Findings Of Fact At all times material to these proceedings, the Respondent McVety was a licensed real estate broker in Florida, having been issued license numbers 0461636 and 0258678. On January 1, 1989, the Respondent purchased the company Realty Services of Southwest Florida, Inc., a Florida corporation. One of the services provided by the corporation was property management. Rents and security deposits were collected from tenants of residential leases on behalf of property owners. In some cases, Respondent McVety was acting as an agent on behalf of property owners through the corporation. In other cases, Respondent McVety or the corporation was the actual property owner. When Respondent McVety took over the management of the corporation after his stock purchase, he noticed that the escrow account into which security deposits were placed, was a non-interest bearing account. On January 23, 1989, the escrow account was changed by the Respondent from an non-interest bearing escrow account to an interest bearing account. The tenants were not notified that their security deposits were now bearing interest. On March 17, 1989, a routine audit was conducted of the Respondent's escrow accounts. During the audit, it was discovered that one hundred and seventeen of the one hundred and thirty leases stated that the security deposits were being held in an non-interest bearing account. The leases which stated that the deposits were in an interest bearing account were signed after the Respondent purchased the corporation. The one hundred and seventeen leases with a non-interest bearing escrow were signed by the tenants prior to the stock transfer. There were no allegations that interest had actually been paid by the bank on the escrow account or that there had been any failure by the Respondent to account for the interest to the tenants, the actual owners of the funds. In mitigation, the Respondent stated that once he was made aware of the problems and truly understood the Department's concerns, a letter was sent to each tenant explaining the placement of the security deposits into an interest bearing escrow account on January 23, 1989. These letters were sent on April 3, 1989. In addition, a new real estate lease was prepared on behalf of the corporation by an attorney. The purpose of the new lease was to explicitly state the rights and responsibilities of the parties regarding the interest on these accounts. In this case, no one was cheated, no secret commissions were earned, and the sums in question were trifling.
Recommendation Accordingly, based upon the foregoing, it is RECOMMENDED: That the Respondent McVety be found guilty of having violated Rule 21V- 14.014, Florida Administrative Code, and is therefore in violation of Section 475.25(1)(e), Florida Statutes. This violation was originally Count II of the Administrative Complaint. Counts I and II, having been withdrawn, are dismissed. That the Respondent McVety be issued a written reprimand as the penalty for the one violation. DONE and ENTERED this 30th day of January, 1990, in Tallahassee, Leon County, Florida. Copies furnished: John R. Alexander, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 John A. McVety 3120 Grand Avenue Fort Myers, Florida 33901 Darlene F. Keller Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 VERONICA E. DONNELLY 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 30th day of January, 1990. Kenneth E. Easley, Esquire General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, FL 32399-0792
Recommendation The Hearing Officer would recommend that the Florida Real Estate Commission place L. B. Slater on probation for a period of one year for the failure of Slater to properly maintain the records of his escrow account. DONE and ORDERED this 12th day of October, 1976, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 COPIES FURNISHED: Richard J.R. Parkinson, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 L. B. Slater 1940 Harrison Street Hollywood, Florida 33020
The Issue Whether Respondent, a licensed real estate broker, committed the violations alleged in the Administrative Complaint and, if so, the penalties that should be imposed.
Findings Of Fact Petitioner is a licensing and regulatory agency of the State of Florida charged with the responsibility and duty to prosecute administrative complaints pursuant to Chapters 455 and 475, Florida Statutes, and Chapter 61J2, Florida Administrative Code. At all times pertinent to this proceeding, Respondent was a licensed real estate broker in accordance with Chapter 475, Florida Statutes. The last license issued to Respondent, license number 0325134, was issued to him in care of Zorcorp Builders, Inc., 2208 Buena Vista Boulevard, Vero Beach, Florida 32960. Respondent is also a licensed general contractor. Both his real estate business and his contracting business are operated out of his residence. On August 13, 1998, Dawn Luchik, an investigator employed by Petitioner, conducted a routine inspection of Respondent's real estate offices. As part of her inspection, Ms. Luchik audited Respondent's escrow account. 1/ As of August 13, 1998, Respondent's escrow account contained the sum of $8,909.76. Ms. Luchik determined that the total trust liability was $8,140.00, which included a bank charge in the amount of $7.46. Deducting the total trust liability and the bank charge from the amount in the account revealed an overage in the escrow account in the amount of $769.76. Respondent testified that the overage represented earned commissions that he left in the escrow account in an effort to keep enough money in the account to avoid bank charges. Those earned commissions constituted Respondent's personal or brokerage business funds. Rule 61J2-14.010(2), Florida Administrative Code, provides as follows: A broker is authorized to place and maintain up to $200 of personal or brokerage business funds in the escrow account for the purpose of opening the account, keeping the account open, and/or paying for ordinary services. Respondent testified that he was unaware of Rule 61J2- 14.010(2), Florida Administrative Code, before Ms. Luchik's inspection. After he learned of that Rule, Respondent immediately withdrew the sum of $600 from his escrow account, leaving an overage of less than $200. There was a conflict in the evidence as to whether Respondent reconciled his escrow account on a regular basis. Ms. Luchik testified that she found no evidence that Respondent attempted to reconcile his escrow account on a monthly basis. Respondent testified that he used a very simple method to reconcile his escrow account each month, but he conceded that his method did not comply with the requirements imposed by Petitioner. 2/ Respondent's testimony established that he failed to properly reconcile his escrow account on a monthly basis.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of the violations alleged in Counts I and II of the Administrative Complaint. It is further RECOMMENDED that an administrative fine in the amount of $250 be imposed for each Count (for a total fine of $500), and that Respondent's licensure be placed on probation for a period of six months for each violation, to run concurrently. It is further RECOMMENDED that as a condition of probation, Respondent be required to complete an appropriate continuing education course in escrow account management. DONE AND ENTERED this 14th day of June, 2000, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 2000
The Issue Whether respondent committed the acts alleged in the Administrative Complaint, and, if so, whether respondent's license should be revoked, suspended or otherwise disciplined.
Findings Of Fact At all times pertinent to the charges, Reynold Diaz was a licensed real estate broker in the State of Florida, having license number 0379909. The respondent was registered under the trade name of "Progressive Developers" from August 20, 1983 to July 25, 1986. Respondent, in his capacity as a real estate broker, managed four rental units owned by John H. Stephen located at 3405-3407 Nebraska Avenue, Tampa, Florida. Mr. Stephen initially met Mr. Diaz when Mr. Stephen purchased the rental properties from him in 1984, and Mr. Stephen retained respondent to manage the properties at a fee of ten percent of the monies collected. At the end of April, 1985, respondent rented one of the units owned by Mr. Stephen to Ms. Roslyn Thompson. During the course of Ms. Thompson's tenancy, the respondent received from Ms. Thompson a total of $630.00, which represented two months rent and a security deposit of $180.00. None of this money was returned to Ms. Thompson and none of it was delivered to Mr. Stephen by respondent. When Mr. Stephen inquired about the rental money from the unit, in June or July of 1985, Mr. Diaz advised Mr. Stephen that the tenant had not paid her rent for a couple of months. Thereafter, Mr. Stephen went to the rental unit to talk to Ms. Thompson about her payments. Ms. Thompson advised Mr. Stephen that she had paid her rent and produced receipts for the $630.00 which she had paid to respondent. Mr. Stephen terminated respondent's services in June of 1985. In September of 1985 Mr. Stephen met with Mr. Diaz in an attempt to obtain an accounting of the monies received by respondent from Mr. Stephen's tenants. Although respondent had provided monthly statements and payments to Mr. Stephen throughout 1984, respondent stopped providing statements in 1985. Thus, Mr. Stephen had not received a statement in April, May, or June of 1985. When Mr. Stephen met with respondent in September, respondent failed to provide a full accounting of the money he had received from Mr. Stephen's tenants and failed to deliver the money he had received. However, subsequent to the meeting, Mr. Stephen did receive from respondent the amount he was owed on two of the rental units. However, respondent failed to deliver the money he had received from Ms. Thompson. Respondent contends that of the $630.00 he received from Ms. Thompson, he paid Mr. Stephen $225.00 in September and then paid the $405.00 balance in two installments. However, the evidence does not support this contention, and I accept Mr. Stephen's testimony that he never received any rent payments on the Thompson unit. Further, although the evidence does show that respondent paid Mr. Stephen $405.00 in two checks, these payments were for the money owed on the other rental units. Mr. Diaz has failed to account for or deliver to Mr. Stephen the $630.00 received from Ms. Thompson. Respondent, in his capacity as a real estate broker, also managed rental property owned by Sandra K. Nelson located at 1208 East Chelsea Street, Tampa, Florida. Ms. Nelson first met Mr. Diaz when she purchased the rental property, and she retained respondent to manage the property at a fee of ten percent of the monies collected. In August of 1984, the respondent rented the Nelson property to Joseph Ira Pasco. At the time of renting the unit, the respondent received from Mr. Pasco a security deposit of $325.00. However, Mr. Diaz advised Ms. Nelson that Mr. Pasco had not paid his security deposit, and withheld $275.00 from a rental payment to hold as a security deposit. Subsequently, after Ms. Nelson started eviction proceedings, she discovered that Mr. Pasco had a receipt signed by Mr. Diaz for a $325.00 security deposit. However, despite Ms. Nelson's demands, the respondent failed to deliver to Ms. Nelson the $325.00 security deposit or any portion thereof. Further, the security deposit was not returned to Mr. Pasco. However, respondent did ultimately deliver to Ms. Nelson the $275.00 that he had retained from the rental payment. Respondent maintained an escrow account at the Hay Gulf Federal Credit Union from August 8, 1984 until November 26, 1984, when the account was closed. When petitioner's investigator, Leo Huddleston, requested of the respondent all documentation associated with the Stephen and Nelson transactions, respondent produced the carbon copies of three deposit slips and twenty checks drawn on the Bay Gulf account. The documents covered only the months of September and October of 1984, and none of the documents appear to be connected to the Stephen and Nelson transactions. The respondent failed to produce his real estate brokerage escrow account statements, his business records, leases, contracts or other documentation required to be kept by the respondent and produced to the petitioner upon request. At no time did respondent place or maintain the $325.00 security deposit on the Nelson property in an escrow or trust account. Further, since respondent's escrow account was closed at the times respondent collected the rent money and deposit from Ms. Thompson, it is apparent that none of the $630.00 was placed in an escrow or trust account. Respondent admitted that he did not properly handle the funds received from the Nelson and Stephen properties, stating that he managed the properties on the basis of friendship rather than a professional basis. However, he did admit retaining ten percent of all the money collected. From August 20, 1983, until July 25, 1986, the respondent was registered with the Real Estate Commission under the trade name "Progressive Developers." However, at various times during this period, the respondent transacted business both as "Progressive Real Estate Developers" and "Progressive Real Estate Developers, Inc." These names were not registered with the Real Estate Commission.
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 suspending respondent's license for a period of two (2) years and imposing an administrative fine of $1,150 to be assessed as follows: Counts I and VI, $200 for each count; Counts II and VII, $200 for each count; Counts III and VIII, $100 for each count; Count IV, $100; and Count V, $50. Respectfully submitted and entered this 9th day of March, 1987, in Tallahassee, Florida. DIANE A. GRUBBS 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 March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-3775 Petitioner's Proposed Findings of Fact: Accepted in paragraph 1. Accepted in paragraph 2. Accepted in paragraph 3. Accepted in paragraphs 5 and 6. Accepted in paragraph 7. 6-7. Accepted in paragraph 8. Accepted generally in paragraphs 6 and 8. Accepted in paragraph 10. Accepted in paragraph 9. Accepted in paragraph 11. Respondent's Proposed Findings of Fact: Accepted that respondent managed Mr. Stephen's property. Second sentence rejected as irrelevant; further, the evidence established that Mr. Stephen first met Mr. Diaz when Mr. Stephen purchased the subject property from Mr. Diaz and retained him to manage it. Third sentence accepted in paragraph 10. Fourth sentence rejected as to the money received from Ms. Thompson, but accepted that money was delivered to Mr. Stephen in paragraph 6. Last sentence rejected as not a finding of fact. Accepted that $275 was paid to Ms. Nelson in paragraph 8; however, reject by contrary finding that the $275 payment was partial payment on the $325 security deposit. Reject, for lack of any evidence that improper name registration was computer error. Remainder rejected as not findings of fact. COPIES FURNISHED: James R. Mitchell, Esquire Harold Huff, Executive DPR - Division of Real Estate Director 400 West Robinson Street DPR - Division of Real Estate Orlando, Florida 32802 400 West Robinson Street Orlando, Florida 32802 Reynold Diaz 7908 N. Florida Avenue Tampa, Florida 33604
The Issue The issue for determination at the final hearing was whether the Respondent violated the real estate licensing law, as alleged in the Administrative Complaint, by failing to account and deliver a deposit; failing to maintain a deposit in a real estate brokerage escrow account or some other proper depository until disbursement thereof was properly authorized; and/or being guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, and/or breach of trust in a business transaction.
Findings Of Fact Based on my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, I hereby make the following findings of fact: Respondent is now, and was at all times material hereto, a licensed real estate broker in the State of Florida having been issued license number 0360741. The last license issued was as a broker, c/o Consolidated American Realty Services, Inc., in Tampa, Florida. From June 6, 1983, through June 25, 1984, Respondent was licensed and operating as a real estate broker under the trade name, "Benjamin Realty," in Tampa, Florida. For sometime prior to June 2, 1984, Eileen Cumbie attempted to sell a lot owned by her located at 1102 26th Avenue, Tampa, Florida. On June 2, 1984, the Respondent contacted Ms. Cumbie and informed her that he had a client interested in purchasing the property. Ms. Cumbie informed the Respondent that as long as she netted a certain amount, she would be willing to sell the property. Ms. Cumbie allowed the Respondent to put together a contract for the sale of the lot. In connection therewith, the Respondent prepared a sales contract with Danilo Castellanos, as purchaser, and Eileen W. Cumbie, as seller, for the purchase and sale of the property. Pursuant to the purchase and sales agreement, the Respondent received in trust from Mr. Castellanos a $500 earnest money deposit via check dated June 2, 1984. On June 5, 1984, the Respondent deposited the check into his real estate brokerage account maintained at the Central Bank of Tampa, 2307 W. Rennedy Boulevard, Tampa, Florida. Mr. Castellanos entered into the contract for the benefit of his son and daughter-in-law who resided in New Jersey but were planning to relocate to the Tampa area. Mr. Castellanos' daughter-in-law went to look at the lot on June 10, 1984 and decided that she did not like the area in which it was located. The closing of the transaction was set for June 15, 1984. On approximately June 13, 1984, Mr. Castellanos' daughter- in-law informed the Respondent that they were no longer interested in purchasing the property. Ms. Cumbie was out of town during the time of the scheduled closing, but had prepared and signed all of the paperwork in advance. When she returned after June 15, 1984, she called Respondent to find out how the closing went. The Respondent informed her that the buyers failed to go through with the transaction. The contract provided in part as follows: ". . . If the buyer fails to perform this contract within the time specified herein, time being of the essence of this agreement, the deposit made by the buyer shall be disposed of in the following manner: To the Broker an amount equal to his earned commission, but not to exceed 1/2 of the deposit which shall discharge the sellers obligation to him for that service; remainder to the seller to be credited to him against his damages accrued by reason of the breach of contract. " After the transaction failed to close, Ms. Cumbie requested that Respondent give a portion of the deposit to her. The Respondent told Ms. Cumbie that he would give her the entire deposit because she had paid for the survey and a few other items to facilitate the closing of the transaction. Over the next several months, the Respondent, on several occasions, promised to deliver a check to Ms. Cumbie. However, the Respondent never delivered any such check to Ms. Cumbie. Because the Respondent failed to provide Ms. Cumbie with a share of the earnest money deposit, she initiated a civil action in the County Court of Hillsborough County. On October 15, 1985, Ms. Cumbie was awarded a final judgment in the amount of $250 against Respondent for her share of the forfeited earnest money deposit. As of the date of the final hearing, the Respondent had not satisfied the judgment and Ms. Cumbie had not received any proceeds from the forfeited earnest money deposit. Shortly after the transaction failed to close, the purchasers requested that the Respondent return the earnest money deposit to them. However, the Respondent informed them that they were not entitled to the return of the earnest money deposit. The earnest money deposit was never returned to the purchasers. On July 31, 1984, the balance in Respondent's escrow account was $568.83. However, on September 1, 1984, the balance in the Petitioner's escrow account fell to S18.83. From October 31, 1984 to January 1, 1986, the balance in the Petitioner's escrow account remained $3.83.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore, RECOMMENDED that the registration of Fortunato Benjamin- Pabon as a real estate broker be revoked. DONE and ORDERED this 18th day of June, 1986, in Tallahassee, Florida. W. MATTHEW STEVENSON, 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 18th day of June, 1986. COPIES FURNISHED: Arthur R. Shell, Jr., Esquire Department of Professional Regulation 400 W. Robinson Street Orlando, Florida 32801 Fortunato Benjamin-Pabon 2729 N. Ridgewood Avenue, #1 Tampa, Florida 33602 Harold Huff, Executive Director Department of Professional Regulation Division of Real Estate P. O. Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
The Issue The central issue in this case is whether Respondent is guilty of the violations alleged in the administrative complaint dated January 19, 1989; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the prehearing stipulation filed by the parties, the testimony of the witnesses, and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with the responsibility of regulating and disciplining real estate licensees. The Respondent, Charles P. Grimes, is, and has been at all times material to the allegations of the administrative complaint, licensed as a real estate broker in the State of Florida, license number 0034301. In November, 1980, a contract for sale and purchase of real estate was drafted between Dorothy Langham Scott, seller, and Phillip Crawford, buyer. The contract, which was subsequently executed by both parties, provided that a deposit in the amount of $18,500 was to be held in escrow by Respondent. A separate brokerage agreement between Respondent and the seller, executed November 30, 1980, provided that Respondent would receive a brokerage fee of ten percent of the total gross sales price. The brokerage agreement specified that "should the buyer default and not close the transaction in accordance with the Contract, the Broker shall not be entitled to any commission." The agreement further provided that Respondent would "use reasonable diligence and his best efforts to see that the transaction is closed in accordance with the executed Contract." The contract described in paragraph 3 did not close. Subsequently, the seller sued Respondent in the Circuit Court in Palm Beach County, Case no. 82-1974 CA (L) 01 B. On August 13, 1985, an amended final judgment was entered which provided, in part: The facts adduced at trial indicate that Crawford and Scott entered into a contract for the purchase and sale of certain real property, located in Putnam County and that for no apparent reason Crawford defaulted on the contract. The evidence is clear and convincing and unrefuted. Crawford has admitted several letters which he says were communicated to the attorney for Scott. However, the substantial weight of the evidence will not support his repudiation of the contract. Accordingly, it is clear that as between Scott and Grimes, the real estate agent who was allegedly holding the deposit under the provisions of the deposit receipt contract, Scott is entitled to a judgment for $18,500.00, plus its costs and attorney's fees. John L. Burns, an attorney who represented the seller, Scott, during the contract negotiations in November, 1980- January, 1981, received a letter from Respondent on December 12, 1980. That letter, dated December 5, 1980, provided: "I have enclosed the signed contract and have received the deposit check from Dr. Crawford." On or about January 29, 1981, Mr. Burns received a letter from Respondent which indicated that the contract would close in March, 1981. Respondent did not advise the seller that the deposit on the Crawford/Scott contract was not in escrow. Respondent erroneously assumed that a deposit from the buyer (which had been deposited on another contract for sale and purchase) could be applied to the contract. That deposit, in the amount of $20,000.00, was not transferred and was not used to satisfy the amended judgment entered in Scott's favor.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Professional Regulation, Florida Real Estate Commission, enter a final order finding the Respondent guilty of the violation of Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000.00, suspending his license for a period of 60 days, and placing the Respondent on probation for a period of two years. It is recommended that the Respondent be found not guilty of the other alleged violations. DONE and ENTERED this 18th day of December, 1989, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1989. APPENDIX TO CASE NO. 89-2517 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 4 are accepted. With regard to paragraph 5, it is accepted that on or about November 30, 1980, Respondent was attempting to procure the contract described; however, the exact date the parties executed the contract is not known. The contract was ultimately executed by both parties but did not close. Consequently, the proposed fact, as written, is not supported by the record. Paragraphs 6 and 7 are accepted. With regard to paragraph 8, it is accepted that the contract did not close and that a court of competent jurisdiction determined that the deposit should be awarded the seller; otherwise, the paragraph is rejected as outside the scope of this record. Paragraph 9 is accepted but is irrelevant. Paragraph 10 is accepted. Paragraph 11 is rejected as irrelevant. Paragraph 12 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Glenn M. Blake Blake & Torres, P.A. 200 South Indian River Drive Suite 101 Fort Pierce, Florida 34950 Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Kenneth E. Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 =================================================================
Findings Of Fact The Department is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, in particular, Chapters 120, 455 and 475, Florida Statutes (1991), and the rules promulgated pursuant thereto. The Respondents, Shirley M. Ferguson and Dosh Realty, Inc., are now, and were at all times material hereto, licensed real estate brokers in the State of Florida, having been issued license numbers 0393921 and 0252372, respectively, in accordance with Chapter 475, Florida Statutes. The last licenses issued were as brokers, c/o Dosh Realty, Inc., 595 N. Nova Road 105A, Ormond Beach, Florida 32174. At all times material hereto, Ms. Ferguson was licensed and operating as qualifying broker and officer of Dosh Realty, Inc. On or about August 1, 1990, Ms. Ferguson maintained and operated a branch office of Dosh Realty, Inc., at the Aliki Condominium located in Daytona Beach. On or about August 1, 1990, Ms. Ferguson and Carol Savage, a licensed salesperson, entered into an "Independent Contractor Agreement" whereby Ms. Savage agreed to act as a property management agent for Dosh Realty, Inc., at the Aliki Condominium. Ms. Savage's license was registered with Dosh Realty, Inc. The Independent Contractor Agreement between Ms. Ferguson and Ms. Savage specifically required that Ms. Savage set up "two rental accounts - Dosh Realty, Inc./ (condo name) - one account to be a general account for rentals, the other account to be a non-interest escrow account for security deposits." On August 1, 1990, Ms. Ferguson opened an account, number 1130222031, at Barnett Bank in Ormond Beach, Florida. Ms. Ferguson and Ms. Savage were signatories on the account. The account was not an escrow security account. Ms. Ferguson inquired of Ms. Savage about a rental escrow account for Aliki Condominium. Ms. Savage informed Ms. Ferguson that security deposits were not required or received and, therefore, no escrow account was necessary. Despite the requirement of the Independent Contractor Agreement that an escrow account be established, Ms. Ferguson did not require that Ms. Savage comply with the terms of the Independent Contractor Agreement. Between August 1, 1990, and July 20, 1991, Ms. Savage, in the course of her association with the Respondents, solicited and obtained tenants to lease condominium units at the Aliki Condominium. Ms. Savage informed Ms. Ferguson that the agreements for these rentals were verbal. Ms. Ferguson did not insist that written agreements be entered into. Between August 1, 1990, and July 20, 1991, Ms. Savage in fact received monies as security deposits for rentals at the Aliki Condominium. Not all of the monies received by Ms. Savage were deposited in an account of the Respondents. Respondents were not notified of the security deposits and the Respondents were not aware that the security deposits had been collected. On July 20, 1991, Ms. Ferguson became aware that Ms. Savage had been collecting security deposits from tenants of the Aliki Condominium. Ms. Ferguson learned that Ms. Savage had taken the deposits and had failed to deliver the deposits to the Respondents. On or about July 20, 1991, tenants of the Aliki Condominium began to demand a return of their security deposits and Ms. Savage left the State of Florida. Ms. Ferguson reported the foregoing events to the Department and ultimately filed a complaint against Ms. Savage. Ms. Savage ultimately surrendered her license with the Department for revocation. The Respondents have not returned the security deposits received by Ms. Savage at the Aliki Condominium. Although Ms. Ferguson was very cooperative during the Department's investigation of this matter and although Ms. Ferguson did inquire of Ms. Savage concerning the manner in which rentals were handled at Aliki condominium, Ms. Ferguson did not insist, as a condition for the continued use by Ms. Savage of Ms. Ferguson's brokers license and the brokers license of Dosh Realty, Inc., that Ms. Savage use written rental agreements, require deposits and use an escrow account. Ms. Ferguson acknowledged during the investigation of this matter that monies were received at Dosh Realty's branch office at the Aliki Condominium that were not deposited in an escrow account and that she accepted Ms. Savage's representation that no written leases were entered into at the Aliki Condominium.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order finding that the Respondents have violated Sections 475.25(1)(b), (d) and (k), Florida Statutes (1991). It is further RECOMMENDED that Ms. Ferguson be reprimanded, placed on probation for one year and required to complete the 30 hour broker management course. DONE and ENTERED this day of July, 1992, in Tallahassee, Florida. LARRY J. SARTIN 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 day of July, 1992. APPENDIX Case Number 92-1990 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Department's Proposed Findings of Fact Proposed Finding Paragraph Number in Order of Fact Number of Acceptance or Reason for Rejection 1 1. 2 2. 4 3. 5 4. See 5. See 8. 8 10. See 11. The exact amount of the deposits at issue was not proved by competent substantial evidence. Hereby accepted. 11 12. 12 13-14. 14 15. 15 See 17. The Respondents' Proposed Findings of Fact Proposed Finding Paragraph Number in Order of Fact Number of Acceptance or Reason for Rejection 1 1. 2 2. 3 3. 4 4. 5 5. 6 8. 7 11. See 9-10. 8 10-11. 9 12 and 13. The last sentence is not supported by the weight of the evidence and is not relevant. Although it is true that the exact monies Ms. Savage took were not received by the Respondents, they were responsible and could have returned monies of the Respondents. COPIES FURNISHED: Steven W. Johnson Senior Attorney Department of Professional Regulation Division of Real Estate Legal Section Hurston Building, North Tower #308 400 West Robinson Street Orlando, Florida 32801-1772 R. Michael Kennedy, Esquire Post Office Box 4319 South Daytona, Florida 32121 Jack Ray 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 Post Office Box 1900 Orlando Florida 32802-1900
Findings Of Fact On July 13, 1973 Respondent, Abelardo Blanco, negotiated a contract between South Kendall Ranch, Inc., the purchaser, and Luis Hernandez, the seller, of a tract of land in Polk County, Florida. As earnest money deposit the purchaser gave a $500 check payable to Global Realty Escrow Account and an additional $4,500 deposit when the contract was accepted by the seller. The three checks in the amount of $500, $2,000, and $2,500 were all dated July 13, 1973 and made payable to Global Realty Escrow Account. These three checks were endorsed by Blanco and deposited in Global Realty Escrow Account at Republic National Bank of Miami on July 16, 1973. By checks payable to Blanco dated July 14 in the amount of $1,000, dated July 20, 1973 in the amount of $2,100, and dated July 20, 1973 in the amount of $900, signed by Blanco, $4,000 was withdrawn from this escrow account. By check payable to Robert Jewell dated July 21, 1973, and signed by Blanco, $1,000 was withdrawn from this escrow account. No authorization to disburse these funds was ever given to Blanco by the purchaser. Due to failure of the seller to present an abstract of title of the property to the attorney for the buyer the contract was rescinded and the transaction never closed. The buyer demanded return of his earnest money deposit from Blanco and after receiving no response to several demands filed a complaint with FREC. Blanco acknowledged to the buyer that he had taken the earnest money deposit from the escrow account; and, on April 10, 1974 Blanco executed a promissory note for $5,000 payable to the buyer. Subsequently he paid $2,400 on that note before departing his last known address for parts unknown. When questioned by the investigator for FREC in October, 1974 Blanco blamed a non-active firm member of taking the escrow deposit and leaving the country; however, the checks introduced into evidence indicate that Blanco was less than truthful to the investigator. As a result of Respondent's mishandling and/or misappropriation of funds from the escrow account, the purchaser who entrusted his money to Blanco is out some $2,600.
Findings Of Fact Kenneth W. Schneegold is a licensed real estate broker holding license no. 0078270 issued by the Department of Professional Regulations in the Division of Real Estate. The Respondent was president of Atlantis Properties, Inc., Florida Corporation. Atlantis Properties, Inc., and the Respondent were developers of a condominium to be built and known as Presidential Estates located in St. Petersburg, Florida. On or about January 10, 1981, Daniel K. Cullinan and J. Kent Staley entered into a written Reservation Agreement with Atlantis Properties, Inc., and the Respondent, as president, to reserve a unit within Presidential Estates. Pursuant to the Reservation Agreement a deposit of $1,000.00 was paid to ERA Kent Warren Realty in the form of a check received by the Respondent. The Reservation Agreement specified that the $1,000.00 deposit was to be held in the ERA Kent Warren Realty escrow account. The $1,000.00 deposit was paid in the form of a check signed by Daniel K. Cullinan on January 10, 1981. The deposit was placed into the escrow account of ERA Kent Warren Realty in the Pinellas Bank in St. Petersburg, Florida, on or about January 12, 1981. ERA Kent Warren Realty is the name under which the Respondent trades and the ERA Kent Warren Realty escrow account is the escrow account of the Respondent. This escrow account was maintained by the Respondent in his capacity as real estate broker. Pursuant to the terms of the Reservation Agreement, the $1,000.00 deposit was to be returned to the prospective buyer if one of the following occurred: In the event that the Agreement was terminated, the buyer would be entitled to an immediate and unqualified refund of reservation deposit. Said agreement could be terminated by the buyer upon written request at any time prior to the execution by the parties of a Purchase Agreement. The written notice was to be delivered by certified mail. The Agreement was also to terminate and the deposit would be returned if, by the first anniversary date of the Reservation Agreement, the purchase agreement had not been entered into by the parties. More than one year after the signing of the Reservation Agreement a purchase agreement had not been entered into by the parties. Cullinan made verbal demands upon the Respondent for return of his $1,000.00 deposit on several occasions. The Respondent did not account or deliver the $1,000.00 deposit to Cullinan. Cullinan sent a certified letter to the Respondent terminating the Reservation Agreement and requesting return of the $1,000.00 deposit. This written request was made on or about January 22, 1983. The certified letter was returned to Cullinan as unclaimed by the Respondent. The Respondent acknowledged that he was aware of Cullinan's request for the return of the $1,000.00 and also aware of his written request for the return of the $1,000.00 deposit. The Respondent communicated with Staley who did not demand termination of the agreement and return of the money from the Respondent. During the time from January 25, 1982, through February 28, 1983, prior to the return of the $1,000.00 deposit to Cullinan, the ERA Kent Warren Realty escrow account fell to a balance below $1,000.00 on no less that 16 occasions. The Respondent admits that his escrow account did fall below $1,000.00 on several occasions during the above mentioned time period. Cullinan nor Staley never gave their consent to the removal or use of the $1,000.00 deposit for any purpose other than those specified in the agreement. After complaint was lodged with the Division of Real Estate, the Respondent under compulsion from the Real Estate Commission paid the $1,000.00 deposit to Cullinan.
Recommendation Having found the Respondent guilty of violation Section 475.25 (1)(k), Florida Statutes, by failing to maintain monies in his escrow account properly it is recommended that the Respondent's license as real estate broker be suspended for a period of three months and that he be fined a sum of $1,000.00. DONE AND ORDERED this 27th day of November, 1984, at Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of November, 1984. COPIES FURNISHED: James R. Mitchell, Attorney for Petitioner DPR-Division of Real Estate 400 W. Robinson St. P.O. Box 1900 Orlando, Florida 32802 Mr. Kenneth W. Schneegold 11360 Fourth Street, East Treasure Island, Florida 33706 Mr. Harold Huff Director, Division of Real Estate Department of Professional Regulation 400 West Robinson Street Orlando, Florida 32801
