The Issue The issue is whether Riverwood Condominium Association, Inc., ("the Association") violated Section 718.112(2)(i), Florida Statutes (1984 Supp.) by collecting $18,625 as common element security deposits from October 1, 1984 through March 31, 1985 in connection with leases of condominium units. There is little dispute as to the facts; this matter turns on the meaning of the terms "charge" and "fee" in Section 718.112(2)(i), Florida Statutes (1984 Supp.). The refundable security deposit of $1,000 which tenants of condominium unit owners post at the beginning of a tenancy, and which is returned to the tenant on the termination of the tenancy, (less any amounts assessed as fines or for damage done to common property by the tenant), does not constitute a "charge" or a "fee" which is forbidden by Florida Condominium Act. The Notice to Show Cause should be dismissed.
Findings Of Fact The Respondent is an association, as that term is defined in Section 718.103(2), Florida Statutes (1984 SUPP.) which is responsible for the operation of the 128-unit Riverwood Condominium. The condominium has undergone a substantial demographic change from the time it first began operation. Originally it was occupied by unit owners. Now about 43% of the units are rented out by their owners. The Directors of the Association found it useful to institute the security deposit program because as the character of the residents of the condominium changed from owners to tenants, damage was caused to common elements by tenants and their children, including but not limited to the following: backing into fences with automobiles, causing damage; knocking down light posts with automobiles; maliciously attempting to set fires to the clubhouse; knocking over concrete stanchions in entrance ways appurtenant to the Condominium; causing damage to electrical connections servicing the common elements by performing unauthorized repairs to the common elements adjacent to units; malicious damage to items of personally belonging to the Association; clogging swimming pool filters; defecation in swimming pool; damaging grassy areas with automobiles, necessitating the replacement of sod; and discharging of B-B guns through windows of the clubhouse. Tenants have also violated Association rules, for which fines are prescribed in the rules. The Association found, however, that it paid $3,000 in legal fees to collect a $345 fine from a tenant. Owners and those for whom they are responsible also have damaged common elements. The Declaration of Condominium for the Riverwood Condominium provides that "[u]nits shall not be leased without the prior written approval of the Board of Directors. Notwithstanding the lease of his unit, the liability of the unit owner shall continue" (See Respondent's response to request for admissions, filed January 30, 1986.) The Association does take applications to screen prospective tenants, but it has never charged an administrative fee in connection with the processing of those applications (id.) A resolution enacted by the Board of Director of the Riverwood Condominium Association and adopted as a rule or regulation permits the Association to collect a $1,000 refundable security deposit from each new tenant who leases a unit at the Riverwood Condominium (id.). The Declaration of Condominium, Articles of Incorporation and By-Laws of the Association do not themselves provide for the collection of security deposits. Under the authority of the resolution, the Association has collected a $1,000 refundable security deposit for each new tenant who leases a unit at the Riverwood Condominium (id.). At the conclusion of a tenancy, the security deposit is refunded in full unless the tenant was found to have damaged common property or violated Association-rules (id.). During the period October 1984 through March 1985 the Association collected security deposits in the amount to $18,625.00 (id.) 1/. The $1,000 refundable security deposit is invested at interest, but the interest is maintained by the Association, in part to defray the cost of administering the security deposit program. In the event officers or employees of the Association believe that damage has been caused to a common element by a tenant or the tenant has violated a rule, the Association gives the tenant a written notice to appear before the Board of Directors of the Association. In the event the tenant does not appear at the meeting, a second notice is provided to appearing at the following Board meeting. When the tenant appears, the tenant is given the opportunity to answer the allegation. The Board determines upon the evidence presented at the Board meeting whether damage was caused by the tenant or a rule has been violated, the amount of any damage is determined, and that amount, or the prescribed fine, is deducted from the security deposit. No evidence was presented that a security deposit has been reduced without the tenant having the opportunity to be heard on whether he is responsible for damage or has violated a rule. As of the time of the hearing, the Association maintained over $50,000 in the interest-bearing security deposit account. While the $1,000 security deposit is not collected from unit owners at the condominium, it is collected from all tenants regardless of the length of tenancy, number of persons occupying the unit or the age of those occupants. The problems of finding a way to deal with misbehavior of tenants encountered by the Association is similar to problems experienced by other condominium associations in its geographical area.
Recommendation The Notice to Show Cause should be dismissed. DONE AND ORDERED this 24th day of April 1986 in Tallahassee, Leon County, Florida. WILLIAM R. DORSEY, 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 April 1986.
The Issue The ultimate issues for determination in this proceeding are whether: Respondent violated Section 475.25(1)(b), Florida Statutes, 1/ by misrepresentation, concealment, culpable negligence, or breach of trust; Respondent violated Section 475.25(1)(k) by failing to immediately deposit funds entrusted to her in her escrow or trust account; and, if Respondent violated either statute, or both, what disciplinary action should be taken against Respondent's real estate broker's license.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to the laws of the State of Florida. Respondent is now and has been at all times material to this proceeding a licensed real estate broker in the state, holding license number 0406469. At all times material to this proceeding, Respondent was doing business in the name of Carr Real Estate, Inc., at 2351 N. Federal Highway, under license number 0257527. Respondent was the selling agent in the proposed sale of a condominium unit known as Trafalgar of Highland Beach, Unit 1005. The listing agent was Barbara Perry of Merrill Lynch Realty. Unit 1005 was owned by Mr. and Mrs. Roy P. Heinz. Mr. and Mrs. Heinz had known Respondent for approximately two years, but had no previous real estate experience with Respondent. The prospective purchasers were Mr. and Mrs. Peter Romano who were visiting from the Boston area of Massachusetts. Condominiums in Trafalgar of Highland Beach generally required an unusually long time to be sold. The proposed sale of Unit 1005 occurred sometime within the first four or five weeks after it was listed with Merrill Lynch, but the sale was never consummated. Respondent showed Unit 1005 to Mr. and Mrs. Romano on or before Saturday, November 19, 1988, and Mrs. Romano fell in love with it. Respondent telephoned Mr. Heinz sometime during Saturday evening to inform him that she had a potential buyer for Unit 1005. During several telephone conversations, Mr. Heinz and Respondent discussed the terms that would be acceptable to the sellers. Respondent made an appointment to present a written contract to Mr. and Mrs. Heinz in Unit 1005 Sunday morning at 9:30. Respondent and Mr. Heinz originally planned for Respondent to present the contract to Mr. and Mrs. Heinz on Sunday and then be joined by the Romanos. Potential purchasers of condominiums at Trafalgar of Highland Beach were required by the bylaws of the condominium association to be interviewed and approved by a screening committee comprised of the board of directors of the condominium association. The Romanos planned to return to the Boston area on Monday, November 21, 1988. Mr. Heinz was a member of the board of directors and determined that he could convene a special meeting of the screening committee on Sunday to interview the Romanos. In addition, the Romanos wanted to see Unit 1005 again. Respondent typed the contract at her office Sunday morning and took it to Mr. and Mrs. Romano's apartment for their signature before 9:30 a.m. The contract was for the sale and purchase of Unit 1005 at a purchase price of $480,000. Respondent and Merrill Lynch Realty were listed as co-brokers entitled to payment of a commission in accordance with the ". . . terms of an existing, separate listing agreement." The amount of deposit shown as held in escrow by Respondent was $20,000. An additional amount of $28,000 was required to be deposited in escrow no later than December 31, 1988. The Romanos told Respondent they preferred to wait until they got to Unit 1005 before signing the contract or the check. The Romanos explained that there could be changes and that they had only one check with them. Respondent and the Romanos then joined Mr. and Mrs. Heinz at Unit 1005. Before the contract was signed, Mrs. Heinz went downstairs and had the security guard call the condominium manager to obtain the form used by the screening committee for interviewing prospective purchasers. The manager told Mrs. Heinz that the form could not be obtained before there was a signed contract. Mrs. Heinz returned to Unit 1005 and informed Mr. Heinz of the requirement for a signed contract. The parties signed the contract and Mr. Romano made and signed the deposit check for $20,000 on Sunday morning, November 20, 1988. 3/ The deposit check was made payable to "Carr Real Estate" but remained in Mr. Romano's check book and was not delivered to Respondent at that time. Mr. Heinz left Unit 1005 with a signed copy of the contract and asked the president of the board of directors, Mr. Gray, to provide the form used in interviewing prospective purchasers and to arrange for a special meeting of the screening committee. In his own words, Mr. Heinz was " . . . not the best liked guy . . ." on the board of directors. He ". . . was young . . . and everybody else was old . . . ." In addition, Mr. Heinz and the president of the board of directors had ". . . locked horns a couple of times." The president of the board of directors informed Mr. Heinz that there was a problem with the percentage of tile in Unit 1005. Unit 1005 was carpeted except for tile in the foyer, hallways, and kitchen. A resident on the floor below Unit 1005 had complained about the noise. The president further informed Mr. Heinz that the board of directors would inform the Romanos of the problem and that ". . . this could be a problem for you. " Mr. Heinz returned to Unit 1005 and telephoned both his attorney and the developer of Trafalgar of Highland Beach. There were four ways to compute the ratio of tile to carpet in the condominiums. The percentage of tile in Unit 1005 was within permissible limits when the ratio of tile to carpet was computed using three of the four customary methods of computation. A fourth method of computation resulted in an impermissible percentage of tile in Unit 1005. Mr. Heinz explained the situation to Mr. and Mrs. Romano. Mr. Heinz believed that carpeting the foyer would resolve the issue of the percentage of tile in Unit 1005 and offered to carpet the foyer with carpeting approved by the Romanos. The parties agreed that Mr. and Mrs. Heinz would provide the Romanos with a written statement that the issue of the tile in Unit 1005 would be resolved to the satisfaction of the Romanos prior to closing. The Romanos left Unit 1005 without delivering the deposit check to Respondent. With the attention of the parties focused on discussions concerning the tile in Unit 1005 and the impending screening interview, the delivery of the deposit check was overlooked by Respondent and Mr. and Mrs. Heinz. A special meeting of the screening committee was convened, and the Romanos completed the screening interview on Sunday afternoon, November 20, 1988. Mr. Heinz telephoned Respondent on Monday morning, November 21, 1988, to ask Respondent if she had collected the deposit check the previous day. Respondent informed Mr. Heinz that she had not and went immediately to see the Romanos at their apartment. Mr. Romano delivered the deposit check to Respondent with the understanding that everything was contingent upon the proper resolution of the issue concerning the tile in Unit 1005. Mr. Romano instructed Respondent not to deposit the check until he received the written statement promised to him by Mr. and Mrs. Heinz. Mr. Romano told Respondent that the check was not good anyway until he returned to the Boston area and transferred funds necessary to cover the deposit check. Mr. Romano then told Respondent that if she deposited the check before the issue of the tile was resolved he would stop payment on the check and sue her. Respondent left the Romanos' apartment with the deposit check in hand. Respondent telephoned Mr. Heinz and informed him of the circumstances surrounding the delivery of the deposit check including the fact that the check was not good until Mr. Romano returned to the Boston area and transferred the funds necessary to cover the deposit check. Respondent also informed Mr. Heinz that Mr. Romano gave her the check with the understanding that the transaction was contingent upon receipt of the written statement promised to them by Mr. Heinz. Respondent then said, "Roy, I represent you. What do you want me to do? I'll do whatever you want me to do." Mr. Heinz instructed Respondent to hold on to the deposit check until Wednesday, November 23, 1988, when he would provide Respondent with the written statement he had promised to the Romanos. On November 23, 1988, Mr. and Mrs. Heinz executed a written statement stating that the issue of the tile in Unit 1005 would be resolved by Mr. and Mrs. Heinz to the satisfaction of the Romanos. Mr. Heinz then delivered the written statement to Respondent by leaving it with the security guard on Wednesday night at about 10 o'clock for Respondent to pick up. Respondent picked up the written statement executed by Mr. and Mrs. Heinz from the security guard on Wednesday night November 23, 1988. The next day was Thanksgiving. Respondent telephoned Mr. Romano on Friday morning, November 24, 1988, informed him that she had the written statement, and asked Mr. Romano what he wanted her to do with it. Mr. Romano instructed Respondent to send the written statement to him by Federal Express. Respondent sent the written statement to Mr. Romano by Federal Express and specified Saturday delivery. Respondent telephoned Mr. Romano on Monday morning, November 28, 1988, and asked Mr. Romano if he had received the written statement from Mr. and Mrs. Heinz. Mr. Romano said that he had not received the written statement. Respondent asked Mr. Romano for permission to deposit the check and Mr. Romano refused. Mr. Romano said that he was still concerned about the tile in Unit 1005 and that the best way to resolve the situation was to re-carpet the entire condominium. Respondent telephoned Mr. Heinz and informed him of Mr. Romano's proposal to re-carpet Unit 1005. Mr. Romano refused to re-carpet prior to closing but agreed to put the money necessary to re-carpet Unit 1005 in escrow. Respondent telephoned Mr. Romano and informed him of the proposal from Mr. Heinz. Mr. Romano then informed Respondent that his wife had changed her mind and that they did not want to purchase Unit 1005. Respondent telephoned Mr. Heinz and told him that the Romanos had decided not to purchase Unit 1005 and advised Mr. Heinz to call his attorney. Respondent deposited the check from the Romanos on Monday, November 28, 1988, the same day Respondent was instructed to deposit the check by a man Respondent mistakenly believed to be the attorney for Mr. Heinz. Mr. Romano stopped payment on the check, and Respondent received an Advice of Returned Check from her bank dated December 6, 1988. Respondent was fully aware that she represented Mr. and Mrs. Heinz and followed the instructions of Mr. Heinz rather than Mr. Romano when she did not deposit the Romanos' check until Monday, November 28, 1988. It made no difference to Respondent what the Romanos wanted Respondent to do with the check. Respondent did not deposit the check from the Romanos on November 21, 1988, because Mr. Heinz instructed her to hold on to the check until the written statement was delivered to the Romanos. Respondent fully informed Mr. Heinz in a timely manner of the facts and circumstances known to her concerning the sale of Unit 1005 at all times material to this proceeding. Respondent informed Mr. Heinz immediately after she took delivery of the deposit check on Monday, November 21, 1988, that there was a signed contract but ". . . no deal." From Monday morning through the rest of the week Respondent was on the telephone daily with Mr. Heinz, sometimes two or three times a day. Respondent always asked Mr. Heinz what he wanted her to do. As a result of the full and timely disclosure by Respondent, Mr. Heinz knew at all times material to this proceeding that the proposed sale of Unit 1005 was contingent upon the resolution of the issue involving the tile in Unit 1005 to the satisfaction of the Romanos. Mr. Heinz also knew on Monday morning, November 21, 1988, that the deposit check did not have sufficient funds on deposit to cover the amount of the check. Mr. Heinz believed that he could successfully bring legal action against the board of directors of the condominium association for their interference with the proposed sale of Unit 1005. Mr. Heinz requested a letter from Mr. Romano stating that the Romanos were rescinding the contract on Unit 1005 due to their treatment by the board of directors during the screening interview. The Romanos sent Mr. and Mrs. Heinz a letter dated November 29, 1988, stating that they were rescinding the contract as a result of the disclosure by Mr. Heinz and the board of directors of a possible existing violation of the condominium bylaws. Mr. and Mrs. Heinz knew there was no agreement among the parties unless the issue of the tile in Unit 1005 was resolved to the satisfaction of the Romanos. Mr. Heinz believed, however, that if the check from the Romanos had been in the bank, he would have been entitled to half of the deposit and the real estate agencies would have split the other half. In the words of Mr. Heinz: Nobody knew where it was going, because Romano kept changing his story . . . .I understood that he [Mr. Romano] had nothing to lose by coming back and trying to re- negotiate the Contract three times in that week period, 4/ for me to do this, that and the other thing, before he'd make the money good. Every time I said, 'Okay, fine. I'll do this.' So, then they'd [the Romanos] come up with another deal. Okay, so, no, I didn't anticipate that the thing was going anywhere but down hill; but if the check had been deposited as it was supposed to have been, I would have at least had something for the way the man tied up my property for six months. Unit 1005 was not tied up for six months as a result of the rescission of the contract by the Romanos. Unit 1005 was listed by Mr. and Mrs. Heinz with Merrill Lynch for six months. Respondent telephoned Barbara Perry in New York on November 21, 1988, while Ms. Perry was on vacation. Respondent informed Ms. Perry that " . . . we don't have a deal. . . ." Respondent instructed Ms. Perry not to take Unit 1005 off the market. After the listing expired, Mr. Heinz was approached by Mr. Ted Gray who was a resident of Trafalgar Highland Beach, and Unit 1005 was eventually sold to Mr. Gray. 5/
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is recommended that: Respondent should be found guilty of failing to immediately deposit funds entrusted to her in her escrow or trust account in violation of Section 475.25(1)(k), Florida Statutes; Respondent should receive a written reprimand; Respondent should be fined $1,000; and Respondent should be placed on probation for a period not to exceed one year. During her probationary period, Respondent should be required to comply with reasonable conditions of probation in accordance with Rule 21V-24.001(2), including an appropriate probation appearance before the Florida Real Estate Commission. Since Respondent's violation of Section 475.25(1)(k), Florida Statutes, was caused by apparent ignorance, rather than dishonest or unscrupulous behavior, the conditions of probation should include additional real estate broker education not greater than 20 hours, of which 10 hours should include broker management. RECOMMENDED this 1st day of April, 1991, in Tallahassee, Leon County, Florida DANIEL MANRY 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 1st day of April, 1991.
The Issue Whether Respondent, the developer of Hidden Banyan Condominium, violated provisions of Chapter 718, Florida Statutes, and implementing rules by failing to timely call a meeting to allow unit owners, other than the developer, to elect one-third of the members of the board of directors; by failing to include reserve accounts in the condominium association's 1982 and 1983 budgets; by failing to call an annual meeting in 1981, 1982 and 1983; and by failing to pay its share of common expenses.
Findings Of Fact Respondent is the developer of Hidden Banyan Condominium, a 24-unit condominium located in Lantana, Florida. This condominium was created, in law, on March 6, 1980, with the filing of a Declaration of Condominium, and construction was completed soon thereafter. Under the Declaration of Condominium, Hidden Banyan Condominium Association, Inc., a Florida not-for- profit corporation, was responsible for the operation of the condominium. Respondent sold the first condominium units on April 18, 1980, May 15, 1980, July 1, 1980, and two units on August 1, 1980. Consequently on August 1, 1980, unit owners other than Respondent owned more than 15 percent of the condominium units. Respondent controlled the condominium association until September 26, 1983, when a duly noticed condominium association meeting was held. Four non- developer unit owners were elected to the five seats on the governing board. Sam Seppala, a contractor and president of the Respondent corporation, was formerly director of the condominium association's governing board. Although several informal meetings of unit owners were held, no duly noticed annual meeting was held in 1982 or in February, 1983. 1/ As Mr. Seppala explained, he was "too busy" and unaware of the February annual meeting date designated by the Declaration. Respondent admits that, during the time it controlled the association, it failed to call a meeting of the unit owners within sixty days of August 1, 1980, to allow unit owners (other than the developer) to elect one-third of the membership of the governing board. The budgets for the condominium association during 1982 and 1983, when the association was controlled by the developer, contained reserve accounts but did not separately designate or "line itemize" reserve accounts for roof replacement, building painting, and pavement resurfacing. Both before and after July 1, 1980, 2/ - until August 5, 1983, when the Notice to Show Cause was issued - Respondent paid no monthly common expense assessments for the units which it owned. It did, however, pay all of the condominium association's budgetary deficits during that period, and no net amount is now owed by it to the association. There is no evidence that the condominium association suffered any monetary loss from Respondent's failure to itemize reserve accounts for roof replacement, building painting, and pavement resurfacing, or from its failure to pay common expenses otherwise due for the units which it owns. Beginning in March, 1982, the Division notified Respondent - on four separate occasions - of the alleged violations which later became the subject of its Notice to Show Cause, resulting in this proceeding. Respondent was given ample opportunity to voluntarily comply with the statute, yet did not do so until September 1, 1983.
Recommendation Based on the foregoing, it is RECOMMENDED: That respondent be fined $3000 for multiple violations of Ch. 718, Florida Statutes. DONE and ENTERED this 5th day of June, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. 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 5th day of June, 1984.
Findings Of Fact At all times relevant hereto John Young was registered as a real estate salesman by the Florida Real Estate Commission. On October 2, 1985 Respondent and William Kelly, D.O. entered into a contract to jointly purchase a condominium from Concord Developers Inc. (Exhibit 1). The contract provided for a down payment of $2,000 with an additional earnest money deposit of $3690 to be paid on or before November 4, 1985. Respondent and Kelly each gave the seller a check for $1000 at the signing of the contract and this $2000 was deposited in escrow with the escrow agent. Kelly met Respondent through Respondent's wife who worked in Kelly's office. At the time Kelly was looking for income tax shelters and this purchase appeared to qualify for that purpose. On November 9, 1985, Kelly made out a check payable to John Young in the amount of $1845 which represented Kelly's half of the additional $3690 earnest money deposit. This check was either cashed by Young or deposited in Young's bank account (Exhibit 2). The additional earnest money deposit was not made to the seller, as required by the contract, Exhibit 1. Young notified Bayside Federal Savings and Loan Association, who was to finance the sale, that the loan application was withdrawn, the transaction was cancelled, and two checks in the amount of $1000 each were returned to the seller by the escrow agent (Exhibit 6). The customary practice of the seller in such a situation was to return the down payment to the buyer by check drawn on the seller's account. While no witness could recall this specific transaction, the usual practice would be to return the deposit to the buyer. In this case, the deposit would normally have been returned to Young. Young acknowledged that he received the return of his $1000 deposit but not the $1000 that represented Kelley's portion of the down payment. When Kelley gave Young the check for $1845 he inquired if it was necessary for him (Kelley) to attend the closing and Young advised him it was not. When Kelley subsequently learned that the transaction did not close, he demanded the return of his money. To date he has received none of the monies he deposited to purchase this property. Evidence was presented that in December 1985, Young closed on a condominium he and his wife had contracted to purchase in this same development, and subsequently moved into this unit. While this indicates Young had the opportunity to convert Kelley's contribution to the purchase of the condominium by Young and his wife, no credible evidence was presented that he did so. The evidence that was presented regarding this transaction was that Young was able to move into that unit with a total cash outlay of less than $500. Young accounted for the $1845 check from Kelley as payment of a bet between him and Kelley on one football game. In rebuttal Kelley testified that not only did he not bet with Young on any matter, but also he has never gambled on a football game in his life. Young's testimony that a $1845 bet was made on a football game is so unbelievable that it taints all of his testimony.
Recommendation That the Real Estate license of John Young be revoked. Entered this 2nd day of June, 1989, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1989. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Post Office Box 1900 Orlando, Florida 32801 Robert H. Dillinger, Esquire 5511 Central Avenue St. Petersburg, Florida 33701 Darlene F. Keller Division Director Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Bruce D. Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0729
The Issue The issue framed by the Notice to Show Cause is whether Allison on the Ocean, Inc., violated Section 718.502(2)(a), Florida Statutes (1984 Supp.) by accepting a deposit of $85,000 and executing a "Memorandum of Agreement" with Hildagard Waltraud Bitton when that Memorandum of Agreement had not been approved for use as a reservation agreement form by the Division of Land Sales Condominium and Mobile Homes?
Findings Of Fact Allison on the Ocean, Inc., is an active, for profit Florida Corporation (PX 4). 1/ Ms. Chantal Fianson is the owner of all five hundred shares of authorized stock in Respondent (PX 4; testimony of Ms. Fianson). The Allison Hotel in Miami Beach, consisting of studio apartments, was leased by Ms. Fianson. She intended to convert it to condominium ownership. Apparently the lease was held in the name of Allison on the ocean, Inc. An attorney was retained by Ms. Fianson to prepare the necessary papers for the condominium conversion. In connection with that conversion application, a reservation deposit agreement had been submitted to the Department of Business Regulation, copy of which was entered into evidence as PX 2. After those conversion papers were submitted to the Division in Tallahassee, Ms. Fianson was informed in April 1954 that the condominium conversion would not be approved because although she had a long-term lease, a condominium project required ownership of the land on which the building stood (testimony of Ms. Fianson). Before the Department of Business Regulation declined to approve the condominium project as originally proposed by Ms. Fianson, on March 2, 1984, an agreement entitled "Memorandum of Agreement" was executed between Allison on the ocean, Inc., and Hildagard Waltraud Bitton by their respective representatives stating Ms. Bitton's intent to purchase or sublease three units in the property (PX 1). That memorandum shows by its terms that it was not intended to be the contract for the purchase and sale of the units. It provided for the cancellation of the agreement within ninety days, at the buyer's option, and stated that the validity and the interpretation of the agreement would be governed by Florida law (PX 1 paragraph 7). Ms. Bitton paid $85,000 to Allison on the Ocean, Inc., in connection with this Memorandum of Agreement, which money was then used for expenses related to the conversion of the building to a condominium (testimony of Ms. Fianson). Significantly, the prefatory "whereas" clauses in the agreement stated that "Developer is in the process of converting the Allison Hotel, located at 6261 Collins Avenue, Miami Beach, Florida to a Condominium . . ." after which by hand interlineation was written "or SUB LEASE" and the initials of the representatives of both parties appear. The memorandum expressed the intention of the parties that if the proposed condominium conversion were not approved, Ms. Bitten would receive not a fee ownership in condominium units, but a sublease of an unspecified term from the lessee-developer, under the long-term lease which the Respondent did have on the Allison Hotel. The attorney for the purchaser/lessee Ms. Bitten drew up the Memorandum of Agreement (PX 1), and it was not submitted to the Division for review before it was executed. After learning in April 1984 that the condominium project would not be approved, Ms. Fianson did arrange to purchase the land from its owner, and another lawyer was obtained to file condominium documents reflecting the fee ownership by the developer. In the interim, the condominium market became very bad, and ultimately the bank which had provided the Respondent the purchase money mortgage for the property foreclosed on the Allison Hotel. The evidence does not show whether the $85,000 which was used in the conversion process was ever returned to Ms. Bitton.
Recommendation It is recommended that the notice to show case issued in this case be dismissed. DONE AND ORDERED this 5th day of September 1986 in Tallahassee, Leon County, Florida. WILLIAM R. DORSEY 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 September 1986.
The Issue The issues in this matter concern an Administrative Complaint/Notice to Show Cause, which has been brought by the Petitioner against the Respondent charging various violations of Chapter 718, Florida Statutes. Those accusations are more completely described in the conclusions of law.
Findings Of Fact The parties in the person of their counsel entered into a written prehearing stipulation, by which certain facts were agreed to. Those facts are as follows: Stipulated Statement of Facts: The Petitioner herein is the State of Florida, Department of Business Regulation, Division of Florida Land Sales and Condominiums. The Respondent in this matter is Sujac Enterprises, Inc., the developer of a residential condominium known as Ginger Park Condominium located in Jacksonville, Florida. Mr. Jackson M. Jobe is the president of the developer corporation. Transition from developer control of the condominium association occurred pursuant to Section 718.301, Florida Statutes, on November 1, 1983. Prior to this date, Respondent Sujac Enterprises, Inc., was in control of the condominium association. On April 18, 1983, The Division received a condominium complaint from unit owner, Cynthia A. Doallas, filed against Sujac Enterprises, developer of the Ginger Park Condominium. The Division investigation file was opened on April 20 and this investigation was assigned to Janice Snover, specialist and investigator. The Declaration of Condominium was recorded March 12, 1982. The condominium association was incorporated February 16, 1982. Section 8.4 of the declaration of condominium provides for an assessment guarantee for so long as the developer shall own any condominium units within the condominium. At the time of this stipulation, the developer still owns at least one condominium unit within the condominium. The developer controlled association failed to maintain the accounting records provided by Section 718.111(7)(a), (b), Florida Statutes, during the period beginning with the incorporation of the association through at least March 1983. Accounting records were assembled after March of 1983. Mr. Phillip DiStefano was elected to the board of administration in March of 1983 in accordance with Section 718.301(1) , which provides that when unit owners other than the developer own 15 percent or more of the units, the unit owners other than the developer shall be entitled to elect no less than one-third of the members of the board of administration. Mr. DiStefano was elected by unit owners other than the developer. The developer through its president instituted recall procedures pursuant to the procedure as outlined in Section 718.112(2)(g), Florida Statutes, against board member Phillip DiStefano, by circulating a form entitled "Removal of Director or Directors." Mr. Jobe solicited signatures for the agreement, and further, voted the developer corporation's unsold unit votes in favor of the recall. Mr. DiStefano was recalled, with a sufficient number of unit owners other than the developer voting in favor of recall to approve the recall. The developer controlled condominium association failed to provide to unit owners a financial statement of actual receipts and expenditures for the fiscal/calendar year ending December 21, 1982, within 60 days of the end of the year. This financial statement was, however, provided to unit owners approximately three months after the 60 day time period provided in Section 718.111(13), Florida Statutes, had elapsed. The following additional facts are found based upon the presentation made at the final hearing: At the point of the final hearing, the developer still owned a condominium unit within the condominium. The developer had allowed other persons to take charge of the accounting procedures of the condominium association from the inception of the association through March 1983. Those other persons operated on the basis of a checkbook in which check stubs were maintained and deposit slips kept. Some invoices were also maintained. These records, in addition to not being maintained by the developer when the developer was serving as the association in this period through March 1983, were not in accordance with good accounting practices. Moreover, they did not contain an account for each unit, designating the name and current mailing address for the unit owner, with the amount of each assessment, the dates and the amounts in which the assessments came due and the amount paid upon these individual accounts, with the balance due being reflected. As revealed by an audit which the developer had requested of an accountant which it hired, this audit dating from June 7, 1983, there was a deficit in the reserve account on that date. This discovery was made prior to the transfer of the accounting records from the developer to other condominium unit owners. In effect, on June 7, 1983, the reserve account for capital expenditures and maintenance was insufficiently funded. The exact amount of deficit was not shown in the course of the hearing. Therefore, it has not been demonstrated that the deficit of June 7, 1983, corresponds to the deficit in the reserve account in the amount of $1,186.18, effective December 31, 1983 as found by Petitioner's accountant. Respondent in its efforts to refute responsibility for the reserve deficit has failed to demonstrate, by way of defense, that charges incurred on behalf of other condominium unit owners should reduce the developer's deficit responsibility. This pertains to its reference to prepaid insurance, pest control and construction costs related to a fence. The reserve account for capital expenditures and maintenance is a common expense. The developer, pursuant to Section 8.4 of the declaration of condominium is responsible for the deficit in the reserve account as reflected on June 7, 1983, in keeping with the assessment guarantee set forth in that section. That guarantee continued until the account was tranferred to the other condominium unit owners. Features of the aforementioned guarantee related to responsibility to insure against additional assessments attributable to deficits other than those in the reserve account, i.e. for other forms of common expenses, developer's share, only would occur at the point of sale of the last condominium unit. That contingency had not occurred at the time of the conduct of the final hearing. The developer kept the accounting records from April 1983 until June 1983. Subsequently when the records were turned over to the other condominium unit owners as a part of the transition of association control, the developer failed to have a transitional review conducted by an independent accountant related to financial records of the association.
Recommendation It is recommended that a final order be entered which imposes a penalty in the amount of $2,500 for those violations established pertaining to Count I, IV and V and that Counts II and III be dismissed. DONE AND ORDERED this 3rd day of July 1984, in Tallahassee, Florida. CHARLES C. ADAMS 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 3rd day of July, 1984. COPIES FURNISHED: Karl M. Scheuerman, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Jerry A. Funk, Esquire 1020 Atlantic Bank Building Jacksonville, Florida 32202 E. James Kearney, Director Division of Land Sales and Condominiums The Johns Building 725 South Bronough Street Tallahassee, Florida 32301 Gary Rutledge, Secretary Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32301 =================================================================
The Issue The issues are whether the Petitioner lawfully revoked John Brotherton’s exemption for the repair or replacement of a dock in submerged lands and whether Respondent timely requested a hearing.
Findings Of Fact Intervenor is the successor by merger with Bankers Real Estate Investment Company. References to Intervenor shall include Bankers Real Estate Investment Company. Intervenor submitted to condominium ownership the property that, following condominium construction, has become known as Sportsman’s Riverside Townhomes Association (Sportsman’s). This property borders the Homosassa River. Subject to the legal effect of the transactions described below, Sportsman’s owns the riparian rights to the area upon which a dock owned by Respondent is located. By warranty deed dated February 1, 1984, David J. Steward acquired Sportsman’s condominium unit five. The deed contains no reference to a dock, but conveys only unit number five and an undivided share in the common element. However, by letter to Mr. Steward dated June 19, 1984, the Chairman of Bankers Real Estate Investment Corp. agreed that, in consideration of Mr. Steward’s execution of amended condominium documents, the developer “will” assign Mr. Steward more parking spaces and “[y]our boat dock will remain permanently assigned to your unit as a limited common element reserved for use by your unit.” On October 12, 1990, David J. Steward conveyed Sportsman’s condominium unit number five to Respondent. The deed conveyed “items of personal property including the private dock thereon.” On April 20, 1993, Respondent applied to Petitioner for an exemption to repair the dock that Mr. Steward had sold him. The dock had been damaged in a storm the prior month. The application includes a copy of the warranty deed to Respondent. The deed reveals that Respondent owns only a single unit of a condominium project, but the application does not name the condominium association as an adjacent property owner. Respondent checked the form on the application stating that he was the record legal owner of the “property on which the proposed project is to be undertaken.” The application states that the dock is a floating dock for the private docking of Respondent’s boat. The application reports that the dock is 128 square feet in area. By letter dated June 1, 1993, Petitioner granted Respondent the requested exemption from permitting, “[b]ased solely upon the documents submitted to the Department ” The letter adds that the exemption constitutes “authorization from the Board of Trustees Pursuant to a Memorandum of Agreement entered into on November 23, 1992.” The letter warns that Petitioner may revoke the exemption determination “if the basis for the exemption is determined to be materially incorrect . . ..” The Memorandum of Agreement dated November 23, 1992, (MOA) is between the predecessor agency to Petitioner and the Board of Trustees of the Internal Improvement Trust Fund (Board of Trustees). In the MOA, the Board of Trustees authorizes the use of state-owned submerged lands for all activities (subject to irrelevant exceptions) for which Petitioner grants exemptions from environmental resource permitting. By letter dated April 24, 1996, Petitioner informed Respondent that it had learned that Respondent had supplied “materially incorrect” information in the application submitted with the April 20, 1993, letter. The April 24 letter explains that Respondent asserted in the application that it was the record owner of the property, but the warranty deed revealed that he was not. The April 24 letter gives Respondent 21 days from receipt within which to file a petition requesting a formal administrative hearing. Respondent timely filed his request for a hearing. The facts do not establish a waiver of Respondent's right to demand a hearing. Petitioner did not rely on Respondent’s representation that he was the owner of the property on which the dock was located. The warranty deed attached to the application clearly revealed that Respondent owned only a condominium unit and undivided interest in the common element. Petitioner also knew that the state owned the submerged land at the dock.
Recommendation It is RECOMMENDED that the Department of Environmental Protection enter a final order dismissing the proceeding seeking the revocation of the exemption from the Department and consent from the Board of Trustees. ENTERED in Tallahassee, Florida, on June 10, 1997. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings on June 10, 1997. COPIES FURNISHED: Perry Odom, General Counsel Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Albert E. Ford, II, Esquire Mail Station 35 3000 Commonwealth Boulevard Tallahassee, Florida 32399-3000 John Brotherton 6304 North Otis Avenue Tampa, Florida 33604 Robert G. Southey, Esquire Delano & Southey Post Office Box 15707 St. Petersburg, Florida 33701-5707 Kathy Carter, Agency Clerk Department of Environmental Protection Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
Findings Of Fact Petitioner is authorized statutorily to license and regulate real estate salesmen and brokers. At all times material to these charges, Donald J. Munch was a licensed real estate salesman holding license number 045938. From December, 1987 through May 30, 1989, Munch was licensed as a salesman with Active One Realty, Inc., Winter Park, Florida. He now holds a broker's license. Sand Dollar Condominium Association was an association of condominium owners who owned apartments in Sand Dollar Condominiums. Owners of apartments in the condominium had entered into agreements with the association to rent out their apartments. This agreement provided that the association would receive 20% of the rents received. Munch was the owner of Four Seasons Properties (Four Seasons), a property management company, which contracted with Sand Dollar Condominium Association (Sand Dollar) from December 13, 1987 until May 30, 1989 to provide various management services, including but not limited to, recruiting, hiring and supervising all personnel; installing and maintaining an electronic bookkeeping system; collecting monthly assessments; maintaining a bank account; preparing and mailing delinquent notices; auditing accounts and records; and collecting delinquencies; negotiating outside contracts for Sand Dollar; and supervising a rental program organization with advertising, printing, electronic bookkeeping, rotation scheduling and mailings. Although not specifically stated, Four Seasons was to collect for the rental of apartments. Four Seasons was to be paid for its management services $2,000.00 per month payable on the first of every month during the duration of the contract. It is uncontroverted that, in addition to this compensation, Four Seasons also received 15% of the 20% of receipts from the rental of apartments which were payable to Sand Dollar by the owners of apartments who participated in the rental program provided by the association and managed by Four Seasons. It is uncontroverted that, when Four Seasons began management of the condominium, the condominium was over $10,000.00 in arrears with regard to money used by the association for upkeep of the condominium which had been taken from the rental escrow accounts. Four Seasons, through its owner Munch, rented apartments for the association, collected fees from owners, rents from lessees, deposited the proceeds into the bank account of Four Seasons maintained in accordance with its contract with the association, and accounted periodically to the association and owners during the period of its management. The Respondent's broker knew of the Respondent's activities and did not expect commissions or deposits to his account from the Respondent. Four Seasons and Munch assert that Sand Dollar owed Four Seasons $7,100.00 when their contract was terminated. Four Seasons provided Sand Dollar a complete financial statement and a check for $10,079.92 to Sand Dollar. Four Seasons retained $7,100.00, the amount which it claimed it was owed by Sand Dollar. Subsequently, Sand Dollar sued Four Seasons over the $7,100.00 claim and Munch paid the money into Sand Dollar's attorney's trust account.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Administrative Complaint be dismissed. DONE AND ENTERED this 15th day of August, 1990, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of August, 1990. COPIES FURNISHED: Janine A. Bamping, Esq. Senior Attorney Department of Professional Regulation Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, FL 32802 Howard Hadley, Esq. 2352 Carolton Road Maitland, FL 32751 Kenneth E. Easley, Esq. General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Darlene F. Keller Division Director Division of Real Estate Department of Professional Regulation 400 West Robinson Street P.O. Box 1900 Orlando, FL 32801 ================================================================= AGENCY FINAL ORDERS ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE, Petitioner, vs. CASE NO. 0164284 DOAH NO. 90-0709 DONALD J. MUNCH Respondent. /
Findings Of Fact At all times relevant to this case, the Respondent, Pebble Springs Condominium Association of Bradenton, Inc., was the condominium association for Pebble Springs Condominium VI in Bradenton, Florida. Matthew Ford is and, at all times relevant to this complaint, was a unit owner at Pebble Springs Condominium VI and a member of the condominium association. Matthew Ford requested to inspect the Respondent's records, hereafter described in paragraph 4 and referred to as Exhibits A and B, which were prepared and provided by the law firm of Becker, Poliakoff and Streitfeld, P.A., to the Respondent as a bill for legal services rendered in the Respondent's suit against Ford. At the time that Ford made his request for Inspection of the Respondent's records pursuant to Section 718.111(7), Florida Statutes, he was the defendant in a circuit court lawsuit in which the Respondent was plaintiff. Said court case is currently on appeal. Joint Exhibits A and B constitute the entirety of said law firm's bill to the Respondent. Joint Exhibit B describes each instance of attorney's service to the Respondent and the amount of time attributed to said service. The parties stipulate that the information contained in the document sought by Ford is the same as that reported in Exhibit B. The data in Exhibit B is reported in four columns, as follows: date, attorney, time, and actions. The information listed under "actions" includes the following listings: (03/14/83) Telephone conversation with bank officers and association officers re unfreezing of association funds. (03/14/83) Preparation for meeting with board members and witnesses; preparation of counterclaim. (03/14/83) Research concerning mandamus and other injunctive relief; preparation of counterclaim. (03/15/83) . . . preparation of counterclaim and motions to strike. (03/16/83) Preparation of counter-claim; . . . filing of counterclaim and coordination of service. (04/06/83) Preparation of motion to dismiss or for more definite statement and motion to strike on behalf of firm and Daniel J. Lobeck. (04/07/83) Memorandum to Alan E. Tannenbaum re Murley contempt of court order. (04/08/83) Receipt and review of motion to dismiss filed on behalf of board by insurance counsel; . . . (04/12/83) Preparation of motion to hold [deleted in exhibit] in contempt. (04/13/53) Correspondence to auto owners; correspondence to [deleted]; amendment of motion for contempt; setting of contempt hearing. (04/15/83) Review of motion to appoint special master and notice of bearing; telephone conference with Alan Tannenbaum re same. (04/18/83) Conference with Daniel J. Lobeck re: motion to appoint receiver. (04/19/83) Preparation of proposed order dismissing motion to appoint special master; research and preparation for hearing on motion; hearing on motion; telephone conferences with clients re hearing and order. Ford's request as to Joint Exhibit B was refused by the Respondent, which did provide him with Joint Exhibit A which states the sum due for legal services together with stated costs and total balance due. The Respondent also provided for Ford's inspection the Respondent's ledgers and checkbooks, which displayed the sums paid each month by the Respondent to the law firm. In the course of the litigation between the Respondent and Ford, Ford sought the production of documents from the Respondent as evidenced by Exhibit C. In the context of the hearing for attorney fees in the litigation between the Respondent and Ford, the Respondent has offered to provide Ford with the information which he had previously sought. During March or April 1983, Ford filed a complaint with the Petitioner alleging that he was being denied access to the Respondent's books and records contrary to Section 718.111(7), Florida Statutes. The Petitioner conducted an investigation of Ford's complaint, which resulted in the issuance by the Petitioner of a Notice to Show Cause to the Respondent issued May 9, 1983. The Respondent requested a formal hearing by petition dated June 1, 1983, which request was granted.
Recommendation Having found the Respondent not guilty of the allegations contained in the Administrative Complaint, it is recommended that the Administrative Complaint filed against Respondent be dismissed. DONE and RECOMMENDED this 5th day of March, 1984, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 5th day of March, 1984. COPIES FURNISHED: Karl M. Scheuerman, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301 Daniel J. Lobeck, Esquire 1343 Main Street, Suite 204 Sarasota, Florida 33577 Gary Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301
