The Issue The issue is whether Respondent is guilty of obtaining his license by fraud, misrepresentation, or concealment, in violation of Section 475.25(1)(m), Florida Statutes.
Findings Of Fact At all material times, Respondent has been a licensed real estate broker, holding license number 0500228. Respondent’s licensing cycle ends on March 31 every two years. He duly renewed his broker’s license prior to its expiration on March 31, 1994. During the ensuing two-year licensing term, Respondent executed on January 1, 1996, a Request for License or Change of Status and submitted the form to Petitioner. The purpose of submitting the form was to notify Petitioner that Respondent had adopted a corporate form of doing business as a real estate broker. Section A of the form contains a series of options. Respondent selected “other” and wrote in “change to corp.” Section B contains identifying information, and Respondent completed this section. Section C is irrelevant to the change that Respondent was making, and he did not fill in this section. The instructions for Section A direct the person filing the form as follows: “If this is a renewal of your license, it must be accompanied by the required fee and sign this: I hereby affirm that I have met all statutory and rule requirements regarding education for license renewal.” Respondent signed this statement even though he was not seeking a renewal of his license. The instructions for Section B told the person filing the form how to complete Section B. But these instructions required no representations. The next form generated in this case was another renewal notice, as Respondent’s license neared the end of its term, which expired March 31, 1996. This form states: “By submitting the appropriate renewal fees to the Department . . ., a licensee acknowledges compliance with all requirements for renewal.” By check dated December 30, 1995, Respondent timely submitted his license renewal fee of $95 in response to the renewal notice. He was unaware at the time that he had not met the continuing education requirement for relicensing, which called for 14 hours of education. In reliance on the implied representation that Respondent had completed the required continuing education, Petitioner renewed Respondent’s license. Later, during a random audit, Petitioner discovered that Respondent had not completed the necessary courses and commenced this proceeding. Respondent was cooperative during the audit. Upon discovering that he had not complied with the continuing education requirement, he promptly undertook the necessary coursework, which he completed by August 6, 1996.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the administrative complaint against Respondent. ENTERED in Tallahassee, Florida, on June 4, 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 4, 1997. COPIES FURNISHED: Attorney Andrea D. Perkins Department of Business and Professional Regulation Division of Real Estate Legal Section 400 West Robinson Street Suite N-308A Orlando, Florida 32801 Frederick H. Wilsen Frederick H. Wilsen & Associates, P.A. Law Office of Gillis & Wilsen 1415 East Robinson Street Suite B Orlando, Florida 32801 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900
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 Dan Lee Isaacs is a real estate broker/salesman with the Petitioner, Key Realty, Inc. He seeks in this proceeding to have approved his dual licensure as a broker for Key Realty Management, Inc., as well as to retain his broker/salesman licensure with the Petitioner, Key Realty Inc. In his capacity as a broker/salesman for Key Realty Inc., he works under the supervision of Mr. Les Epperson, who is the licensed broker for that entity. Mr. Isaacs owns no stock in the corporation, Key Realty Inc. He does own stock and would be sole manager of the separate corporation known as Key Realty Management, Inc. Key Realty Management, Inc., is not affiliated in a subsidiary or other relationship with Key Realty, Inc., although there is some commonalty of ownership in that Les Epperson is a minority shareholder. The President and majority stockholder of Key Realty, Inc., Les Epperson, would have no part in the management of the operations of Key Realty Management, Inc. Mr. Isaacs desires, for personal and financial reasons, to remain active in the real estate sales field as a broker/salesman under the supervision of broker Epperson. He would, as sole manager and broker with Key Realty Management, Inc., engage in no sales activities, but rather solely in the management and supervision of various rental properties for clients of that firm. The two corporations maintain and would maintain separate accounting books and records; and, as pertinent, separate escrow and trust funds and accounts. It is to the advantage of both firms, both financially and in terms of legal liability, to maintain these escrow funds and accounts separately because of the financial and operational differences characteristic of a real estate management firm, as compared to a purely real estate sales operation as conducted by Key Realty, Inc. The Petitioner has complied with all requirements for qualification as a real estate broker pursuant to Chapter 475, Florida Statutes, and the rules promulgated thereunder. In October, 1980, the Petitioner applied for the above described dual licensure. The Respondent denied the application on the basis that an individual cannot be a broker and a broker/ salesman simultaneously. The principals of both corporations, Mr. Epperson and Mr. Isaacs, have submitted the affidavits and agreements pursuant to Rule 2IV-6.06, Florida Administrative Code, attesting to the absence of any conflict of interest stemming from Mr. Isaacs' licensure as a broker of the separate corporation and that both of them agree and consent to the dual registration. There is no dispute between the parties that in essence a "salesman" and a "broker/salesman" perform some of the same real estate transaction functions under the supervision of a licensed broker, for instance, the depositing with the broker of any escrow or other funds involved in a given real estate transaction for appropriate disposition and disbursement by the broker and acting in all other pertinent operative capacities under the supervision of a broker, rather than independently. The parties also did not dispute that the real basis for the "broker/salesman" designation in the licensing scheme in Florida is to allow a licensee to demonstrate to the public that a broker/salesman is clothed with additional internship, educational and experience credentials and is thus possessed of a greater degree of expertise in real estate transactions and operations than one licensed as a salesman. The Respondent however, in its argument during and subsequent to the hearing, apparently takes the position that a "broker/salesman" and a salesman perform identical functions; and, therefore, are legally to be considered as the same type of license and licensee, for purposes of establishing its legal position that since a salesman's license may not be issued to a person registered as an active broker unless the active broker's license is surrendered that neither may a person be dually licensed as both a "broker/salesman" and a broker.
Recommendation In consideration of the foregoing Findings of Fact, Conclusions of Law, the evidence in the record and the pleadings and arguments of counsel, it is; therefore, RECOMMENDED that a Final Order be entered granting Dan Lee Isaacs a license as an active real estate broker for, and on behalf of, Key Realty Management, Inc., and allowing his retention of licensure as a broker/salesman with Key Realty, Inc. RECOMMENDED this 15th day of September, 1981, in Tallahassee, Leon County, 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 15th day of September, 1981. COPIES FURNISHED: W. Kirk Brown, Esquire Post Office Box 4075 Tallahassee, Florida 32303 Randy Schwartz, Esquire Department of Legal Affairs The Capitol Tallahassee, Florida 32301
Findings Of Fact At all times relevant hereto, respondent, Ezell Realty, Inc., was a licensed corporate real estate broker having been issued license number 0231943 by petitioner, Department of Professional Regulation, Division of Real Estate. Respondent, Winfield Ezell, Sr., held real estate broker's license number 0309739 issued by petitioner and was the sole qualifying broker and officer of Ezell Realty, Inc. The firm is located at 1512 West Gore Street, Orlando, Florida. Grover Crawford was an acquaintance of Ezell who was interested in purchasing certain rental property on Coretta Way in Orlando, Florida. When he was unable to purchase the property Crawford told Ezell to let him know if anything else became available in that area. Ezell happened to own a rental house at 1121 Coretta Way which he had just purchased several months earlier in a foreclosure proceeding, and the two eventually began discussions concerning a possible sale. At all times relevant thereto, the house was rented to tenants, and Crawford intended the property to remain as investor-owned property rather than owner-occupied property. Ezell initially agreed to sell the property for $70,000 and the two entered into a contract on January 8, 1983, using this sales price. However, the lender's appraisal of the residence came in far below this figure, and the parties eventually agreed on a sales price of $55,450. A second contract for sale and purchaser was executed on June 22, 1983. Although the contract provided that Crawford would pay a cash deposit of $2,300 to be held in escrow by Ezell Realty, none was paid since Ezell was given $2,300 by the tenants of the house to make needed repairs to the property prior to the sale. This arrangement was agreeable with Crawford. The contract also required the seller (Ezell) to pay all closing coats. Therefore, Crawford was not required to pay any "up front" costs in order to buy the property. Under the terms of the second contract, Crawford was to obtain FHA financing on the property in the amount of $53,150. This type of financing is the most desirable from an investor standpoint since the mortgage can be easily transferred to another buyer for a small transfer fee without lender approval. After executing the first contract on January 8, 1983, Ezell and Crawford executed an "Addendum to Contract For Sale and Purchase" on the same date which provided in pertinent part: This contract is for the sole purpose of having the buyer obtain an assumable FHA mortgage for the seller and reconveying title to the seller. The seller hereby irrevocably assumes the said FHA mortgage from the buyer immediately after closing and the buyers hereby agree to that assumption. For this, Crawford was to receive $1,000. The parties agreed that this addendum would apply to the second contract executed on June 22, 1983. At the suggestion of Ezell, Crawford made application for a $53.150 FHA loan with Residential Financial Corporation (RFC) in Maitland, Florida, a lending institution which Ezell had done business with on a number of prior occasions. However, Ezell was not present at any meetings between Crawford and RFC. When Crawford applied for the mortgage, he indicated the property would be used for investment purposes and would not be owner-occupied. For some reason, RFC assumed the property would be owner-occupied and structured the-loan in that manner. Because of this, Crawford's down payment was slightly less than 5% of the value of the property with the remainder being financed by the institution. Had RFC treated the loan as an investor-loan, the down payment would have been increased to around 15%. Neither Crawford or Ezell advised RFC of the Addendum to the contract which required Crawford to reconvey the property to Ezell for $1,000 once the FHA mortgage was obtained. Had RFC known of this it would not have approved the loan. There was no competent evidence that such an agreement was illegal or violated any federal laws or contravened any real estate industry standard or ethical consideration. The loan was eventually approved, and a closing held on September 22, 1983. After closing, Crawford retained the property in his name with Ezell making all payments from the rent proceeds. This was consistent with an oral agreement between the two that such an arrangement would last for an indefinite period as long as the payments were current. When Crawford later received several notices from the lender stating that mortgage payments were in arrears, he hired an attorney and demanded that Ezell fulfill the terms of the Addendum. He also filed a complaint against Ezell with petitioner which precipitated the instant proceeding. After the closing, Ezell had intended for the tenants to assume the mortgage since they had expressed an interest in buying the property. However, such a sale never materialized. In July, 1984, the property was reconveyed to Ezell, and Ezell paid Crawford $1,000 as required by the Addendum.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint be dismissed, with prejudice. DONE and ORDERED this 7th day of August, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, FL 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of August, 1985. COPIES FURNISHED: Arthur R. Shell, Jr., Esq. P. O. Box 1900 Orlando, FL 32802 Julius L. Williams, Esq. P. O. Box 2629 Orlando, FL 32802 ================================================================ =
Findings Of Fact The Respondent, Steven Hall, at all times pertinent hereto, was a licensed real estate salesman and broker. Upon February 15, 1984, he became licensed as a broker. The Respondent was registered with and employed by J. Arnold Ausley Realty from March 31, 1983 to February 15, 1984. J. Arnold Ausley was a licensed real estate broker and operated as Ausley Properties during times pertinent hereto. The Petitioner is an agency of the State of Florida charged with regulating the licensure and practice of realtors in the State of Florida and enforcing the practice standards for realtors embodied in Chapter 475, Florida Statutes. On February 4, 1984, the Respondent, in his capacity as a licensed salesman for Ausley Properties, arranged a contract between Champak Bhoja and Kishor Patel, as purchasers of a certain piece of real estate owned by one John D. Gilbert. In connection with that contract the Respondent obtained a $2,000 check as a deposit from Mr. Patel. At Mr. Patel's request the Respondent held this check without negotiating it awaiting Patel's instruction that sufficient funds were on deposit to honor the check. The Respondent waited four weeks and received no such instructions from Mr. Patel. The Respondent therefore contacted Patel, who was in Nebraska at the time, to tell him that he felt legally obligated to deposit the check. The check was deposited and was returned for insufficient funds. On March 19, 1984, Mr. Patel gave the Respondent a replacement check in the amount of $2,000. Mr. Hall asked Mr. Patel to make the check out to him since he had in the meantime become a broker and wanted credit for this transaction in his own business. He also informed Mr. Patel that he would need to use the money for his own personal expenses, in the nature of a "loan." Mr. Patel, however, made the check out to the "Ausley Properties Escrow Account." The Respondent and Mr. Patel had been involved in other business ventures together during the course of which Mr. Patel had already lent the Respondent, on different occasions, a total of approximately $4,000. This course of dealing was continued in the present instance, from the Respondent's viewpoint, when the Respondent informed Mr. Patel that he needed the $2,000 for personal expense purposes and would pay it back as a loan. He believed Mr. Patel assented to that arrangement at the time. The sales contract at issue ultimately failed to be consummated due to Mr. Pate1 and Mr. Bhoja not meeting the required contingency regarding debt financing. Approximately fifteen days after the contract's closing date passed, Mr. Patel made a demand upon the Respondent for the return of the $2,000 deposit. The Respondent failed to return it at that time but assured Mr. Patel that he would repay the money and needed more time to obtain the necessary funds. The Respondent had not deposited the check in the Ausley Properties Escrow Account because such an account did not exist, although the Respondent had urged Mr. Ausley on a number of occasions to set up such an account. The Respondent rather cashed the $2,000 check and used the proceeds for his own benefit, as he had informed Patel he would do. He used the money to meet certain operating expenses and personal expenses, being in severe financial straits at the time. Pate1 knew he was experiencing financial difficulties and had lent him the previously mentioned $4,000 to help him with operating expenses and personal expenses during the pendency of the closing of their various other real estate ventures. The Respondent informed Patel he would use the subject $2,000 for similar purposes, however, the record does not clearly reflect that Patel consented to this, as opposed to his intent that the money be placed in an account as his deposit of consideration for the contract. His testimony to this latter effect is borne out by the fact that in spite of the Respondent's request that the check be made out to him personally, instead Patel made it out to the "Ausley Properties Escrow Account." That account did not exist but the method of drafting the check reveals his intent that the money was to be used as a deposit. In any event the Respondent made no misrepresentation to Mr. Patel as to what he intended to do with the money, but at the same time he did not deposit it in an appropriate account to be held as a deposit toward the purchase of the property involved in the sales contract. Patel made numerous demands for the money and each time Respondent acknowledged this and the other debt to Patel and promised to pay. He ultimately began paying back a small portion of the indebtedness to each of his creditors starting out at a rate of $10 per month. Ultimately, the Respondent paid the entire $2,000 predicated on receipt of his 1985 income tax return.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record and the candor and demeanor of the witnesses, it is therefore RECOMMENDED that a final order be entered by the Petitioner finding that the Respondent has violated Section 475.25(1)(b),(d,)(e) and (k) only to the extent delineated in the above conclusions of law and that his real estate broker's license be subjected to a six months suspension. DONE and ORDERED this 1st day of August, 1986 in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 1986. COPIES FURNISHED: James R. Mitchell, Esquire Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Steven R. Hall 8880 Old Kings Hwy., Apt. 30-W Jacksonville, Florida 32217 Michael Sheahan, Esquire Two South Orange Avenue Orlando, Florida 32801 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Wings Slocum Benton, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold Huff Executive Director Florida Rea1 Estate Commission 400 W. Robinson Street P. O. Box 1900 Orlando, Florida 32802 APPENDIX Petitioner's Proposed Findings of Fact: Accepted Accepted Accepted Accepted Accepted Accepted Rejected, although the evidence establishes that Patel intended the funds to be escrowed. Accepted Accepted Accepted Accepted Accepted Accepted Accepted Rejected as not comporting with the charges in the Administrative Complaint. Respondent's Proposed Findings of Fact:* Accepted Accepted Accepted Accepted Accepted, but irrelevant to the charges. Accepted Accepted Accepted as to the first sentence only. The second sentence concerning Patel's response is not clearly supported by record evidence. Accepted Accepted Accepted * Although Respondent is proposed findings are accepted, some are inculpatory, some are not material and some support the conclusion that no fraudulent conduct was committed.
Findings Of Fact At all times relevant thereto, Respondent, Oswald S. Welsh, held real estate broker license number 0301189 issued by Petitioner, Department of Professional Regulation, Florida Real Estate Commission. He presently is broker for Welsh International Realty, Inc. located at 4684 Northwest 183rd Street, Carol City, Florida. Prior to his involvement with Welsh International Realty, Inc., Respondent was employed as a salesman with Pedro Realty, Inc. until on or about September 15, 1980. Respondent mailed the required papers to establish his own real estate firm to the Board of Real Estate in Orlando, Florida, shortly after he left Pedro Realty, Inc. He assumed that he was authorized to commence business as a broker once the papers were mailed. This assumption was based upon his understanding of the practice followed by other brokers in Dade County. However, because the papers were mailed to Orlando rather than the Department of Professional Regulation in Tallahassee, his registration as a broker did not become effective until November 17, 1980. Respondent engaged the services of an attorney in Hialeah, Florida, to incorporate his real estate firm. The articles of incorporation were sent to the Department of State by letter dated September 19, 1980. Because of an error in the papers, the application was returned to Welsh's attorney on October 1, 1980. The incorporation was ultimately approved on October 22, 1980. Prior to the approval of the incorporation, a salesman for Respondent's firm negotiated a sale of real property on October 17, 1980. Welsh received no proceeds or other value from the closing. Welsh is a native of Jamaica who has lived in the United States since 1963. He became a United States citizen in January, 1982. His real estate firm presently employs approximately twelve persons, of whom seven are full time. Respondent did not intentionally violate the law but appeared to have relied upon the advice of his attorney as to when he could begin to operate his business in a legal manner. Because of errors in filing the papers, or paper not properly filled out by his attorney, he unintentionally began operating prior to approval by the State.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be found guilty as charged in Count II of the Administrative Complaint and issued a public reprimand. DONE and ENTERED this 8th day of July, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER 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 8th day of July, 1982. COPIES FURNISHED: Frederick H. Wilsen, Esquire Department of Professional Regulation Board of Real Estate 130 North Monroe Street Tallahassee, Florida 32301 William H. Davis, Esquire 111 NW 183rd Street Miami, Florida 33169 Carlos B. Stafford Executive Director Board of Real Estate 400 West Robinson Street Orlando, Florida 32802
Findings Of Fact The Respondent, Joseph J. Kowitt, is now a licensed real estate broker-salesman, having been issued License No. 0048987. At all times pertinent to this proceeding the Respondent was registered and licensed by the Florida Real Estate Commission or the Board of Real Estate, respectively, as a non- active real estate broker. The Respondent's registration certificate bore an effective date of October 1, 1978 and an expiration date of September 30, 1980. Some time prior to October 9, 1979, Mrs. Frieda Frank of Silver Spring, Maryland, was contacted by Mr. Douglas Bradshaw, a broker-salesman in the employ of Powis Properties, Inc., a corporate real estate broker of Boca Raton, Florida, to ascertain her interest in selling two unimproved lots in Palm Beach County, Florida. Mrs. Frank, the owner of the property, indicated to Mr. Bradshaw that he should coordinate activities involved in effecting a sale through her cousin, the Respondent. Mrs. Frank had previously instructed the Respondent to attempt to sell the two lots for her for a certain minimum price. The Respondent was contacted by Mr. Bradshaw either shortly before or shortly after he contacted the seller of the property, Mrs. Frank, but after the Respondent had placed signs on the property indicating it to be for sale by the owner, with the Respondent's telephone number depicted thereon. Upon being contacted by Mr. Bradshaw or Powis Properties, Inc., the Respondent explained that he was not the owner of the property, but that he represented his cousin, Mrs. Frank, who lived in Maryland. The result of the conversation was that the Respondent agreed to give Mr. Bradshaw an "open listing" and the Respondent requested that he be reimbursed for any expenses born personally in preparing for and effecting a sale, indicating that this was his cousin's wish also. There is no evidence to reflect the precise amount of expenses incurred by the Respondent in attempting to sell his cousin's property, his testimony simply consisting of statements to the effect that he had erected four or five signs on the property during the course of the year preceding the sale and had incurred gasoline expenses traveling between the property in Palm Beach County and his home in north Dade County. On approximately October 9, 1979 Powis Properties, Inc. secured an offer to purchase the subject property in the amount of $27,000 and communicated that offer to the seller. She indicated to Mr. Kowitt that a $30,000 sales price would be acceptable, including a 10 percent brokerage fee for Powis Properties who had secured the prospective buyer. At approximately this point in time an agreement was reached between Mr. Kowitt, the Respondent, and Powis Properties, Inc. whereby Mr. Kowitt would receive $500 for his services rendered in effecting the sale and which would he paid to him at the closing of the sale of the two subject lots. This arrangement is reflected in the Respondent's own Exhibit 2, although the Respondent maintained the fee arrangement agreed upon was merely for reimbursement of his expenses incurred in preparing the property for sale and was not a referral fee, as Mr. Stingene of Powis Properties had represented in the letter which is Exhibit Two. The Respondent, however, in the face of the Petitioner's showing that a flat fee of $500 was paid with the understanding of the Petitioner's chief witness that it was for a referral or for "services rendered," offered no concrete evidence to establish what his alleged expense items consisted of nor their respective amounts. A purchase offer was redrawn at the required price of $30,000 in accordance with the seller's wishes and accepted by the seller. The transaction proceeded to closing on October 28, 1980. Approximately three days prior to the closing date, Powis Properties, Inc. inquired of the Registration Division of the Board of Real Estate regarding the status of Mr. Kowitt's registration as a realtor and was informed that he held an inactive status at that time. Powis Properties, Inc. communicated this information to Mr. Kowitt who indicated that his registration renewal application was in process and apparently such was not yet reflected in the records of the Board of Real Estate. Powis Properties, through Mr. Powis or Mr. Stingene, then requested that he evidence his valid registration at the closing in order to receive the subject $500 fee. Powis Properties then drew a check of $500 payable to Mr. Kowitt and authorized its sales agent who would be present at the closing to deliver the check to Mr. Kowitt upon his establishing proof of his registration or otherwise inform him that the fee would have to be held in escrow until he could establish the fact of his active registration. At the closing Mr. Kowitt delivered to the salesman representative of Powis Properties, Inc. a photocopy of registration Certificate No. 0048987 indicating on its face the status of "active broker" and based upon that representation, the sales agent delivered to Mr. Kowitt the $500 check which he later negotiated. Petitioner's Exhibit 7, which was unrefuted, reveals that the Respondent held Certificate No. 0048987 which is a non-active broker's certificate issued October 21, 1976 with an expiration date of September 30, 1980. Petitioner's Exhibit 8 was not contradicted and reveals that the Respondent applied for a renewal as a broker-salesman on October 27, 1979, the day prior to the subject closing. After amending his application to that for a broker-salesman certificate, since he did not maintain an office, a broker- salesman certificate was issued to the Respondent with an effective date of November 6, 1979, although with a date of issuance of December 20, 1979 (Exhibit 9). The dates reflected on Exhibit 9 corroborate the Petitioner's showing (in Exhibit 5) that it is the policy of the Board that a registration certificate reflect the effective date to be the date the request was received by the Board in proper form, as opposed to the date of mailing. At the closing the Respondent represented that he was an active broker by the display of a xerox copy of his registration certificate with the above number and expiration date of September 30, 1980. Be acknowledges and admits that he altered the copy of the certificate to remove the prefix "non" from his ostensible designation as an active broker, but the Respondent contends that he informed the representative of Powis Properties at the closing that he had been assured by "someone" with the Board of Real Estate that he could consider himself an active broker upon posting of his renewal application and fee. Shortly after the closing, Mr. Powis or his agent examined the ostensible broker certificate copy supplied them by the Respondent. Upon the belief that the copy of the broker certificate was irregular when compared to other broker certificates which simply state "broker" rather than "active broker" (as the subject one did after the alteration) inquiry was made by phone to the Registration Division of the Board regarding the Respondent's true status. The Board informed Powis Properties that Mr. Kowitt at that time continued to be a non-active broker. Powis Properties then immediately notified Mr. Kowitt of the circumstances and made demand that he return the $500 fee. After a period of days or weeks had elapsed without satisfactory response from Mr. Kowitt, the subject complaint initiating these proceedings was filed by Powis Properties with the Board of Real Estate. Finally, a meeting was held on November 19th between the Respondent and Powis Properties or its agent or representative, at which time the Respondent could not yet supply concrete evidence of his registration as an active broker or broker-salesman, although the application for active status remained pending. Thus, Powis Properties, Inc. continued to maintain its claim against the Respondent for return of the $500 fee and the Petitioner initiated these proceedings.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, as well as the candor and demeanor of the witnesses, it is RECOMMENDED that the Respondent, Joseph J. Kowitt, be found guilty of a violation of Section 475.25(1)(b) Florida Statutes (1979), as well as Section 475.42(1)(a), Florida Statutes (1979), and that the penalty of a public written reprimand be imposed on the Respondent. DONE AND ENTERED this 18th day of May, 1981 in Tallahassee, Leon County, 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 18ths day of May, 1981. COPIES FURNISHED: Ralph Fetner, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Joseph J. Kowitt 2030 South Ocean Drive Apartment No. 1227 Hallandale, Florida 33009
Findings Of Fact At all times relevant, Bangert was a licensed real estate salesman with State of Florida license number 0312002. On or about May 1, 1986, Cynthia Green (now Cynthia Tyson) listed her house at 408 Lakeview Drive, Altamonte Springs, Florida, under an exclusive right of sale contract with J. Scott Jones, a licensed real estate broker. Through his broker, Help U. Sell (Thomas Jafek and Thomas Jafek II), Bangert offered $64,900.00 to Ms. Tyson for the Lakeview house. The contract for sale offered a $1,000.00 deposit note, with two mortgages, including a balloon mortgage, payment of $3,000.00 fix-up costs by the seller, and cash to the seller at closing in the amount of $15,659.00 The offer was rejected by Ms. Tyson. J. Scott Jones negotiated over the telephone with Thomas Jafek II, and then with Bangert. The basic requirement of Ms. Tyson was that she wanted $50,000.00 net at closing. She also wanted a cash deposit, as she had a previous negative experience with a deposit note. J. Scott Jones does not recall that he told Bangert that a cash deposit was required, but he knows the issue came up sometime during the telephone discussion. He did not speak to both Jafek and Bangert at the same time. A second contract offer was signed by Bangert and was accepted by Ms. Tyson on August 30, 1986. The purchase price and method of payment was set out as follows: PURCHASE PRICE $ 68,500.00 PAYMENT: Deposit(s) to be held in escrow by Help-U-Sell of College Park, upon acceptance in the amount of $ 1,000.00 Subject to AND [sic] assumption of Mortgage in good standing in favor of To Be Obtained having an approximate present principal balance of $ 40,000.00 Purchase money mortgage and note bearing interest at 9 percent on terms set forth herein below, in the principal amount of 360 payments of 189.10 to Balloon at 60th mo. $ 23,500.00 Other Purchase Money Mortgage @ 10 percent in a single payment at 60th mo. $ 5,000.00 Balance to close (U.S. cash, LOCALLY DRAWN certified or cashier's check), subject to adjustments and prorations $ 68,500.00 (Petitioner's Exhibit #4) The Contract also provided for the $50,000.00 net at closing to the seller. Bangert gave Thomas Jafek a deposit note in the amount of $1,000.00. Jafek did not know how to put a note in a trust or escrow account, so he held it in his files at Help U. Sell. Jafek had dealt with Bangert before in real estate transactions and had acted before as the escrow agent. In those dealings Bangert only put down notes, never cash. Jafek understood that Bangert's role was as a principal buyer and that Bangert intended to assign the contract for sale. The transaction was initially scheduled to close on September 26, 1987. On September 30, 1986, the parties agreed to extend the closing until October 10, 1986. When J. Scott Jones met with Bangert to get the extension signed, he learned that a note, rather than cash deposit had been made. The transaction never closed. For reasons that are not material to this proceeding, Bangert did not appear at the closing. Cynthia Tyson retained an attorney, Garrick N. Fox, who sent letters to Jafek and to Bangert on October 17, 1986. The letter to Jafek provides, in pertinent part: As per the contract for sale and purchase, your company holds one thousand dollars in escrow and we may [sic) hereby make demand that you remit to this law office the one thousand dollars held in escrow as partial damages for the default of the contract. (Petitioner's Exhibit #6) The letter to Bangert does not mention the deposit, but states that the contract is in default. The final paragraph states: It is my sincere desire that we can settle this matter amicably without the necessity of litigation. If you can close on this contract forthwith, all of these problems can be settled. If not I would appreciate it if you would have your attorney contact [sic] so that we can immediately take the proper steps to minimize Miss Green's damages. (Petitioner's Exhibit #7) The attorney never made an oral demand on Bangert for the $1000.00. Jafek did not consider his letter to be a present demand, but rather a statement of intent to make a demand in the future. Jafek did not tender the note and the $1000.00 was not paid. Bangert had no intent to make a cash deposit. He claims that he told "Tom Jr." " (Thomas Jafek II) to type "a deposit note" on the second contract offer, but that even without that language, a note, rather than cash, was not precluded by the contract terms. Bangert intended that the transaction take place and did not have an intent or motive to defraud the seller. If the transaction had closed, he claims he would have honored the note. As far as he knows, Jafek still has the note. Bangert claims also that it was an oversight that he did not reveal his real estate license status on the contract. The Jafeks knew he was a real estate salesman. Further, he and Scott Jones were teaching at the same real estate school and he felt that Jones should have known his status. He did not intend to hide the fact of his license from anyone. His business in the last three years has been actively serving as a principal buyer and seller for other parties. Bangert's liability on his note is not at issue. In the absence of clear evidence of his knowledge of the seller's conditions, I cannot find that he is guilty of fraud in putting a note cash on deposit. Nor did he deliberately misrepresent a material fact to the seller by failing to disclose that he was a licensed real estate salesman. Ms. Tyson never met Bangert. Both parties were dealing at arms length through their own brokers. Conclusions of Law The Division of Administrative Hearings has jurisdiction over this matter pursuant to Section 120.57(1) F.S. and Section 455.225(4) F.S. Section 475.25(1) F.S. provides that the Florida Real Estate Commission may impose discipline if it finds that a licensee, (b) Has been guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction... DPR has the burden of proving the allegations of this complaint through evidence that is clear and convincing. Ferris v. Turlington, 510 So.2nd 292 (Fla. 1987). It is apparent now that Ms. Tyson wanted a cash deposit as one condition of accepting an offer to buy her property. It is not clear that the condition was communicated to Bangert by either his broker, Thomas Jafek, II, or by Ms. Tyson's broker, J. Scott Jones. Without this material evidence it cannot be established that Bangert deliberately engaged in a subterfuge. Without evidence of dishonest or illicit intent, there is no guilt under Section 475.25(1)(b), F.S. Morris v. Department of Professional Regulation 474 So.2nd 841 (Fla. 5th DCA 1985). No rule nor provision of law has been cited to require a real estate licensee to reveal his status as such when engaging in the purchase and sale of property in his personal capacity. Nor was evidence produced that would establish and justify such a policy by the Board. In Santaniello v. Department of Professional Regulation 432 So.2nd 84 (Fla. 2nd DCA 1983), the court upheld the Board's right to determine that a broker violated Section 475.25(1)(b) F.S. when he failed to reveal that a purchaser was his mother-in- law. In that case, the court observed that the broker owed his allegiance to the sellers and was obligated to inform them of anything which might influence their decision to sell. Because of that, the existence of the mother-in-law relationship was deemed a material fact. No such foundation for a duty to inform was established here, therefore there was no violation of section 475.25(1)(b) F.S.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That the Administrative Complaint against Larry G. Bangert be dismissed. DONE and RECOMMENDED this 17th day of December, 1987 in Tallahassee, Florida. MARY CLARK Hearing Office 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 17th day of December, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3044 The following constitute specific rulings on the findings of fact proposed by Petitioner. Adopted in paragraph #1. Adopted in paragraph #2. Adopted in substance in paragraphs #3 and #4. Adopted in substance in paragraph #4. Evidence did not establish that Bangert was aware of the cash deposit condition by Ms. Tyson. Rejected as contrary to the evidence. The face of the contract does not require cash. Adopted in paragraph #7. Adopted in paragraph #8. Adopted in paragraph #6. Adopted in substance in paragraph #7. Adopted in paragraph #11. Adopted in paragraph #7. Adopted in part in paragraph #10. Bangert contended that the contract did not specify cash. Rejected as cumulative. Adopted in paragraph #9. Rejected as immaterial. COPIES FURNISHED: Copies furnished: DOAH Case No. 87-3044 James R. Mitchell, Esquire Department of Professional Regulation Legal Division of Real Estate 400 West Robinson Street Tallahassee, Florida 32802 Larry G. Bangert 103 Cashew Court Longwood, Florida 32750 Harold Huff, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office. Box 1900 Orlando, Florida 32802 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 =================================================================
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that no action be taken against the real estate license of Keith Allen. DONE and ORDERED this 2nd day of September, 1977, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Allan M. Parvey, Esquire Goldberg, Rubinstein & Buckley, P.A. Post Office Box 2366 Fort Myers, Florida 33902
