his wife met with Penalver. During that meeting, Respondent advised Penalver that the $20,000 was no longer available and that he and his wife had used the money to make mortgage payments and cosmetic improvements on their personal residence. Respondent challenged Penalver to sue him to get the money back. After discussing Respondent's position with Villacis, Penalver filed a civil action for return of the $20,000. In his Answer to the Complaint filed in that litigation, Respondent admitted that he had used the $20,000 deposit for mortgage payments and other personal household expenses and for payment of his IRS tax deficiency. Villacis obtained a Final Judgment in the civil action in the amount of $20,000 plus interest and costs on October 6, 1982. Respondent testified that he did not return the $20,000 earnest money deposit because, in approximately October 1980, Villacis verbally agreed to loan the $20,000 to Respondent. Villacis strongly denied making any offer of a loan to Respondent. The purported loan agreement would have occurred after Penalver had twice written Respondent regarding immediate return of the $20,000 and seven months after the $20,000 had disappeared from the escrow account. Further, after Penalver sent his November demand letter, Respondent wrote Villacis in December of 1980 asking that Villacis consider loaning Respondent the $20,000 in exchange for an unrecorded mortgage on Respondent's personal residence. Clearly, Respondent's testimony is not credible. As of the date of the formal hearing in this cause, the Final Judgment in favor of Villacis and against Respondent remained unpaid and Respondent had still not returned to Villacis the $20,000 earnest money deposit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent guilty of the allegations contained within the Administrative Complaint filed against him and revoking his license as a real estate broker/salesman. DONE and RECOMMENDED this 30th day of April, 1984, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 1984. COPIES FURNISHED: Tina Hipple, Esquire Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 David I. Schlosberg, Esquire 525 North 27th Avenue, Suite 100 Miami, Florida 33125 Frederick Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801
