Findings Of Fact At all pertinent times, respondent Bobbie G. Scheffer, who holds license No. 0073955, was a real estate broker for Rivard Realty, Inc. in Fort Walton Beach, Florida; and Ralph S. Ecoff was a licensed real estate salesman, employed by Rivard Realty, Inc. He holds license No. 0454969. In the spring of 1988, another salesman in the employ of Rivard Realty, Inc., Wayne Thompson, obtained the listing for the three-bedroom, one-story house at 28 East Casa Loma Drive in Mary Esther, Florida, from its then corporate owner, Roman Acts, Inc. He received information about the property from a representative of the corporation. Without verifying the information, Mr. Thompson entered it into a computer. Misled by the owner's representative, he reported the house's age as eight years. Respondent's Exhibit No. 7. In fact, the house had been built in 1974. Petitioner's Exhibit No. 4. A public water supply serves the house, but a septic tank, not a public sewer, receives wastewater from the house. Aware of these matters, Mr. Thompson, when confronted with a blank on a form labelled "WATR/SEW", filled in "Pub. Wat." Respondent's Exhibit No. 7. No more than another letter or two could have been squeezed into the blank on the form displayed on a computer video terminal. Respondent Ralph S. Ecoff saw the house in the course of showing it to prospective buyers, and decided to buy it himself. After a representative of Roman Acts, Inc. accepted his offer (but before the closing), Mr. Ecoff and a partner set about refurbishing the house. Mr. Ecoff, a septuagenarian who bought the house with the intention of reselling it, finds computers intimidating. Still another real estate salesman in the employ of Rivard Realty, Inc., Steve Kehran, volunteered to enter a revised listing in the multiple listing service computer, to let it be known that the property was again for sale. As instructed by Mr. Ecoff, Mr. Kehran raised the price and "changed the blurbage" (to read "EVERYTHING NEW AGAIN. COMPARES WITH NEW HOME. LOW INTEREST RATE," etc.) Petitioner's Exhibit No. 11. In keeping with Mr. Ecoff's instructions, Kehran relied on the superseded listing for other information about the house. That is why the age of the house was again inaccurately reported as eight years. Extrapolating innocently but inaccurately from the earlier listing's "Pub. Wat.," Mr. Kehran assumed public sewers accompanied the public water supply and filled in the "WATER/SEW" blank with the abbreviation "Comm Sew." Petitioner's Exhibit No. 11. Mr. Ecoff had read the listing from which Mr. Kehran took the information but, he testified, he did not read it carefully. Whether he read over what Mr. Kehran wrote at any time before the Stacys complained of the inaccuracies is not clear. Mr. Ecoff has said all along that he was aware the property had a septic tank. He testified to this effect at hearing and also testified that he was aware the house was more than eight years old when the Stacys agreed to buy it. If he had read the listing Mr. Kehran entered in the computer for him with proper care and due regard for the importance of its accuracy, he would have discovered the misinformation it contained. Although Mr. Stacy had physical possession of a multiple listing sheet bearing the information Mr. Kehran introduced into the computer data bank at Mr. Ecoff's behest, while he and his wife drove around with Ms. Scheffer, looking at houses, and may well have read it at that time, the evidence did not show that either Ms. Scheffer or Mr. Ecoff reiterated the information verbally. (It was not clear whether Mr. Stacy retained the sheet Ms. Scheffer furnished him after seeing the house.) Engaged by a mortgage company, an appraiser who was familiar with the neighborhood reported the true age of the house, but put its "effective age" at ten years, after two visits to the property. The appraiser's report, which recited inaccurately, as the listing had, that a public sewer served the property, was furnished to the mortgage company that financed the Stacys' purchase. Once the report reached the mortgage company, it was available to the Stacys, although they did not in fact see it, as far as the evidence showed, before the closing, which took place on August 24, 1988. On or before January 1, 1991, Mr. and Mrs. Stacy will be required to cause pipe to be installed to connect the house to a public sewer main, itself yet to be laid. Mr. Stacy has been told the hook-up will cost $1,600.00 over and above the $600.00 it will cost to install the connector. Even so, the evidence did not establish that the house's dependence on a septic tank affected its market value in 1988. The evidence also failed to show that the house's age materially affected its value. Ms. Scheffer encourages salespersons in her employ to take advantage of courses the local Board of Realtors offers, and scheduled Mr. Ecoff for every such course available. She has not personally instructed salespeople to verify information sellers give them by independent inspection. Perhaps because the practice of relying on sellers' representations is widespread, the multiple listing sheets all bear the disclaimer, "INFORMATION DEEMED RELIABLE, BUT NOT GUARANTEED." The evidence did not show how carefully Ms. Scheffer read the inaccurate listing that salesmen in her employ generated, or that she would have been or should have been aware of the inaccuracies, however carefully she had examined the listing. Although Mr. Ecoff said he knew there was a septic tank on the property because the grass was so green in part of the backyard, Mr. Stacy testified that the septic tank is buried in front of the house. It was not proven that even an experienced real estate broker like Ms. Scheffer should necessarily infer an actual age of more than eight from an effective age of ten years. In short, the evidence did not clearly and convincingly demonstrate that respondent Scheffer actually knew or had reason to know the listing was inaccurate.
Recommendation It is, in accordance with Rule 21V-18.008, Florida Administrative Code, recommended: That petitioner suspend respondent Ecoff's license for thirty (30) days. That petitioner dismiss the administrative complaint, insofar as it alleges that respondent Scheffer violated Section 475.25(1)(b), Florida Statutes (1989). RECOMMENDED this 20th day of December, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II 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 20th day of December, 1990.
Findings Of Fact At all times pertinent to the allegations contained herein, Petitioner, Division of Real Estate, was the state agency in Florida responsible for the regulation of the real estate profession and for the licensing of real estate professionals. Respondent was, at all times material to the issues herein, a licensed real estate salesman in this state. He was issued salesman's license 0419038 and from August 27, 1990 through September 2, 1991, was an active salesman with Scarlett Faulic & Associates located in Indian Shores, Florida. From September 3, 1991 through September 30, 1991, he was a salesman with Arn Realty Group, Inc., also in Indian Shores. Effective October 1, 1991, his license became inactive due to non-renewal and remained in that status until he renewed it on April 16, 1992 when he affiliated as a salesman with First Gulf Beach Realty, Inc. in Indian Rocks Beach, Florida. From July 28, 1992 to the date of the hearing, he was an active salesman with Bobby Byrd Real Estate, Inc. in Clearwater. Sometime prior to June 13, 1991, Ted Plihcik, presently a resident of Coram, New York and formerly the owner/occupant of the property in issue which is located in Pinellas County, Florida, met the Respondent at a garage sale at Respondent's home. Because Mr. Plihcik intended to move out of the area, he entered into a listing agreement with Respondent on behalf of Arn Realty's predecessor, under which the firm was either to rent or sell the property. This agreement was to expire on December 31, 1991, and there is no evidence it was cancelled prior to expiration. Sometime after Mr. Plihcik moved to New York, he received a telephone call from Respondent in which Respondent said he had a couple to rent the property for the rental amount previously stipulated, $650.00 per month, from which Respondent was to get a commission of 10%. Respondent indicated he would take a deposit from the tenants and that he had a signed lease. Prior to his departure, Mr. Plihcik had started to make some renovations to the property's garage. He had redone the bathroom area and was planning to make another room out of the garage. However, he never got around to completing the job or to putting in the windows. He had decided to change it back into a garage, and in fact the prospective tenants wanted a garage rather than another bedroom, so he directed Respondent to hire someone to finish the reconversion. At Plihcik's request, Respondent got several estimates for the work which Plihcik felt were too high. At that point, Respondent offered to do the work himself. Plihcik agreed and gave Respondent authorization to use the deposit money to pay for necessary materials and consistent with that agreement, on September 14, 1991, by letter, Plihcik authorized Arn Realty Group to release money to Danley for the "alterations and repairs he is doing to my property...." Because the Isabelles did not pay the full two month deposit, Mr. Plihcik later revised the authorization to allow Respondent to use rent money as well, but he did not relieve Respondent from the requirement to turn any money received as rent over to Arn Realty upon receipt and thereafter get payment from the company. It is obvious that Plihcik was under the opinion that the deposit money Danley had received from the tenants had been turned over to the broker, Arn Realty. Mr. Plihcik tried unsuccessfully repeatedly to contact the Respondent requesting a copy of the lease agreement, copies of receipts for materials purchased for the garage work, or anything else pertinent, even sending at least one letter by certified mail, the receipt for which bore what Plihcik recognized as Respondent's signature. He received no responses. Sometime in early August, 1991, Deborah Isabelle and her husband rented Mr. Plihcik's house through Respondent and put up a [portion of the 1st and last month rent. They also signed a lease which called for rent at $525.00 per month but, notwithstanding many requests for one, never received a copy. Each time they asked, Respondent would say he would get them one but he never did. At the time they rented the property, the garage was under repair and, after some negotiation, it was orally agreed upon that the work would be completed by move-in time, September 1, 1991. At one point, Respondent asked the Isabelles to pay the rent in cash because it would be easier for him to buy the things needed for the repair work he was to do. They acceded to this request for a while, writing some checks to the supermarket for cash to pay Respondent, but got only one receipt. Because they were uncomfortable with this cash arrangement, they asked Respondent for the name of the owner of the property and he replied, merely, "Ted." On one occasion, mail for Mr. Plihcik from a real estate agency came to the house. Ms. Isabelle thereafter got Mr. Plihcik's New York address from the County records, contacted him, and asked him if he had received his rent. She received a negative reply. She also asked him about the lease they had signed and he related he had not received one of those, either. In fact, when she called, Mr. Plihcik didn't know who she was he had never heard their name. During that conversation, Ms. Isabelle advised Mr. Plihcik that they had not received any of the things Respondent had promised; that he was also asking them for cash; and was frequently at the house. Mr. Plihcik said he'd take care of it but no more was done. In November, 1991, Ms. Isabelle set up a three way telephone call between the Isabelles, Mr. Plihcik and the Respondent. During that call, Respondent claimed he was doing the work promised; that he had mailed Mr. Plihcik some money in cash several weeks previously and could not understand why it had not been received. The lease agreement, at paragraph 6, dealing with maintenance and grounds upkeep, purports to require the Isabelles "... to help convert 3rd bedroom back to garage in lieu of $650.00 rent." Though Respondent contends the rent was reduced from $650.00 per month, as was called for in the listing agreement, to $525.00, conditioned upon the tenants' help with the work on the garage conversion, there is no evidence that Mr. Plihcik ever agreed to accept less than the $650.00 per month rent. In addition, Ms. Isabelle claims they did not agree to do any work and the lease did not contain that provision at the time they signed it some 2 or 3 weeks after they moved in. It is found that Respondent's contention is without merit even though Mr. Isabelle did take down some 2x4's so he could install his tool bench. Over the period of their occupancy, the Isabelles paid Mr. Danley a total of $1,531.50 by check directly or by check written for cash and turned over, as well as an additional $400.00 in cash. Six hundred dollars of the checks were made payable to Arn Realty, and it appears they were deposited to that company's account. The balance of the checks and the cash were either payable to Respondent directly or, in the case of the Kash & Karry checks, written for cash to give to him. Of the $400.00 Arn Realty check, $300.00 was paid over by company check to Respondent for repairs to the instant property on the same day as the Isabelles' check was deposited to the company account. Respondent admits he received a total of $1,355.00 from the Isabelle's, either directly or indirectly, but claims all of it was used for work on the house. He also claims he is still owed $1,001.00 from Mr. Plihcik which includes $630.00 in real estate commission owed the broker. Nonetheless, Mr. Plihcik claims he received none of the money paid to Respondent, nor has Respondent presented any evidence to show the money was spent on either materials or labor for the garage reconversion. Mr. Arn, the broker supervising Respondent during the time is issue here claims he had no knowledge Respondent had obtained a tenant for Mr. Plihcik before he got Plihcik's letter. His records show a listing agreement for the property which calls for a rental commission in the event the property were leased by the company. In this case, the commission would be paid to the company, not the salesman, and would be deposited to the company's escrow account for later split with the associate involved. At no time would it be appropriate for the sales associate to collect and disburse funds without going through the broker and he would not do it that way. He did not authorize it here. Mr. Arn admits to having written at least one check to Respondent from money's received from the tenant for work to be done on the Plihcik property. He released that money only after he received a letter from Mr. Plihcik authorizing the release of funds to Respondent. All the money he received from the checks he received in August, 1991, in the amount of $600.00, was paid out to Respondent for repair costs. When he subsequently received a letter from Mr. Plihcik regarding cash which Respondent claimed he had mailed directly but which was not received, Mr. Arn replied in writing that he had not authorized Respondent to either receive or disburse funds directly. The Isabelles moved out of the house in either December, 1991 or January, 1992. By that time, Respondent had done very little work on the property. Some building materials were still on the property which Mr. Plihcik said he had left there. They are sure Respondent had not provided it. Mr. Carl Carpenter, a registered contractor and home inspector examined the property in question in March, 1992 for a potential purchaser. At that time, he found the garage in the process of being converted to a room. The framing had been installed as had the windows, and the sheet rock was partially installed. There was also a small bathroom which was not operating properly. It was his opinion that the construction was progressing from garage to room, and not the opposite. Mr. Carpenter was also of the opinion that to convert the room back to a garage would cost somewhere in the range of $600.00 and should take about 2 days. It would about double that to reinstall the bath. The bath he saw on the property was old. Respondent offered an estimate to reconvert the garage from a contractor obtained in August, 1991 which showed a total price of $1,606.00. While this is substantially more than the price cited by Mr. Carpenter, whose estimate seems rather out of line, cost is not the issue. The important part of Carpenter's testimony relates to his belief that the work in progress seemed more of conversion to a room rather than return to a garage and tends to indicate Respondent had done little if any work on the property. Ms. Sutton, the Division's investigator, interviewed Respondent 3 times regarding this matter and found his statements to be inconsistent. While he claimed he had done some work on the property and had not finished it, he could not give her the exact amount he had received from the Isabelles. He also gave her a list of what he had spent the money he had received on, but had no receipts from workers or suppliers to back it up. Mr. Danly claimed he had sent cash to Mr. Plihcik but denied receiving any cash payments from the Isabelles. He claimed he gave them receipts for what they gave him, but they have no memory of receiving any. Mr. Danley takes no issue with the facts as outlined by Ms. Isabelle except as to the remodeling of the garage which he claims is not covered by the restrictions contained in Chapter 475, Florida Statutes. He claims that the payments made by the Isabelles were authorized by Mr. Plihcik to be kept by him as compensation for the repair work on the garage and not to be transmitted to Plihcik as owner because the work needed to be done and Plihcik did not have the money to pay to have it done. He also asserts that the lease was signed by the Isabelles with the requirement in it that they would help with the work as a condition of reducing the rent. He delayed starting on the remodeling until he got the money from Mr. Arn, which, at least in part, was as early as August 29, 1991. When he got that check, he started work. Originally, he states, he hired 2 young men to do the dry-wall, but the bathroom had to be framed before the dry wall could be installed. Then the water heater was installed and the power line installed for that, all of which he claims he did himself. The framing and closing up of the old door to the kitchen was done by Respondent with the assistance of a contractor. All of this, he asserts, was done in September and October, 1991, contrary to the Isabelle's claim that the only work done prior to their departure was the installation of some dry wall. Some materials were already in place but some of that had been damaged and had to be replaced. He claims he had 3 helpers to do all this work and paid them in cash. The sink was put back into its original position and he got the material to reinstall the toilet which he was unable to do because of back problems. Mr. Danley denies ever asking the Isabelles for cash or loans. He claims the only payments he received were in the form of checks payable to him or to Arn, and all money received from them was used for the work. He also admits to collecting the rent due in October which, he claims, was used for the restoration project. The only checks introduced into evidence not payable to Arn or Danley are 3 payable to Kash & Karry and of these, two are endorsed by Daniel Isabelle and one bears no endorsement at all. These are the checks which Ms. Isabelle claims were made to provide cash for Respondent at his request. Taken together, the evidence as presented by both sides tends to support Ms. Isabelle's story. Mr. Danley claims he did not finish the work because he could not find a door for the garage. He claims to have called many places but was unable to find a single garage door. A call to a Scotty's building supply store in that area revealed a single garage door was readily available, though by special order. Finally, he bought one from a builder in St. Petersburg for $235.00 which was paid in cash. The price included installation the following morning, and the site was already prepared. However, the builder never showed up with the door and he lost the payment. On balance, Respondent's account of the matter, unsupported as it is by any direct evidence beyond his own testimony, is found to be less than credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore, recommended that a Final Order be issued by the Florida Real Estate Commission suspending Respondent, Paul Andrew Danley's license as a real estate salesman in Florida for a period of 3 years under such terms and conditions as are considered appropriate by the Commission; imposing a total administrative fine of $2,000.00; and imposing a reprimand. RECOMMENDED this 1st day of March, 1993, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 March, 1993. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-5598 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: 1. & 2. Accepted and incorporated herein. 3. & 4. Accepted and incorporated herein. 5. Accepted. 6. - 8. Accepted and incorporated herein. 9. Accepted and incorporated. 10. & 11. Accepted and incorporated herein. 12. & 13. Accepted and incorporated herein. 14. Accepted and incorporated herein. 15. & 16. Accepted and incorporated herein. 17. Accepted but redundant with 4. 18. Accepted and incorporated herein. 19. - 22. Accepted and incorporated herein. 23. Accepted. 24. & 25. Accepted. 26. Accepted but not material to any issue. 27. Accepted and incorporated herein. 28. - 30. Accepted and incorporated herein. 31. - 33. Accepted and incorporated herein. 34. Accepted and incorporated herein. 35. Accepted but mot material to any issue. 36. & 37. Accepted and incorporated herein. 38. - 40. Accepted. 41. Accepted and incorporated herein. 42. Accepted and incorporated herein. 43. - 46. Accepted and incorporated herein. 47. Accepted. 48. - 53. Accepted and incorporated herein. 54. - 56. Accepted and incorporated herein. 57. Accepted. FOR THE RESPONDENT: 1. A - E. Considered more to be either argumnent on the state of the evidence or conclusions of law. Not accepted as a statement of fact as finally found. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street, Suite N-308 P.O. Box 1900 Orlando, Florida 32802-1900 Gilbert P. McPherson, Esquire 1822 Drew Street, Suite 8 Clearwater, Florida 34625 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 West Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
Findings Of Fact At all times pertinent to the issues herein, the Petitioner was the state government licensing and regulatory agency charged with the responsibility to prosecute Administrative Complaints alleging misconduct by practitioners of the real estate profession in this state. The Florida Real Estate Commission is the state agency responsible for licensing real estate sales persons and brokers in Florida and for regulating the real estate profession in this state. By Administrative complaint dated May 1, 1992, Respondent and Nicholas G. Patsios were charged with various violations of Section 475.25(1), Florida Statute. At the time, Respondent was a licensed real estate salesperson at Gulf Beaches Realty, Inc. (Gulf Beaches) in Holmes Beach. Gulf Beaches was licensed as a real estate broker for which Mr. Patsios was the qualifying broker. However, Respondent was actually the owner of Gulf Beaches and registered as an officer of the corporation. On January 16, 1992, an investigator for the Department had attempted to audit Gulf Beaches' escrow account but could not do so because the records were not in order. This was the impetus for the investigation into the operation which resulted in the filing of the Administrative Complaint. Respondent actually operated the brokerage, and in the Administrative Complaint was alleged to have been registered as an officer of a brokerage corporation while licensed as a salesperson. She was also charged with having operated as a broker while licensed as a salesperson. By Final Order dated August 18, 1992, the Florida Real Estate Commission found Respondent guilty of the alleged misconduct, fined her $100.00, reprimanded her and placed her on probation for one year conditioned, inter alia, upon her not violating any other provisions of Chapter 475. On May 21, 1993, the Department again charged Respondent with violations of Chapter 475, alleging that she: (1) continued to operate as a broker while licensed as a salesperson; (2) operated as a broker without holding a valid broker's license and (3) violated an order of the Commission. Though the matter was referred to the Division of Administrative Hearings, Respondent failed to respond to the Administrative Complaint, and pursuant to a motion to relinquish jurisdiction, the matter was returned to the Commission. Thereafter, by Final Order dated November 7, 1993, the Commission revoked Respondent's license as a salesperson. In the interim between that action and the filing of the instant Administrative Complaint, Peggy Jean Lasser, a licensed broker, became the qualifying broker for Gulf Beaches. She allowed Respondent, the owner of the brokerage, to control its operations, including interfacing with clients. When the Commission initiated action against Ms. Lasser for that infraction, she did not dispute the allegations, and as a result, by Final Order of the Commission dated August 15, 1995, her license was suspended for two years. Ms. Lasser immediately ceased operating as the broker for Gulf Beaches. To the best of her knowledge, however, Gulf Beaches is still operating as a real estate office without a broker, and Respondent is still operating as a salesperson without a broker. On July 29, 1996, George Sinden, an investigator for the Department, went to Gulf Beaches' office accompanied by another investigator. He found the door to the office open and Respondent seated at a desk beside the door. She was alone in the office. There were office machines present and it appeared to Sinden that the office was operating as a real estate office. During his visit, Mr. Sinden could find no one with a valid license as a broker or salesperson. Respondent indicated she was trying to find a broker to qualify the company. She admitted she was currently operating a real estate business. Respondent also indicated she had four rentals which she was managing and for which she was depositing funds into a trust account for the owners. She also claimed to have an escrow account with over $2,000 in it. Sinden found that Respondent was not complying with the Commission's monthly reconciliation requirements and he could not determine to whom the funds in the escrow account belonged. Respondent claims this money was deposit money placed by a prospective purchaser in a sale between two parties, both of whom trusted her to hold the funds. She claims she was to receive a 5 percent fee. Records of Secretary of State's office showed Ms. Lasser as the only officer of Gulf Beaches. However, she no longer holds a valid broker's license. Respondent indicated she was the sole owner of Gulf Beaches. She claimed when Sinden interviewed her and at the hearing, where she again admitted the matters set forth above and in the Complaint, that she has not take in any new business since Ms. Lasser left. Respondent admits that she has attempted to divest herself of her clients but claims that because the Complaints filed against her by the Department have damaged her reputation, no broker will work with her or her business since the action in 1992. Respondent either cannot or will not accept the fact that she is operating illegally. Her primary concern seems to be the fact that this business is her way of making a living. She is 80 years old and seeks only to operate for two more years, at which time she will "meet her maker." The evidence is clear that since 1992, and before, Respondent has been the owner of Gulf Beaches. From the departure of Mr. Patsios to the incumbency of Ms. Lasser, and after the departure of that individual up to the present, Respondent has operated the corporation without a broker. It is also clear that since November 1993, Respondent has operated as a salesperson without a valid license.
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 Respondent guilty of the misconduct alleged in the Administrative Complaint and, consistent with the provisions of Section 455.228, Florida Statutes, impose an administrative fine in the amount of $2,500.00. DONE and ENTERED this 3rd day of September, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 3rd day of September, 1996. COPIES FURNISHED: Steven D. Fieldman, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, N308 Post Office Box 1900 Orlando, Florida 32802-1900 Geraldine Ruesel, pro se 5351 Gulf Drive Holmes Beach, Florida 34217 Lynda Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares, Division Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900
Findings Of Fact At all times material hereto, Respondent, Ralph B. Snyder, Jr. ("Respondent"), was a licensed real estate broker having been issued license No. 0082998. Respondent was the qualifying broker for Home Hunters V, Inc., a corporate real estate broker having been issued license No. 0221795, with a principal business address of 2829 Okeechobee Boulevard, West Palm Beach, Florida. In September, 1981, Respondent registered Home Hunters V, Inc., as a real estate brokerage corporation, with himself as qualifying broker. The office remained open until April, 1982. Respondent was not present in the West Palm Beach office of Home Hunters V on a full-time basis because, in addition to that business, he was involved in a construction business on Sanibel Island, Florida. In late September or early October, 1981, Respondent hired Greg Howle to manage the Home Hunters V office in West Palm Beach. At all times material hereto, Howle was not registered as either a broker or salesman. Respondent's business, insofar as here pertinent, consisted of maintaining card files of rental properties available in the West Palm Beach area, and advertising availability of those properties for the owners. When a prospective tenant came to Respondent's office in response to advertisements or otherwise, those tenants would sign an agreement with Home Hunters V, Inc., and, after payment of a $60 fee, would be furnished information concerning available properties in the area that generally conformed to the types of properties prospective tenants were seeking. The standard procedure in Respondent's office was that the prospective tenants would first meet with Greg Howle, the office manager, who would have them execute the agreement with Home Hunters V, Inc., collect the $60 fee from them, and then refer prospective tenants to other office employees. Among these other office employees were Ilana Frank, a licensed real estate salesperson who began employment with Respondent in late September or early October, 1981, and Sheryl Kimball, an unlicensed employee, who was employed by Respondent on or about October 16, 1981, and continued as an employee until about November 29, 1981. Respondent testified that Ms. Kimball was hired as a receptionist and, in addition, performed general clerical responsibilities in the office, including greeting potential customers and referring them to licensed salespersons. The record in this cause establishes that Ms. Kimball did, on at least two occasions, speak with persons on the telephone concerning sales, and on both of those occasions she was reprimanded by Respondent for acting outside the scope of her employment. Ms. Kimball was never directed by Respondent to negotiate the rental of any real property nor does this record establish that Respondent knew of Ms. Kimball's engaging in any such activity. Respondent testified that Ms. Kimball was paid $150 per week for her services, and, in addition, was compensated for any overtime work she might have performed. Ms. Kimball testified, however, that she was paid $150 per week together with $3.00 for each contract she negotiated. However, Ms. Kimball could identify only one such contract on which she worked. With regard to that contract, which involved a customer named Paul Palmero, Respondent never received any funds, and the record in this cause does not reflect that any services were ever performed for Mr. Palmero. Further, the entire Palmero transaction was conducted in the presence of another of Respondent's employees, Ilana Frank, who, as indicated above, was a licensed salesperson. Accordingly, there is insufficient credible evidence of record in this cause to establish that Sheryl Kimball ever negotiated the rental of real property or interest therein; procured lessees of the real property of others; or performed any of the acts of a broker or salesman as alleged in the Administrative Complaint. Further, the record in this cause contains no evidence establishing the amounts actually paid to Ms. Kimball during the six-week period in which she was employed by Respondent. In reaching this conclusion, the Hearing Officer has taken into account the testimony and interests of both Ms. Kimball and Respondent in the outcome of this proceeding in attempting to reconcile the direct conflicts in their testimony. Ms. Kimball was discharged from Respondent's employ after having received two reprimands and having been accused of misappropriating funds. Thereafter, Ms. Kimball filed a complaint against Respondent with the Florida Real Estate Commission. Conversely, Respondent obviously has an interest in retaining his license as a broker. When viewed as a whole, it is concluded that facts of record in this cause with respect to Counts I and II are qualitatively and quantitatively insufficient to establish the factual allegations contained therein. Count III of the Administrative Complaint alleges that Respondent ". . . inserted or caused to be inserted fraudulent, false, deceptive or misleading advertisements in the Post and Evening Times newspaper of West Palm Beach, Florida." The same count further alleges that those advertisements were fraudulent, false, deceptive or misleading ". . . in that the content thereof stated to the public that respondents had available for lease through their firm various rental units at stated prices when in fact rental units of the advertised type were not available through their firm at the stated price." There is no evidence of record in this proceeding that would in any way establish the facts alleged in Count III of the Administrative Complaint. In fact, the only evidence of record on this issue is the testimony of Ms. Kimball that she observed Mr. Howle, the office manager, copying listings from Fort Myers newspapers for use in the West Palm Beach area. However, Ms. Kimball conceded that she did not know if any such ads were ever placed in the West Palm Beach newspaper. No such advertisements were introduced into evidence in this proceeding from which any comparison to any of the listings available through Respondents could be made to determine whether the ads were fraudulent, false, deceptive, or misleading. County IV of the Administrative Complaint charges the Respondent with having solicited and accepted money as advance rental fees with knowledge that rental units of the type and price desired by potential tenants were not available through Respondent's firm, and with making false representations as to the availability of rental units. Again, there is no evidence of record in this cause to establish a single, identifiable instance in which Respondent either individually or through its employees represented that rental units were available of a type and price that were not in fact so available.
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 imposing on Respondent, J. Kent Staley, a $1500 fine, payable within six months, and, starting in six months, suspending his license as a real estate broker for up to 10 years or until the fine is paid in full, whichever first occurs. RECOMMENDED this 9th day of June, 1987, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1987.
The Issue Whether Respondents' licenses as real estate brokers should be suspended or revoked, or the licensees otherwise disciplined, for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint, dated September 28, 1981. This proceeding is based on an administrative complaint filed by Petitioner, Board of Real Estate, alleging that Respondents, while engaged in a rental service business which advertised and sold rental property information or lists, for an advance fee to prospective lessees, utilized a contract or receipt agreement which included language defining when a "rental has been obtained" that was contrary to the intent of Rule 21V-10.30, Florida Administrative Code, and that therefore Respondents had violated Subsection 475.453 and 475.25(1)(b), Florida Statutes. It further alleged that Respondents failed to refund 75 percent of an advance fee to specific prospective tenants as required by Subsection 475.25(1)(e), Florida Statutes and therefore constituted a violation of Subsection 475.25(1)(d), Florida Statutes. At the commencement of the hearing, the parties submitted a Proposed Stipulation of facts which was accepted by the Hearing Officer and constitutes the Findings of Fact hereinafter. No witnesses testified at the proceeding nor were any exhibits entered in evidence other than the four exhibits attached to the Stipulation. (Exhibit 1)
Findings Of Fact Respondent Jack Braunstein is a licensed real estate broker having been issued license number 0146924. The last known address of this Respondent is 916 North Federal Highway, Fort Lauderdale, Florida 33304. Respondent Rent Aid, Inc., is a licensed corporate real estate broker having been issued license number 0133234. The last known main office address of Rent Aid, Inc., is 916 North Federal Highway, Fort Lauderdale, Florida 33304. At all times material herein Respondent Braunstein was the sole active broker of and for Respondent Rent Aid, Inc., doing business at the corporate main office located in Fort Lauderdale, Florida. As said active broker, Braunstein was responsible and liable for the acts and/or omissions of the associates of Rent Aid, Inc. performed in the scope of their employment; and was responsible and liable for the acts and/or omissions of Rent Aid, Inc. At all times material herein, Respondent Rent Aid, Inc., was engaged in a full service real estate brokerage business which included representing potential buyers and sellers of real property and potential landlords and tenants with regard to rental properties. As part of the business Rent Aid, Inc. entered into contracts with prospective tenants for an advanced fee, as shown by Exhibit "A" to the Complaint and incorporated herein by reference. That the contract or receipt agreement forms provided by the Respondents, have inserted therein additional language as to specifically stating that "a rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. On or about September 16, 1980 Jan Spear and Deborah Nigro entered into the contract, an accurate copy of which is appended to the Complaint as Exhibit "A", with Rent Aid, Inc. That under the terms of the contract, Respondent had the discretion to refuse any and all refunds if they had shown to the prospective tenant an available rental unit which met the terms specified and requested by the prospective tenant, even if the prospective tenant declined to rent said unit and demanded a refund of the paid fee within the required time frame. That Respondent's practice was to refuse demands for refund made where, in Respondent's opinion, a bona fide effort had been made to obtain a rental, which efforts had been unsuccessful through no fault of Respondent's. Jan Spear and Deborah Negro made written demand upon Respondent's for a partial refund of the fifty ($50) fee which they had paid Respondent's pursuant to the contract. This demand was made within thirty days of the contract date as shown by therefund refusal dated October 12, 1980, attached to the Complaint as Exhibit "B" and incorporated herein by reference as true and accurate. The contract utilized by Respondent's does not strictly conform to the refund required by Rule 21V-10,30 in that the conditions under which a refund would be payable are restricted beyond the scope of said Rule, and SS 475.453(1), Florida Statutes. Respondent utilized the Contract form in question in reliance upon advice received from his prior counsel, Gregory Jones, as shown by a letter dated April 1, 1980. A true and accurate copy of which is attached hereto as Exhibit "C". Sal Carpino, attorney for the Department of Professional Regulation, had been provided with a copy of the form utilized by Respondent and had approved the format of said form without approving a discrepancy of the language in question in this proceeding, to wit: "a rental has been obtained with company (Rent Aid, Inc.) provides a guaranteed available rental unit upon the terms specified and requested by members." In response to this proceeding, Respondent has made full and complete refund to Jan Spears and Deborah Nigro and has agreed to voluntarily stop all use of the Contract form in question, and use only such a form as strictly complies with 475.453(1) and Rule 210-10.30 and to furnish a copy of said form to the Department conformance with said Rule."
Recommendation That the Board of Real Estate issue a private reprimand and impose a $100 fine against Respondents Jack Braunstein and Rent Aid, Inc. for violation of Subsections 475.25(1)(d) and (e), Florida Statutes. DONE AND ENTERED this day of March, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire Suite 101 2715 East Oakland Park Boulevard Ft. Lauderdale, Florida 33306 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Frederick H. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C.B. Stafford, Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801
Findings Of Fact The Respondent is a licensed real estate salesman, having been issued license number 0073256 authorizing his practice in such a capacity in the State of Florida. The Petitioner is an agency of the State of Florida charged with enforcing the licensure and practice standards embodied in Chapter 475, Florida Statutes, for realtors in the State of Florida. From approximately April 16, 1977, through November 17, 1977, the Respondent, acting in the capacity of a real estate salesman, was employed by a broker by the name of Irwin Kane and Wintex Realty Corporation of Miami, Florida. That entity with Broker Kane was involved in the advertisement, promotion and sale of parcels of unimproved land in west Texas. The Respondent's duties involved making long-distance telephone calls to prospective purchasers of that land (in Cochran County, Texas), attempting to induce them to buy one or more parcels. In the course of this telephone sales campaign, in which the Respondent participated with approximately 20 salesmen making such phone calls, the Respondent used a script prepared for him by Irwin Kane, his employing broker. The script, in general, extolled the attributes of the unimproved property in an arid region of west Texas, representing that the land possessed favorable climatic conditions, water supply and soil conditions for agricultural purposes and was near property in which oil companies were interested. The Respondent contacted a potential buyer by phone who lived in Wisconsin and attempted to persuade the buyer to purchase a parcel of the property through use of the prepared "script" given him by his broker. That potential customer apparently became suspicious of the sales method, manner or assurances given by phone and ultimately was instrumental, along with the United State Attorney, in the filing of an indictment in the United States District Court for the Eastern District of Wisconsin, charging the Respondent (along with his broker, principals of the corporation and other salesmen) with the use of wire communication in furtherance of a scheme to defraud potential purchasers of real estate in violation of Title 18, United States Code, Section 1343. In that proceeding, the Respondent initially professed his lack of knowledge of the truth or falsity of the representations made in the prepared script his broker gave him and required him to use concerning the attributes of the west Texas land involved. Due in part to a dearth of financial resources to devote to litigation, the Respondent ultimately pled nolo contendere on November 7, 1978, to the charge involving using wire communication in a scheme to defraud. He was ultimately found guilty and was placed on probation for three years, with imposition of a sentence of imprisonment being suspended by the court. The Respondent had no part in the preparation of any written materials or "script" which he employed in making the telephone conversation and representations describing the supposed attributes of the property he was attempting to market on behalf of his employer, Broker Irwin Kane and Wintex Realty Corporation. That script was prepared by his broker or others and the Respondent read or consulted from it as he was communicating with prospective purchasers, but had no actual knowledge of its truthfulness or falsity with regard to the representations contained therein. He was shown to have made no representation or verbal communication which he knew to be false when he made it. The Respondent has been the subject of a disciplinary proceeding involving the same factual transaction in the past which culminated in a final order dismissing that administrative complaint. 1/
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law and the evidence in the record, it is RECOMMENDED: That the Respondent, Ed Rich, be found guilty of a violation of Section 475.25(i)(f), Florida Statutes, and that the penalty of a two (2) year suspension of licensure be imposed. DONE and ENTERED this 31st day of October, 1983, in Tallahassee, Florida. P. MICHAEL RUFF 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 31st day of October, 1983. COPIES FURNISHED: Joel S. Fass, Esquire 626 Northeast 124th Street North Miami, Florida 33161 Mr. Ed Rich 1950 South Ocean Drive Hallendale, Florida 33009 Randy Schwartz, Esquire Assistant Attorney General Department of Legal Affairs Suite 212 400 West Robinson Street Orlando, Florida 32801 Fred M. Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Petitioner is the state licensing regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated pursuant thereto. During times material, Respondent was a licensed real estate salesman in Florida, having been issued license number 0319604. The last license issued Respondent was as a salesman, c/o Referral Realty Center, Inc. (herein Referral) at 8974 Seminole Boulevard, Seminole, Florida. On December 1, 1988, Respondent entered into a management agreement with Madeira Beach Yacht Club Condominium Association, Inc. (herein Madeira) to serve as property manager. Respondent assumed the property manager position with Madeira in June of 1987, which was formalized by a written agreement in December 1988. While acting as property manager for Madeira, Respondent handled the rental transactions of individual units for owners. In return for her services, Respondent was compensated based on a commission of 10% to 20% of the monthly rental. On at least one occasion, Respondent rented an individual unit for owners for a term greater than one year. Respondent was aware that she was renting the one unit for a term in excess of one year. Respondent signed leases for units belonging to individual owners as the rental agent or representative. Respondent used the commissions that she received to defray operating expenses for her rental business such as cleaning fees for the units and for personal compensation. Respondent maintained a bank account at the First Federal of Largo Savings and Loan Association entitled "Dorothy K. Livingston Rental Account" for her rental business. Deposits to that account were rental monies received from tenants from which disbursements were made to unit owners and the remaining commissions went to Respondent as compensation. The rental account maintained by Respondent was neither an account with her employing real estate broker, nor was it an escrow account. Respondent placed security deposits that she received from tenants in the referenced rental account that she maintained. Respondent did not inform her employing broker of the receipt of security deposits nor did she discuss with her employing broker any of her activities involving rental of units for owners at Madeira. However, there is credible testimony evidencing that her broker was knowledgeable of Respondent's activities relative to her rental of units for owners. During May 1989, Respondent placed her real estate license with Referral Realty Center (Referral) as her employing broker. She did so in order to receive payment for referring prospects to Referral. On or about May 22, 1989, Respondent entered into an independent contractor agreement with Referral. That agreement provided in pertinent part that: Independent contractor agrees that Independent contractor will not list any real estate for sale, exchange, lease or rental... . Independent contractor agrees to refer all prospective clients, customers, buyers and sellers of which Independent contractor becomes aware to the Center... . Independent contractor agrees that so long as this Agreement is in force and effect the Independent contractor will not refer any prospective seller or buyer to another real estate broker... . 9. Independent contractor agrees to act, and to represent that he or she is acting solely as a referral associate of the Center... . While employed by Referral, Respondent also received commissions from individual unit owners at Madeira. During the time when Respondent had her license listed with Referral, she also received commissions from Referral for prospects she generated while renting units for owners and acting as property manager at Madeira. Respondent received a copy of a letter from attorney R. Michael Kennedy, addressed to J.L. Cleghorn of Building Managers International, Inc., dated September 5, 1989. In that letter, attorney Kennedy expressed his opinion that condominium or cooperative managers are exempted from the licensing provisions of Chapter 475, Florida Statutes, and that receipt of a percentage of rental proceeds would not be precluded even if the manager was salaried. The Kennedy letter erroneously states support for attorney Kennedy's opinion by Alexander M. Knight, Chief of the Bureau of Condominiums, and Knight so advised attorney Kennedy of that erroneous support by a subsequent letter to him. It is unclear to what extent Respondent apprised attorney Kennedy as to the specifics of her activities and to what extent she relied on his opinion prior to engaging in her property manager's rental and referral activities. (Petitioner's Exhibit 7.) Respondent did not seek advice from Petitioner as to whether her activities fell within the guidelines of Chapter 475, Florida Statutes. Respondent is familiar with the statutory definitions of a broker and salesman and what activities constitute brokerage and sales activities. During times material, Respondent's employing broker, David Hurd, was a licensed real estate broker in Florida, and the broker of record for Referral for procuring prospects and making referrals of real estate activities. Employment under an independent contractor agreement is considered employment under Chapter 475, Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a Final Order imposing an administrative fine against Respondent in the amount of $1,500.00, issue a written reprimand to her, place her license on probation for a period of one (1) year with the further condition that she complete 60 hours of continuing education. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL 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 31st day of May, 1991. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jerry Gottlieb, Esquire GOTTLIEB & GOTTLIEB, P.A. 2753 State Road 580, Suite 204 Clearwater, Florida 34621 Darlene F. Keller, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Rules 7D-30.04, 7D-30.06, 7D-31.01(2), 7D-31,01(4), 7D-31.01(5), 7D-31.01(12), 7D-32.01 and 7D-32.02, Florida Administrative Code, constitute an invalid exercise of delegated authority and are arbitrary and capricious?
Findings Of Fact The following findings of fact were stipulated to and are hereby adopted: The following is a Florida non-profit corporation, whose address is 115 N. Calhoun Street, Tallahassee, Florida. The FMHA is organized and maintained for the benefit of its members, which includes approximately 950 mobile home park owners and operators. A substantial portion of these members own or operate parks which contain 10 or more lots and therefore are subject to regulation by the Division of Land Sales, Condominiums and Mobile Homes, Department of Business Regulation. The Division of Land Sales, Condominiums and Mobile Homes, Department of Business Regulation is delegated the authority pursuant to Chapter 723, Florida Statutes, to regulate mobile home parks, including the powers to enforce and ensure compliance with the provisions of the Chapter and rules promulgated pursuant thereto, including the authority to impose a civil penalty against a mobile home park owner for any violation of the Chapter, or a rule or regulation of the Division. Chapter 723, Florida Statutes, was enacted by the Florida Legislature as Chapter 84-80, was signed by the Governor and filed in the office of the Secretary of State on June 4, 1984. Rules 7D-30, 7D-31, and 7D-32, Florida Administrative Code, are rules of the Division of Land Sales, Condominiums and Mobile Homes, Department of Business Regulation, which were properly adopted in accordance with Chapter 120, Florida Statutes. The Petitioner is a trade association the members of which are engaged in business in the mobile home industry in the State of Florida. The Petitioner has members who are mobile home manufacturers, retailers, equipment suppliers and servicers, owners and operators of mobile-home rental parks, developers of mobile home parks and subdivisions, insurance firms and lending institutions. The Petitioner has 1,020 members who develop mobile home parks and subdivisions or are owners and operators of mobile home rental parks. As stipulated to by the parties, approximately 950 of the Petitioner's members are owners and operators of mobile home rental parks. The Petitioner's members are involved in the rental of between 300,000 and 350,000 mobile home spaces. A substantial number of the Petitioner's members are subject to regulation by the Respondent pursuant to Chapter 723, Florida Statutes (1985), the "Florida Mobile Home Act." In July of 1984, subsequent to the effective date of Chapter 723, Florida Statutes (1985), the Bureau of Mobile Homes was created as a part of the Division of Florida Land Sales, Condominiums and Mobile Homes. Dr. Faye Mayberry has been, and continues to be, the Chief of the Bureau of Mobile Homes. Following the enactment of Chapter 723, Florida Statutes (1985), the Bureau of Mobile Homes concluded that there was a need to clarify certain portions of Chapter 723, Florida Statutes (1985), and a need to establish procedures necessary for the filing of prospectuses and other documents. Therefore, the Bureau initiated a process to determine what rules needed to be adopted. The Bureau also received numerous inquiries from mobile home owners and mobile home park owners concerning Chapter 723. The Bureau first looked at Chapter 723 in-house and looked at the nature of inquiries it had received and then drafted a conceptual approach to part of the rules. The conceptual draft, at the invitation of the Bureau, was reviewed by representatives of the Petitioner and the Intervenor. A meeting was held with the Respondent to discuss the conceptual approach. The Respondent left the meeting with the impression that the conceptual approach was not that far off. Following its discussions of the conceptual approach with the Petitioner and Intervenor, the Respondent drafted rules pursuant to Chapter 723. Four workshops, in three locations in Florida, were conducted to receive public input on the draft rules. Advance notice of the workshops was published in the Florida Administrative Weekly. Representatives of the Petitioner had notice of, and participated in, the workshops. Subsequent to the public workshops, in October of 1934, the Respondent published proposed rules under Chapters 7D-30 and 7D-31, in the Florida Administrative Weekly. In November of 1984, the Respondent published proposed rules under Chapter 7D-32. After publication of the proposed rules in the Florida Administrative Weekly, requests for a public hearing were received by the Respondent and public hearings were held. Representatives of the Petitioner attended these hearings and had an opportunity to provide input on the content of the proposed rules. Revisions were made to the proposed rules based upon suggestions from the Joint Administrative Procedures Committee and comments made by the public during the hearings held by the Respondent. The revisions were published in the Florida Administrative Weekly in January of 1985. As revised, the rules contained in Chapters 7D-30 and 7D-31, Florida Administrative Code, became effective on January 10, 1985. The rules contained in Chapter 7D-32. Florida Administrative Code, became effective on February 6, 1085. The Joint Administrative Procedures Committee did not file any challenge to the rules after they became effective. A substantial amount of input and work went into adopting Chapters 7D-30, 7D-31 and 7D-39, Florida Administrative Code. The Petitioner had notice of the promulgation of the rules at issue and has been involved in the development and distribution of information it believed was necessary to assist its members in complying with the requirements of Chapter 723. The Petitioner has distributed memoranda, conducted seminars, distributed prospectuses and communicated with representatives of the Respondent in an effort to assist its members in complying with the requirements of Chapter 723. The Petitioner provided definitions of terms for use in prospectuses and notices required by Chapter 723 and for use in complying with the Respondent's rules. The Petitioner has attempted to assist its members in preparing a prospectus which could be filed with the Respondent and would meet the requirements of Chapter 723. Toward this end, the Petitioner prepared a sample or model prospectus and conducted a seminar on the model prospectus on December 17, 1984. The seminar was conducted in Orlando, Florida, and was attended by over 600 people. In the model prospectus the Petitioner provided three alternative methods of providing for future rental increases to be included in a prospectus. The model prospectus discussed at the December 17, 1984 seminar was for use by those mobile home parks with 100 or more rental spaces. The Petitioner also prepared a model prospectus for mobile home parks with 26 to 99 rental spaces which it distributed in June of 1985. This model prospectus was sent to all members of the Petitioner. A large number of the Petitioner's members used the model prospectus prepared by the Petitioner. Information provided to members by the Petitioner was developed by the Petitioner based in part upon its discussions with the staff of the Respondent. The Petitioner received questions from its members concerning certain aspects of the Respondent's rules and Chapter 723 which the Petitioner attempted to answer. A substantial number of the Petitioner's members advertise their mobile home parks. Mr. Neil Kullman is a member of the Petitioner and is the President of Florida Leisure Communities. Florida Leisure Communities owns and operates 3 mobile home parks in Florida. Florida Leisure Communities waits for the Respondent to approve advertising materials it files with the Respondent because it has decided that it does not want to risk using an advertisement which may be found to be defective by the Respondent. Florida Leisure Communities does not wait for approval of its advertisements by the Respondent because it believes that it is required to do so by the Respondent's rules. Time delays have been experienced in getting advertisements approved. A substantial number of the Petitioner's members have rental agreements in existence at mobile homes parks which have anniversary dates or renewal dates which would allow increases in rent. Most of the rental agreements have renewal dates or anniversary dates of July 1 or January 1. The Petitioner provided information to its members in March of 1985 and August of 1985 concerning the Petitioner's understanding of what constitutes an effective notice of lot rental increase. In explaining how members can provide a concise explanation of the reason for a proposed lot rental increase, the Petitioner told its members the following in a memorandum distributed in March of 1985: You need only to provide a concise explanation of the reason for the proposed change. Be brief! You should only include a list of factors (for rent increases), or a short plain statement for the change in services or rules or regulations. Important! As for rent increases, the rule limits the factors you may consider to those specifically identified in the prospectus. If the homeowners go to mediation or arbitration, or to court, then only those factors identified in the prospectus can be used to justify the reasonableness of the increase. Also, you should only place on the notice of increase the category of factor used to determine the rent increase level. For example: Operating costs; Prevailing market rent; Prevailing economic conditions; or Consumer Price Index (CPI). Be sure to list only those factors which are necessary to fully justify the rent increase. In August of 1985 the Petitioner provided the following guidance to its members with respect to how to provide a concise explanation of the reason for a lot rental increase: 4. You need only to provide a concise explanation of the reason for the proposed increase. Be brief! You should only include a list of factors, or a short plain statement of the reason or reasons for the increase. For example, a response might be: "The reasons for the increase are increased operating costs, prevailing market rent, and prevailing economic [sic] conditions, as set forth in the prospectus." You need not to go [sic] into great detail as to the specific costs which may have increased during the course of the year which you may want to take into consideration, or do you need to explain what is intended to mean [sic] by prevailing market rent or prevailing economic conditions. You need only to include a concise explanation of the reasons for the increase. The recommendation of the Petitioner to its members concerning how to provide a concise explanation of an increase in lot rental was basically that the member refer to factors which might cause a rental increase as provided in the member's prospectus. In the model prospectus recommended by the Petitioner to its members in June of 1985, the Petitioner recommended that the following explanation of the manner in which lot rental could be increased should be used by its members: is as follows: Increase in Lot Rental The manner in which lot rental will be increased, Definitions. As used in this Section VIII: "Lot rental" means all sums paid or to be paid by the mobile home owner in consideration of leasing or renting a mobile home lot or lots in the Park. Such sums include any and all rents, special use fees, pass-through charges, installation and set-up charges, and other fees, charges and assessments imposed by the Owner. "Special use fees" mean those separately itemized amounts for specific services or privileges which are charged in addition to rent, including, but not limited to, such charges as guest fees, pet fees and entrance fees. "Pass-through charges" are defined as those amounts, other than special use fees, which are itemized and charged separately from the rent and which represent the mobile home owner's share of costs charged to the Park Owner by any state or local government or utility company. Notice of Increase. The mobile home owner shall be notified of any increase in the lot rental at least 90 days prior to the effective date of such increase. Lot Rental-Increases. General. The lot rental and each of the categories of charges current Iv or hereafter comprising a part of the lot rental are subject to periodic increases by the Owner. However, except for increases resulting from the imposition of pass-through charges, the lot rental will not be increased more frequently than annually, except for initial tenancies which commence after the beginning of the annual rental term. Factors Affecting Increases. Factors which may affect the level of increases in lot rental are as follows: Increased costs, which refers to any increases experienced by the Owner since the delivery of notice of the last increase in the lot rental in the total costs arising out of the ownership, operation and management of the Park. Prevailing Market Rent--Refers to the lot rental imposed in mobile home parks comparable to this Park, or the lot rental willingly paid from time to time by new residents of this Park. A park will be deemed comparable if it is located in the same general vicinity as this Park, and offers similar densities, amenities and services. Prevailing Economic Conditions--are intended to refer to those factors which bear on the economic viability of a real estate investment and which would be considered by a prudent businessman in establishing the base rent and other charges or any increase in the amount thereof. These factors may include: the costs attendant to the replacement of this Park in the economic environment existing at the time of any rental increase, including land acquisition costs, construction costs, and losses associated with the operation of a park prior to full occupancy, and the level at which the lot rental must be established in order that the Park Owner will realize a reasonable return on the costs referred to in this clause (1); the level of interest rates and other financing charges associated with construction, interim and permanent financing; (3) the availability of alternative forms of real estate investment capital; (4) the levels of the Consumer Price Index, defined as the United States Department of Labor, Consumer Price Index, U.S. City Average--All Urban Consumers, 1967 100, or, in the event of the discontinuation of publication of the Consumer Price Index, then an alternative index which has been reasonably related to the Consumer Price Index in evaluating economic conditions, and which has been, or can reasonably be expected to be, generally accepted as a replacement index for the Consumer Price Index; (5) the level at which the lot rental must be established in order that the Owner will realize a reasonable return on the "Owners's Equity"; for this purpose, the "Owner's Equity" refers to the fair market value of the Park from time to time, less existing mortgage indebtedness; (6) other economic factors which might reasonably be expected to affect-either the value of the Park, the rate of return available to the Owner of the Park at the existing level of rent, the present value of the real estate investment in the then current economic conditions, and which would be taken into consideration by a prudent businessman in considering the amount of rental increase required in the Park in order -to realize a rate of return similar to other at risk real estate ventures from the then current value of the Park. To the extent permitted by law, the mobile home owner may also be required to bear, in the form of increases in the lot rental, the costs incurred by Owner in installing capital improvements or performing major repairs in the Park. Additional Considerations The reasons for the increase in lot rental or other fees and charges will be set forth in the notice of increase. Only those factors set forth in the notice will be relied upon by the Park Owner as justification for the rent increase. The Park Owner reserves the right to amend this Prospectus or any Exhibit thereto from time to time to the extent permitted by law to conform with changes in relevant statutory provisions or changes in relevant rules of the Department of Business Regulation, or any other agency having jurisdiction over the operation of this mobile home park. An increase in one or more of the above- described factors may result in an increase in the mobile home owner's rent or other charges. Tenants assuming the remaining portion of a tenancy as prescribed by Section 723.059(3), F.S., are hereby notified that upon the expiration of the assumed tenancy, the Park Owner expressly reserves the right to increase lot rental amount in an amount deemed appropriate by the Park Owner with such increase being imposed in the manner disclosed in the Prospectus delivered to the initial recipient. A number of the Petitioner's members used the notice of lot rental increase recommended by the Petitioner and the portion of the prospectus quoted in finding of fact 33. The Respondent advised some of the Petitioner's members that the notice recommended by the Petitioner was deficient under the Respondent's rules. The notice was deficient because the Respondent determined that the notice did not provide a concise explanation of the reason for a lot rental increase. The notice used by several members of the Petitioner stated that the reason for the increase was "prevailing market conditions and economic conditions." The Respondent notified members that used this explanation that it was deficient. The Respondent also told those members that "the explanation must include the specific changes in the factors described in the prospectus under prevailing market conditions and economic conditions which were the reasons for the change." The Petitioner challenged the Respondent's interpretation of its rules concerning notices in Leon County Circuit Court. The Court advised the parties to work things out following a preliminary injunction hearing. Representatives of the Petitioner and the Respondent met and discussed the problem with the Petitioner's notice and the Respondent subsequently indicated that several examples of a concise explanation for lot rental increases proposed by the Petitioner were acceptable. The method of increasing rent provided in existing rental agreements at various mobile home parks varies. Because existing tenants have different anniversary dates or renewal dates, if notice of a lot rental increase affecting some tenants is given to all tenants of a park, it is more costly to the park owner. It is possible, however, to mail one notice of rental increase to all tenants of a park at the beginning of each year. Florida Leisure Communities has filed a prospectus for all three of its mobile home parks in Florida. The prospectuses have been approved by the Respondent. At the Colonnades, a Florida Leisure Communities park, 156 lots have been completed and 19 of those lots have been occupied. Improvements to be made by Florida Leisure Communities are specified in the prospectus for the parks. In order to keep pace with market conditions and provide different improvements, a new prospectus has to be filed with the Respondent. At Brittany Estates, another Florida Leisure Communities park, after a prospectus had been distributed to all tenants, a tornado destroyed 50 mobile homes. Most of the tenants of the 50 homes voluntarily terminated their leases. Mr. Bernie Covington is vice-president and director of the parks of Angeles Real Estate Management Company (hereinafter referred to as "Angeles"). Angeles owns and operates 13 mobile home parks in Florida. Angeles has filed a prospectus for Heritage Village, a 436 site park. The prospectus had not been approved or distributed as of the date of the hearing of these cases. Heritage Village owns and operates its own sewage treatment plant and water system. Heritage Village will be required, however, to tie into the County's water and sewage system at substantial costs. Existing leases with tenants of Heritage Village allow the park to pass the impact fees ($1,250.00 for sewage and $1,149.00 for water, per site) and the cost of tieing into the force main ($30,000.00 to $35,000.00) on to the tenants. The cost of tieing into the force main may not be passed on to the tenants under the Respondent's rules, however. Angeles has also filed a prospectus for Pleasant Living Mobile Home Park which has 218 tenants. The prospectus had not been approved or distributed as of the date off the final hearing of these cases. Angeles would now like to provide a secure area for storage of boats, RVs and cars and charge a fee for this service. The prospectus being reviewed by the Respondent, however, does not indicate that a secure area will be provided.
