The Issue The issue in this case is whether Respondent violated Section 475.25(1)(b), Florida Statutes (1997), by failing to disclose that a tenant was her son, by failing to collect a required security deposit, and by acting as the agent for the tenant rather than the landlord. (All reference to Chapters and Sections are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for regulating the practice of real estate. Respondent is licensed as a real estate broker pursuant to license number 0480790. At all relevant times, Respondent was employed by Norris Realty, Inc. ("Norris"). In March 1990, Mr. and Mrs. George and Margaret Nichols entered into a property management agreement with Norris. Respondent was aware of the management agreement. Norris was the agent for the Nichols and assumed all duties owed to a principal by an agent. The managing broker was Mr. Alan Norrie. On March 22, 1996, Mr. Norrie died, and Respondent assumed responsibility as the broker/office manager for Norris. Respondent had no experience managing a real estate office at the time. She continued in that role for approximately seven months. During the time Respondent was the broker/office manager for Norris, another agent for Norris obtained a lease from Mr. Joseph McGee to rent the Nichol's property. There were no written amendments made to the lease during the time Respondent was the broker/office manager of Norris. The lease required all rents and other monies to be paid to Norris. The tenant was to deposit with Norris a $750.00 security deposit and the last month's rent of $750.00 prior to occupying the property. Respondent failed to disclose to the Nichols that the tenant was her son. The lease does not disclose the relationship of the tenant to the broker/office manager of Norris. The Nichols did not learn that the tenant was Respondent's son until March or April of 1997, approximately four months after the tenant occupied the rental property. Respondent permitted the tenant to move into the property without collecting either the security deposit or last month's rent from the tenant. Respondent failed to disclose to the Nichols that the tenant had paid neither the security deposit nor the last month's rent. Shortly after occupying the property, the tenant failed to pay further rent. A judgment of eviction was eventually entered against the tenant. The tenant vacated the property and took the stove that was in the rental property. Respondent acted as her son's agent in the rental transaction. By letter dated May 21, 1997, the Nichols filed a complaint against Respondent with Petitioner. During the formal hearing, Respondent admitted to being negligent regarding the transaction in question and acting as her son's agent.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a Final Order finding Respondent guilty of violating Section 475.25(1)(b), reprimanding Respondent, requiring Respondent to complete continuing education relevant to the specific offenses, and either imposing an administrative fine of $1,000 or requiring restitution to the Nichols. DONE AND ENTERED this 1st day of September, 1998, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 1st day of September, 1998. COPIES FURNISHED: Henry M. Solares, Division Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda Goodgame, General Counsel Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street Tallahassee, Florida 32399-0792 Geoffrey T. Kirk, Senior Attorney Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32802 Dorothy A. McGee pro se 109 11th Avenue Indiatlantic, Florida 32801
The Issue The issue for determination in this proceeding is whether Respondent committed the acts alleged in the Administrative Complaint and, if so, what, if any, disciplinary action should be imposed.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with responsibility for prosecuting administrative complaints pursuant to the laws of the State of Florida. Respondent is now and has been at all times material to this proceeding a licensed real estate salesman in the state, holding license number 0189734. The license was last issued as a salesperson %Say Realty & Investments, Inc., 6306 Pembroke Road, Hollywood, Florida 33023. Respondent was employed as a salesperson with Sales Alvin, Inc. from June 28, 1990, to March 10, 1991. Respondent's license was placed with Say Realty and Investments, Inc. effective March 11, 1991. During the time Respondent was employed by Sales Alvin, Inc., she carried out a series of acts in connection with the listing for rent of a condominium without the knowledge and consent of her employing broker. While Respondent was a salesperson for Sales Alvin, Inc., on or about February 19, 1991, Respondent listed an unfurnished condominium for rent at a monthly rental price of $700. The condominium was owned by Mr. Roy Barrett. Respondent listed the rental unit, and Alon Granovsky, another salesperson employed by Sales Alvin, Inc., procured a tenant for the condominium. Respondent drafted a lease between the tenant and the owner of the condominium on or about February 21, 1991. Respondent collected a check from the tenant in the amount of $2,100 for payment of the initial rent and security deposit. Respondent then delivered the check to the owner of the condominium, and the owner gave Respondent a receipt for $2,100. Respondent gave Mr. Granovsky a personal check for $210 on or about February 21, 1991, as a commission for procuring the tenant for the condominium. Respondent did not inform her employing broker of the rental transaction or that she had given a commission check to Mr. Granovsky. Mr. Granovsky disclosed the transaction to his employing broker and delivered his commission check to his broker. Respondent's broker gained additional knowledge of the transaction when he received a money order from the tenant in the amount of $700 for the rent due for the month of March. Respondent's employing broker confronted Respondent regarding the transaction. Respondent provided her employing broker with a personal check for $350 as a portion of the commission due the employing broker and subsequently delivered the balance of the commission due. The entire commission was disbursed by the employing broker. While employed by Sales Alvin, Inc., on or about March 3, 1991, Respondent solicited and obtained a listing for the sale of a house. Respondent provided the owners of the house with a Sellers Net Sheet on the letter head and form used by Sales Alvin, Inc. The Sellers Net Sheet approximated the cash to seller at closing if the house sold at the listed price. Respondent became employed by Say Realty and Investment, Inc., on or about March 11, 1991. Respondent listed the house while she was employed by Sales Alvin, Inc. When Respondent placed the house in the multiple listing service ("MLS"), she showed Say Realty and Investment, Inc., as the listing broker. When the brokers at Sales Alvin, Inc. questioned the listing with Say Realty and Investment, Inc., the listing was transferred to Sales Alvin, Inc. Respondent has no history of prior disciplinary action against her license.
Recommendation Based upon the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that Petitioner should enter a Final Order suspending Respondent's license for 90 days, imposing an administrative fine of $1,000, and placing Respondent on probation for one year subject to such reasonable conditions as may be imposed by the Commission. DONE and ENTERED this 22nd day of January, 1992, in Tallahassee, Leon County, Florida. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 1992.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as the pleadings on file, the following relevant facts are found: In the October 1, 1982 edition of the Florida Administrative Weekly, Volume 8, No. 39 at page 2685, notice was published of the respondent's proposed amendment of Rule 12A-1.61, entitled "Rental of Living Quarters, Sleeping or Housekeeping Accommodations." This notice contained the following language: "IF REQUESTED, A HEARING WILL BE HELD AT: TIME AND DATE: 9:00 a.m., October 22, 1982 PLACE: New Capitol, Lower Level" By letter dated October 7, 1982, the respondent received a request for a hearing and notification of an intent to appear at the hearing scheduled for 9:00 a.m. on October 22, 1982, for the purpose of protesting the proposed change in Rule 12A-1.61. This letter was not written by or on behalf of any of the petitioners in this proceeding. The respondent did not acknowledge that it received this request, nor did it schedule or hold the public hearing on October 22, 1982. On October 18 or 19, 1982, the petitioners in this proceeding filed with the respondent a "petition to convene separate proceeding pursuant to 120.54(16), Florida Statutes." Among other allegations, this petition states that: "3. Petitioners are particularly affected by the proposed rule and cannot adequately protect those interests merely by appearing at a public hearing. Petitioners intend to present extensive testimony from their own witnesses and from the staff of DOR. Requiring Petitioners to proceed at a hearing open to the public would so disrupt, hamper and frustrate Petitioners' presentation so as to unfairly restrain Petitioners' ability to adequately oppose adoption of the proposed rule. Petitioners must be afforded an individual proceeding where they would have complete and uninterrupted access to the staff of DOR and be able to present their own witnesses in an adversary-type proceeding, which cannot be done at a standard rule hearing. Only in this manner will Petitioners be afforded a fair hearing on the proposed rule. WHEREFORE Petitioners respectfully request that DOR suspend its rule- making proceedings and convene a separate proceeding under the pro- visions of Section 120.57." The respondent filed a Motion to Dismiss the petition to convene a separate proceeding pursuant to Section 120.54(16) on or about October 25, 1982. In the October 29, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 43, at page 2976, the following announcement appears: "The Department of Revenue announces that the hearing scheduled for October 22, 1982 on Rule 12A-1.61--Rental of Living Quarters, Sleeping or Housekeeping Accommodations, has been deferred for one month. Notice of this Proposed Rule was given in the Florida Administrative Weekly Vol. 8, No. 39, dated October 1, 1982, on pages 2686-2689." By "Final Order Denying Rule-Making Hearing and Draw-out Proceeding" dated November 8, 1982, nunc pro tunc to November 3, 1982, the respondent denied the petitioners' requests for a Section 120.54(3) and a Section 120.54(16) hearing. It was concluded that the requests were filed beyond 14 days from October 1, 1982, the date upon which notice of the proposed rule was published, and thus were untimely. It was found that since no timely request for a Section 120.54(3) hearing had been received by the respondent (a fact which the respondent now admits was erroneous), the respondent was not required to schedule such a hearing and, indeed, had not exercised its option to schedule such a hearing. Therefore, the respondent concluded that there existed no rulemaking proceeding from which to "draw-out" and the petition for a Section 120.54(16) proceeding was therefore moot. No reference was made in the respondent's order to the announcement which had appeared in the October 29, 1982, Florida Administrative Weekly that the October 22, 1982, hearing on Rule 12A-1.61 had been deferred for one month. The respondent's Order also concluded that the request for a draw-out proceeding, even had it been timely filed, was fatally defective for its failure to affirmatively demonstrate that a Section 120.54(3) rulemaking proceeding would not provide adequate opportunity to protect the petitioners' substantial interest. On November 9, 1982, the Governor and Cabinet adopted challenged Rule 12A-1.61, 1/ after receiving comments from the petitioners and counsel for the petitioners in this case. The petitioners received notice that the Governor and Cabinet would take up the proposed rule on November 9, 1982, by way of a telephone call received approximately 24 hours before November ninth. No notice was published in the Florida Administrative Weekly that a public meeting would be held by the Department of Revenue on November 9, 1982, which was the second Tuesday of the month. Notices did appear in the October 8, October 22, and November 5, 1982 editions of the Florida Administrative Weekly that public meetings would be held respectively on October 22, November 3 and November 16, 1982. These notices state that the "Department of Revenue will act on matters duly presented on its Agenda, which may include approval of rules" and other matters. The rules which govern the organization and administration of the Department of Revenue provide that regular public meetings of the Governor and Cabinet to transact the business of the Department of Revenue shall be on the first and third Tuesdays of each month or at such other place or time as may be designated, and that a standard notice of the meeting must be published in the Florida Administrative Weekly at least seven (7) days in advance. Rule 12-1.03, Florida Administrative Code. Any agenda item "deferred must be re-agendaed for the next regularly scheduled meeting of the Governor and Cabinet unless a longer period of deferment is approved by a majority vote of the Governor and Cabinet." Rule 12-1.06, Florida Administrative Code. In summary form, the challenged rule provides, inter alia, that individual condominium units are considered, with certain exceptions, taxable transient rental facilities if rented for periods of less than six months in continuous duration. The rule purports to make owners and/or rental agents for owners of individually-owned condominium units liable for the collection and payment of the applicable sales tax due on the rental. The petitioners in this proceeding are owners and/or rental brokers or agents for owners of individually-owned condominium units in Sarasota, Florida. G & B Properties, Inc. and Sarasota Surf Vacation Rentals, Inc. each had over $1 million in gross rental revenues last year. Many, if not most, of their present leases and rental contracts were entered into prior to the effective date of the challenged rule and the five percent sales, or transient rental, tax was not incorporated into those rental contract terms. The challenged rule has or will cause certain changes in the operations of these petitioners. Additional staff and overtime work are required to notify lessees of the newly imposed tax. New bookkeeping materials are required to account for and handle the tax, and supplies on-hand can no longer be utilized. One real estate agent estimated the expense of changing his bookkeeping system to be $1,500. This agent also opined that a considerable block of renters has been lost due to the increased five percent charge and change in contract terms, and that there has been a loss of goodwill between himself, as a rental agent, and condominium owners and tenants who have entered into lease agreements in years past without the imposition of the tax. Prior to the adoption of the challenged rule, the respondent's rules did not address individual condominium units and a transient rental tax on such units was not collected from tenants, owners or rental agents by the Department of Revenue. The "summary of the estimate of economic impact of the rule" contained in the notice of the amendment of Rule 12A-1.61 appearing in the October 1, 1982, edition of the Florida Administrative Weekly, Volume 8, No. 39, page 2686, provides as follows: "None. The proposal contains amendments to existing rules and is predicated upon legislation enacted. The fiscal impact occurred upon the amendment to 212.03, F.S. by Chapter 97-359, Laws of Florida." The actual Economic Impact Statement prepared for the challenged amendment recites that the cost to the respondent of implementing the amendment is estimated at $15,122, and the "amount of paperwork is substantial." For the "estimated cost or economic benefit to persons directly affected by the proposed action," the Economic Impact Statement notes that the Revenue Estimating Conference has identified the revenue loss as $2,702,000. It lists those classes of persons (tenants) exempted from the tax as persons benefiting from the rule, and further states that the revenue loss of $2,702,000 will be offset by about $200,000 resulting from the taxable status of certain condominium rentals. The Economic Impact Statement provides that the rule "will not place any business at a competitive disadvantage, nor will it have any impact on the open market for employment." In its "statement of data and method used in calculating estimates," the Economic Impact Statement sets forth the basis for the $15,122 agency cost of promulgating and implementing the proposed rule. It then states that the "revenue impact is based on Revenue Estimating Conference consensus estimates." Neither the "Revenue Estimating Conference," its "consensus estimates" nor the basis or methodology utilized in its figures are further identified or explained in the respondent's Economic Impact Statement. According to the respondent's Director of Research, Planning and Budgeting, the Revenue Estimating Conference is an informal body under the Governor's office consisting of the State Economist and two legislative staff directors whose purpose is to develop revenue forecasts, impacts and estimates in a non-political environment. The figures utilized in the Economic Impact Statement for the challenged rule are taken directly from those utilized in connection with the passage of a 1979 amendment to Section 212.03, Florida Statutes, by Chapter 79-359, Laws of Florida. The respondent did not attempt to make its own estimate of revenues or costs or economic benefits to persons directly affected by the proposed rule, nor did the respondent request the Revenue Estimating Conference to revisit its 1979 estimate of economic impact. The instant petition challenging the validity of Rule 12A-1.61 was filed by the petitioners with the Division of Administrative Hearings on December 2, 1982. By Order of Assignment dated December 10, 1982, the undersigned was designated as the Hearing Officer. By letter dated December 14, 1982, the undersigned suggested a final hearing date of January 3, 1983. The undersigned was informed by telephone message from counsel for the petitioners that the parties were going to file a stipulation waiving the requirement that a hearing be held within thirty days. While a written stipulation was never received to this effect, it was the understanding of the undersigned that the parties did not desire to utilize the previously suggested hearing date of January 3, 1983. Through telephone conversations between the offices of the Division of Administrative Hearings and counsel for the petitioner, a hearing date of January 10, 1983, at 4:00 p.m. was originally made available and then was changed to January 14, 1983, because more hours were thought to be necessary to complete the hearing. On January 12, 1983, a notice of appearance as co- counsel for the respondent was filed, as was a Motion to Dismiss or, Alternatively, to Stay Proceeding on the ground that the Division of Administrative Hearings lacked jurisdiction to entertain this rule-challenge proceeding inasmuch as the hearing was not scheduled within the thirty days required by Section 120.56(2), Florida Statutes. Oral argument on this motion was heard prior to the commencement of the final hearing on January 14, 1983. Finding that counsel for the petitioner reasonably believed that respondent's counsel had agreed to waive the thirty-day hearing requirement and that respondent had not demonstrated that it had been prejudiced in any manner whatsoever by the four-day delay in commencing the final hearing, the Motion to Dismiss or Stay was denied.
The Issue The issue for consideration in this hearing is whether Respondent's license as a real estate broker in Florida should be disciplined because of the matters alleged in the Administrative Complaint filed herein.
Findings Of Fact At all times pertinent to the issue herein the Petitioner, Division of Real Estate, and the Florida Real Estate Commission were the state agencies responsible for the licensing of real estate professionals and the regulation of the real estate profession in Florida. Respondent was licensed as a real estate broker with license number 0414476. Respondent was operating as a real estate broker and operated a real estate brokerage under the name Roney Realty located at 424 Beach Drive Northeast, Number 205, in St. Petersburg. In early 1995, Kathleen M. Mitchell, a single mother and licensed practical nurse, while attending a garage sale, noticed a two bedroom house for sale at 805 59th Street South in Gulfport and called the broker's telephone number shown on the sign. Respondent was the broker listed. On the basis of that telephone call, Respondent and Ms. Mitchell met at the house, owned by Respondent's sister. At the time, Ms. Mitchell advised Respondent that she had credit problems and was burdened with a previous FHA mortgage which was in default. In response, Respondent urged her not to worry and assured her he could get her financing even though she had undergone a prior bankruptcy. He also indicated that the selling price for the house was variable, depending on financing and the amount of the down payment. Ms. Mitchell contends that Respondent indicated to her that he would represent both buyer and seller in a dual agency arrangement, which he got her to acknowledge in writing, and claimed he would not take a commission on the sale. The initial contract signed in this case, however, lists a commission of $1,925.00 to be paid by the seller. This inconsistency was not explained. As a result of the initial negotiations which began in January, 1995, Ms. Mitchell signed a contract for the purchase of the property on February 13, 1995, which, she claims, was to be effective in March, 1995. This agreement, reflecting a sales price of $55,000 also indicates that Ms. Mitchell had made a $200.00 cash down payment, and called for an additional payment of $800.00 within 5 days of signing and an additional $650.00 at closing, to include buyer's closing costs and prepaid items or prorations. This left a balance to be financed of $53,350. There were no other handwritten clauses placed on the contract form. Ms. Mitchell paid the initial $200.00 and agreed to pay the additional $800.00 when she moved in. On the basis of that contract and the deposit made, Ms. Mitchell was allowed to move into the house. Approximately two weeks later, when it became obvious that her financing was going to be a problem, Mr. Roney brought a second contract to the house for her to sign. At this time, Mr. Roney suggested that while the parties were waiting for her financing to be approved, Ms. Mitchell could rent the house for $500.00 per month. Ms. Mitchell agreed to do this if all the defects in the house, which she had identified and reported to Respondent, were fixed. She claims that he verbally agreed to fix everything and she thereafter signed the second contract, which is undated as to signature, but which bears an effective date of April 20, 1995. The second contract reflects a purchase price of $56,650, a deposit of $2,832.50, and a balance to finance of $53,817.50. Ms. Mitchell admits to having made the $200.00 down payment, and it is not clear whether she also paid the $800.00, but at one point in her testimony indicated that is all she paid by way of down payment. She has no idea where the figure of $2,832.50 comes from. Yet, at another point in her testimony, she claims to have given Mr. Roney $1,650.00 on March 1, 1996, which money he put into Stewart Fidelity Title Company's escrow account. The contract also reflects that the deposit is being held in escrow by Stewart Fidelity Title Co. No information was presented as to the current state of the deposit. This contract shows substantial hand-written modification to the standard contract clauses which clearly reflect that changes were made on July 7, 1995, and were "added after signing." However, there are substantial, modifications to paragraph 21 of the contract form, "additional terms", which are confusing as to when they were added and what they mean. For example, one added clause calls for the buyer to make monthly payments of $600.00 until closing ($100.00 per month credited back to buyer at closing). Another provides that the buyer accepts the property as is from day of possession and agrees to maintain the property until closing. A third indicated that the seller agrees to credit $650.00 toward buyer's costs upon closing, and a fourth states that if the buyer cannot obtain a mortgage within one year of possession, the seller may convert the agreement to a lease. The difficulty in interpretation of the above rests in the fact that arrows pointing to various of the comments are not defining in their application. For example, one arrow comes from the word "closing" down the side of the paper into the Acceptance/Rejection section where is stated, "as is meant landscaping [sic]." Another arrow points to the word "may" in the last addition and reflects, "7-7-95 added." Ms. Mitchell adamantly contends that when she signed the second contract, none of the hand-written additions were on it. Mr. Roney admitted as much at hearing, but no informationwas presented to indicate if the additions were agreed to by Ms. Mitchell at any time. She contends that when she saw those post-signing additions, she took the document to her mortgage person who directed her to contact Respondent and stop further proceedings. When Ms. Mitchell did that, she claims, she wastold by Mr. Roney not to talk to her mortgage man again, and that his, Mr. Roney's, mortgage broker would handle the obtaining of her mortgage from then on out. When Ms. Mitchell recounted those instructions to her original mortgage broker, he advised her to contact Respondent's escrow agent, get her deposit back and cancel the contract. Respondent admits to having requested Ms. Mitchell use a different mortgage broker but asserts this was because her broker was not having any apparent success in getting her qualified. Ms. Mitchell lived in the house in question for two months before she moved out. Upon the advice of an attorney, she claims, she paid no rent while she occupied the premises. While she occupied the property, she paid $250.00 to have it appraised by a state certified residential real estate appraiser who opined that as of May 9, 1995 the property was valued at $49,500. In the addendum to the appraisal report, the appraiser stated: The roof has active leaks and improperly installed areas; The front soffit has loose conditions; The electrical system has unsafe wiring and improper size fuses; The heating and AC units are not operating properly ("No source of heat"); The plumbing system has some deficiencies and possible leaks; The pool is in need of "Major Repair", including repair of leaking conditions at the main drain and tiles; termite damage was noted; the water heater needs repair (or replacement), and it is exposed to weather conditions; Window and door screens are missing; The lawn sprinkler is damaged and partially disassembled The storage shed has rust conditions. Though at hearing Respondent attempted to dismiss this appraisal as being based on the home inspection reports done at Ms. Mitchell's request previously and given the appraiser, and not his personal inspection, a review of the document clearly indicates the conditions noted above were determined from review of that report "and/or observation by the appraiser." Ms. Mitchell experienced first hand many of the problem areas noted in the appraisal report. When she mentioned to Respondent that the screen door was missing, he reportedly told her it wasn't necessary. When she complained to Respondent that she had no hot water for several days, he sent over a repairman who ultimately corrected the problem. The repairman's statement, dated "May, 1995", reflecting a charge of $445.00 for his service, indicates he repaired a water leak on the hot water heater; unblocked a restriction in the hot water supply pipe; and replaced defective control knobs on the shower. He also cut the side of the kitchen counter to fit in a new stove and delivered a replacement refrigerator with an ice maker and reconnected the water line to it. This latter installation was the result of Ms. Mitchell's continuing complaint that the refrigerator did not work for quite a while which resulted in her losing a substantial amount of perishable food. The first time that happened, she though it might be her fault and she replaced the lost food. However, when it happened again, she complained to Respondent and he told her to get it fixed. She did, at a cost to her of $100.00, which Respondent did not pay back. Finally, a refrigerator repair man was sent to the property on both April 4 and April 19, 1995. He finally recommended the unit not be repaired but replaced. This was done. When Ms. Mitchell complained to Respondent that the heating and air conditioning unit in the living room did not work, and that the bedroom unit did not heat, she admits that Respondent had a repairman come out and look at the unit. Though she claims the repairman told her it would take $483.00 to repair it, she appears to have confused the appliances, as the repairman's statement, dated April 19, 1995, refers to an estimated cost of $483.00 to replace the compressor on the refrigerator, not the heater/air conditioner. There is no evidence to indicate how the problem with those units was resolved. Ms. Mitchell contends that when she first saw the swimming pool, before she contracted to buy the house, it was clear and the pump was running. When she thereafter heard a noise in the pump, in February, 1995, before she moved in, she reported this to the Respondent. Nothing was done about it. After she moved in, the pool rapidly became unusable. The pump motor was inoperative and the water turned green. Ms. Mitchel claims she called Respondent almost daily about the pool. He told her his sister had the motor removed for repairs and he would get it back. The motor was subsequently returned, along with the pool equipment which had been removed, but the pool leaked, requiring her to add water every day, and she could not keep the water clear. In late April, 1995, a pool man was sent to the property who, according to Ms. Mitchell, indicated that there was a need to replace loose tiles and mastic because of the age of the pool, and a leak at the main drain. It is not clear from the evidence presented if these repairs were made. When the appraisal report was rendered, showing a fair market price considerably less than what she had contracted to pay, Ms. Mitchell advised Respondent on several occasions that she to cancel the contract. On May 2, 1995, after she had seen an attorney and another real estate broker, she wrote to Respondent requesting either that he refund the deposit money she had placed with him and reimburse her in the amount of $500.00 for her personal expenses, in which case she would vacate the property within one week of receipt of the money, or return her deposit within one week, in which case she would vacate the property by June 1, 1995. In either case, she indicated she would pay no more rent. In that regard, it appears she had paid no rent up to that time, though she had agreed to pay rent in the event they could agree upon the terms of a contract and the property was repaired. She claims she did not expect to live in the property rent free, but believed that what she had paid out in repairs was fair rent for her occupancy. No clear total figure for what she paid out was provided. In response, Ms. Mitchell received a letter from the Respondent in which he demanded payment of the rent due. Thereafter, on June l, 1995, Ms. Mitchell received a second letter from the Respondent in which he stated he assumed she had agreed to deduct the amount due for rent from the deposit money she had placed with him and which he held in escrow. According to Respondent's calculations, Ms. Mitchell owed $1,271.56 in back rent after crediting her with $100.00 of the $600.00 per month rent payment she was to make. When this $1,271.56 was deducted from the $1,603.45 escrow balance held by him, $331.89 would be left in the escrow account. Respondent gave her the choice of doing that or of paying what was owed in case, leaving the entire escrow account untouched. He advised her she must make her choice and advise him and the escrow agent within forty-eight hours. Respondent did not satisfactorily explain his calculations at hearing. From the state of the evidence presented, it was impossible for the undersigned to determine exactly how much money Ms. Mitchell paid by way of deposit, rent, or repairs. Between the receipt of Respondent's first and second letters, Ms. Mitchell spoke with him about the condition of the house and what she wanted to do with regard to it. At no time did she authorize Respondent to make any deduction from the amount in escrow. In the interim, she began to look for another house and to seek alternative funding. She also tried to contact Respondent but she was unable to do so, reaching only his pager. Finally, she received a three-day notice dated June 20, 1995 to pay the rent due or vacate. In response, she wrote an undated letter to Respondent in which she said she was sending $1,000.00 to pay $500.00 rent for both May and June, 1995, but neither mailed the letter nor sent the money. Thereafter, she received a second three day notice dated June 30, 1995, directing her to pay the rent due or move out. This notice was left in her mail box by the Respondent. She neither paid the rent nor moved out at that time. Ms. Mitchell finally moved out of the property in issue on July 18, 1995 and thereafter, on a weekly basis, either verbally or in writing, demanded return of her deposit. She did not get it back. Mr. Roney's account of the beginning of the parties' relationship is consistent with that of Ms. Mitchell, except that Ms. Mitchell initially indicated the property could not be worth more than in the mid-forty thousand dollar range. In response, Respondent claimed to have done a market analysis on the property which supported the asking price, and because his sister had put a lot of money into the property, it could not be sold for a price as low as even in the high forty thousand dollar range. It would appear from the independent appraisal done of the property, the true value was closer to Ms. Mitchell's estimation rather than Respondent's. Nonetheless, Ms. Mitchell liked the property and agreed to buy it at the asking price, after she had looked it over with a contractor friend of hers. Respondent admits that Ms. Mitchell was forthright with him in disclosing her financial problems. She told him of her bankruptcy of several years previous, and in response to his questioning, noted several other problems, none of which, by her account, were her fault. When Ms. Mitchell called Respondent on February 13, 1995, indicating she was ready to sign, he referred her to a mortgage company which he felt could help her. Based on what information Ms. Mitchell had provided, Respondent had been told that her financial problems were "fixable". As a result, the first contract was signed and the financing process initiated. On March 18, 1995, Ms. Mitchell called Respondent and indicated she wanted to move into the house prior to closing because her current landlord would neither acknowledge nor fix defects in her property, and she had to get out. Therefore, on or about March 20, 1995, Respondent re-wrote the contract and requested she use another mortgage broker as a condition of taking possession prior to closing. Respondent claims that the seller's disclosure as to the condition of the property was accurate but Ms. Mitchell wanted an independent inspection done to which Respondent agreed. He insisted, however, that if she wanted to move in before closing, she would have to take the property "as is." He advised Ms. Mitchell that his sister had not lived in the property for a year. It was not clear from the evidence presented whether the property was vacant for that entire year or whether it had been rented out. Ms. Mitchell moved in after signing the second contract. Respondent claims Ms. Mitchell called almost daily with some complaint or other and he would have each one fixed. Finally, he met with her and the handyman and they went around to check everything out. She seemed satisfied. Nonetheless, after that Ms. Mitchell called to complain about the swimming pool. Respondent's sister and the handyman both went to the house to explain how to work the filtration system. To insure that there was no leak in the pool, Respondent gave Ms. Mitchell the name of the pool company which had serviced the pool for ten years so that if anything went wrong, she could contact them directly to have it checked and get instruction. While Respondent contends the pool company report indicated no leak and no major problems, Ms. Mitchell wrote on the invoice submitted by the repairman dated April 25, 1993, "... notified me and Mr. Rony [sic] of need to replace loose tiles and main drain leak and re- mastic due to extreme age of pool." Unfortunately, no direct evidence was presented which resolves the apparent inconsistency in the evidence. Mr. Roney claims he tried to remedy any problem Ms. Mitchell had with the house. For example, on April 3, 1995, she called to complain about the refrigerator. On April 4, 1995 he told her to call whomever she wanted, and if the estimate were reasonable, she could deduct the repair charge from the rent. If the charge were estimated to be major, she was instructed to call back. When she called and said the charge would be $100.00, he authorized it. However, a week later, Ms. Mitchell again called and complained about the refrigerator and Mr. Roney replaced it the next day. The problems with the refrigerator are documented by independent evidence of record. The replacement there was admitted by Ms. Mitchell. Respondent asserts that the delinquency notices and track toward the closing. When he found out that Ms. Mitchell was trying to get an appraisal done on the property, he tried to tell her that an appraisal would be done as a part of the mortgage process, but she wanted her own. The results of that independent appraisal were discussed previously. Sometime thereafter, Ms. Mitchell told Respondent she wanted out of the contract. The seller agreed to let her out if Ms. Mitchell would pay some rent for the period she occupied the property. As a result, Respondent tried to get her to pay. When she would not, he sent the eviction notices. Respondent admits he did not receive $2,853.00 in deposit money from Ms. Mitchell. That figure cited was the result of her representations to him that she could come up with it. When the contract was signed, she gave him a check for a part of it and said she'd come up with the balance, but she never came up with the full amount. Any deposit payments made by Ms. Mitchell were deposited with Stewart Title Company where it remains. It is impossible to determine how much was paid as deposit by Ms. Mitchell and how much, if any as rent. Respondent asserts Ms. Mitchell never made any claim to him for return of her deposit. Any claims for return were all made to Stewart Title. Ms. Roney, the owner, did not want to lease the property or sell it on a lease option. She wanted to sell it outright because she needed the money for other investments. She agreed to a lease-purchase arrangement only because the mortgage broker assured her Ms. Mitchell could clear her credit and the sale could go through. She also agreed because Ms. Mitchell had had the property inspected and appeared to be satisfied with its condition. Ms. Roney claims she had no problems with the pool when she lived there and also claims that since the property has been sold, the new owners have not contacted her regarding any problems with the pool. She would not approve a refund of deposit under the conditions of this dispute. Respondent contends there have been no complaints filed against him for the practice of his real estate profession in the 15 years he has been licensed. No evidence of prior misconduct was shown.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a final order finding Respondent not guilty of misrepresentation and breach of trust in a business transaction and dismissing the Administrative Complaint. DONE and ENTERED this 13th day of December, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 this 13th day of December, 1996. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Paul H. Roney, Jr. 424 Beach Drive Northeast, Suite 205 St. Petersburg, Florida 33701 Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact The Respondent, Susan Ellen Walton, was a registered and licensed real estate broker at all times material hereto. The Respondent, Walton Associates, Inc., was a licensed real estate broker at all times material hereto. The Respondents have been issued licenses numbered 0092944 and 0111791, respectively. The Petitioner is an agency of the State of Florida charged with regulating the licensure status and practice of real estate brokers, broker salesmen and salesmen in the State of Florida. In October of 1979, Richard E. Turner, Jr. was moving from Gainesville, Florida, to the Daytona Beach, Florida, area. Mr. Turner took two days in October, 1979, and went to Daytona Beach to look for some rentals. He was unable to find any suitable housing through his own efforts so he went to the Respondents' rental agency asking for information regarding residential rental property. Mr. Turner ultimately entered into a written agreement with the Respondents whereby the Respondents would supply him with a list of rental homes that were within his stated financial means. In return for this service, Mr. Turner paid a $40.00 fee to the Respondents. The Respondents supplied Mr. Turner with a list of approximately four homes in the $175.00 to $225.00 per month rental price range. These homes proved to be unsuitable to live in or, on the day in question, were already rented. Mr. Turner therefore returned to the Respondents' office to obtain a second list of homes. He encountered the same problem with the second list of homes supplied him by the Respondents. Mr. Turner then went back to the Respondents' office the third time and was given three or four more houses to survey. On this list, one listing in particular was a house located at 118 Rio Way in Riviera Oaks Subdivision. The rental price stated for that house was approximately $375.00 per month. Mr. Turner made an extensive search to look for 118 Rio Way, but was unable to find the address. He drove all the way around Rio Way and, being unable to locate 118, went to the Riviera Oaks Subdivision sales office on Calle Grande, which was the street on the other side of the Rio Way circle. Riviera Oaks is a Tompkins Development subdivision. Mr. Turner stopped at the Tompkins Development office and talked to a saleswoman, Debbie Snowden, to see if there was a 118 Rio Way address in the subdivision. Ms. Snowden showed him a map of the subdivision in her office which revealed that there was not a 118 Rio Way address listed. Being therefore unable to locate a 118 Rio Way address and rental house, Mr. Turner returned to the Respondents' office. The person who had been helping him in the Respondents' office indicated that the card in their file describing the rental property supposedly at 118 Rio Way showed that a Mr. Frank Kenney was the individual to contact concerning information on that residence. Mr. Turner attempted to reach Frank Kenney but was unable to do so. He returned to Riviera Oaks to see if he could locate Frank Kenney in that subdivision. He went to the sales office and was told by Ms. Snowden that she knew Mr. Kenney, who had formerly worked at her office and, in fact, she now held his former job. With Ms. Snowden's help, Mr. Turner attempted to locate Mr. Kenney once again and was unable to do so. On this occasion, Ms. Snowden attempted to sell Mr. Turner a house and he told her that he would consider it. That same evening, Mr. Turner continued his attempt to find Frank Kenney and was unable to do so. Turner was becoming irritated regarding finding any available rental property. He accordingly returned to see Ms. Snowden at the Riviera Oaks Subdivision and had her show him and his wife a house for possible purchase. They ultimately signed a Contract of Sale for a residence located at 108 Rio Way in the Riviera Oaks Subdivision. That contract was dated October 4, 1979. The Turners gave the Tompkins Development Company a $100.00 deposit on the purchase of this house. After signing the Contract for Sale, the Turners contacted the Respondents about receiving a refund on the rental fee arrangement. Mr. Turner filled out the necessary form in order to obtain the refund of his $40.00. This form was sent to the Respondents and the Respondents were otherwise informed by Mr. Turner that he wished his $40.00 refunded within 30 days from the date Mr. Turner first contacted the Respondents regarding obtaining information about rental property. Mr. Turner subsequently received a speed message bearing the date November 30, 1979, from the Respondents stating that his request for refund had been refused. The speed message was signed by S. Walton of Walton Associates, Inc. (see Petitioner's Exhibit 10). Before denying a refund to the Turners, the Respondent, Walton, contacted Debbie Snowden at Riviera Oaks Subdivision office and asked her if the Turners were indeed renting a house from her, and she responded that they were not renting a house, but were temporarily leasing a house at 108 Rio Way until they could effect the closing of a loan so they could consummate the purchase of that same house. Prior to the execution of the contract, Mr. Turner had told Ms. Snowden that they needed a place to live until the closing of the conveyance of the house and it was agreed by all parties that they could move into the house while awaiting approval on their loan and the subsequent closing, provided the Turners signed a Lease and Occupancy Agreement. The Lease and Occupancy Agreement was required because on past occasions people had put up a deposit of $100.00 on a house and stayed in that house for several months and then left without paying any further for the use of the house. The Lease Occupancy Agreement from Tompkins Development is not a normal procedure, but the general manager for Tompkins Development, Pat Gallo, occasionally lets people move into homes under a Lease and Occupancy Agreement pending closing on that same home for which they have already contracted to purchase. Under the Lease and Occupancy Agreement in question, the Turners were required to pay the costs of the construction loan, which was $10.48 per day. Further, Tompkins Development was shown to be a sales company, dealing only in sales or residential real estate and not engaging in rental of rental property management at all. The only way Tompkins Development would have leased a house such as this one to someone is if the parties seeking to lease the house were under a contract to purchase that house. Tompkins Development simply did not make a practice of advertising homes for rental and did not seek to service individual families coming to them looking for rental housing. After signing the Contract of Sale for the house on October 24, 1979, the Turners moved into the house at 108 Rio Way. One day after they moved into that house, a rain storm flooded the street and so they approached Ms. Snowden regarding that problem and advised her that they did not then wish to buy the house if it was going to be subject to periodic flooding after each heavy rain. After some negotiation, they then signed the contract for 1018 Calle Grande, but this contract was apparently not accepted by the home office of Tompkins Development. The Turners ultimately entered into a contract on March 29, 1980, for a home located at 112 Camino Circle. This contract was subsequently renegotiated and re-executed on May 12, 1980, due to a change in the type of FHA mortgage loan the Turners were obtaining. On July 31, 1980, the Turners closed and completed the conveyance on the house located at 112 Camino Circle. At no time during this series of events did the Turners nor Ms. Snowden nor Tompkins Development mutually agree or understand that the contractural arrangement they had undertaken was for a rental of the house at 108 Rio Way, rather it was, as described above, merely a convenient method whereby the Turners could pay the cost of the construction loan pending the closing of the permanent financing on the dwelling in return for living in it as a convenience to them until time for closing. It was established that prior to October, 1979, neither Debbie Snowden, the saleswoman who negotiated the sale of the residence at 108 Rio Way with the Turners, nor the previous salesman, Frank Kenney, had ever heard of the Respondents, nor did Tompkins Development have a non-exclusive rental agreement (or any other kind) with any rental agency in the Daytona Beach area, including Respondents. The Respondents' real estate brokers licenses have previously been suspended on one occasion in December of 1981 by the Board of Real Estate, now the Florida Real Estate Commission. Their licenses were suspended for a period of 120 days, with 30 days of that penalty period being suspended upon the Respondent, Susan Ellen Walton, making full restitution of a $40.00 rental fee to one Narenda H. Patel. That suspension stemmed from the Respondents' failure to make a refund of a $40.00 rental fee upon demand by Narenda H. Patel within 30 days of the rental fee agreement after Patel was unable to secure a rental using the Respondents' rental fee service.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That the Respondents, Susan Ellen Walton and Walton Associates, Inc., have their licensure status suspended for a period of ninety (90) days, with thirty (30) days of that period suspended provided that the Respondent, Susan Ellen Walton, makes full restitution of the $40.00 due and owing to Richard Turner within ten (10) days of the entry of the Final Order herein. DONE and ENTERED this 8th day of December, 1982, in Tallahassee, Florida. P. MICHAEL RUFF 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 December, 1982. COPIES FURNISHED: John G. DeLancett, Esquire and James R. Mitchell, Esquire 801 North Magnolia Avenue, Suite 402 Post Office Box 6171-C Orlando, Florida 32853 Edward L. Cook, Esquire 1885 Lee Road Winter Park, Florida 32789 William M. Furlow, Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C. B. Stafford, Executive Director Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802
The Issue Whether Respondent's license as a real estate broker should be suspended or revoked, or the licensee otherwise disciplined for alleged violations of Chapter 475, F.S. as set forth in Administrative Complaint dated December 22, 1981. This proceeding arises from the filing of an administrative complaint by the Board of Real Estate against Jack Braunstein on December 22, 1981, which alleges that he failed to refund an advance rental fee to Annette Richard on May 13, 1980, thus violating a duty imposed upon him by law or by the terms of a listing contract in a real estate transaction in violation of subsection 475.25(1)(b), Florida Statutes. The complaint further alleges that Respondent thereby violated subsection 475.25 (1)(d), Florida Statutes, in failing to account to Ms. Richard, and violation of Section 475.453, Florida Statutes, for failing to provide repayment of any amount over 25 percent of the fee for rental information, if the prospective tenant does not obtain a rental. Respondent requested an administrative hearing, and the case was referred to this Division for assignment of a Hearing Officer on February 8, 1982. At the commencement of the hearing, the parties stipulated as to the truth of Paragraphs 2-3, 5-7, 9-11, and 19-20 of the Administrative Complaint. The parties further stipulated that Respondent was licensed by Petitioner at the time of the incident alleged in the Administrative Complaint. Respondent objected to the proceeding on various grounds, as reflected in the transcript of the hearing. The Hearing Officer treated the objection as a motion to dismiss and denied the same. Petitioner moved to amend Paragraph 22 of the Complaint to correct a typographical error to allege a violation of subsection 475.25(1)(d), F.S. in lieu of the inadvertent recitation of a violation of subsection 475.25(d), F.S. The motion was granted. The post-hearing submission by the Petitioner has been fully considered, and those portions not adopted herein are considered to be either unnecessary, irrelevant, or unwarranted in fact or law.
Findings Of Fact Respondent Jack Braunstein is licensed as a real estate broker and was so licensed at all times relevant to the matters alleged in the Administrative Complaint. Respondent operates Rent-Aid, Inc. located in Fort Lauderdale, Florida, a corporate real estate broker, He is the active broker for that firm. (Petitioner's Exhibits 1-2, Stipulation) On April 15, 1980, Annette H. Richard went to Respondent's firm to ascertain the availability of an apartment for rent in the school district where her child attended school. She had previously talked to Respondent by telephone concerning her needs, and Respondent had informed her that rentals were abundant and that she should come into the office. After she arrived, Respondent turned her over to his associate Jeannie Nemett who took down the information concerning Ms. Richard's apartment requirements. Ms. Nemett informed her that they could find her an apartment in the area, but had nothing available at that time. Although Ms. Nemett looked through the firm's book of apartment listings, she did not permit Ms. Richard to do so. Ms. Nemett told her that there was a new duplex listing not far from the desired area and Ms. Richard agreed to look at it. Ms. Nemett had explained the fact that the firm's services were available for a $50.00 "membership" fee. Since Ms. Richard did not have the money with her, she and Ms. Nemett stopped at the bank on the way to see the property and, after paying the requisite fee, Ms. Nemett gave her a copy of the "membership" agreement. She then showed the duplex and one other rental apartment to Ms. Richard. (Testimony of Richard, Nemett, Petitioner's Exhibit 3) A few days later, Ms. Nemett, having identified some existing available apartments in the school district area in her book of listings, called Ms. Richard several times but could not reach her. The messages were recorded on a telephone answering device. Ms. Richard did not return the calls immediately. About four days after having been shown the duplex by Ms. Nemett, she found an apartment which met her needs as a result of a newspaper ad. Prior to locating this apartment, Ms. Richard had also left telephone messages for Ms. Nemett which had not been returned. About a week or ten days after their initial meeting, Ms. Richard telephoned Ms. Nemett and informed her that she had secured her own apartment and did not wish Rent-Aid, Inc. to proceed any further in her behalf. (Testimony of Nemett, Richard, Petitioner's Exhibit 3) The agreement signed by Ms. Richard with Rent-Aid, Inc. included the following statement: If you do not obtain a rental you are entitled to receive a return of seventy-five percent of the fee paid, if you make demand within thirty days of this contract date. All notices shall be sent by certi- fied mail. A rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. (Emphasis added) By letter dated May 10, 1980, Ms. Richard requested a refund of her $50.00 fee from Rent-Aid, Inc., but by letter dated May 13, 1980, signed by Ms. Nemett, Ms. Richard was informed that a refund could not be made, as follows: It has been construed that the obtaining of rental property is when you receive listings--available, shown by us, in your price range and area, or any other listings which you agree to see. We did, in fact, show you available rental property under the terms of the Rent-Aid policy #011061. Also at that time, I left messages on your answering machine, concerning other avail- able rentals. Under the conditions and terms of this policy--a refund cannot be made. On advice of counsel, Respondent refunded the amount of $37.50 to Ms. Richard on January 11, 1982. (Testimony of Richard, Respondent, Petitioner's Exhibits 4-5) On March 27, 1980, Respondent's attorney wrote to Salvatore A. Carpino, Staff Attorney of the Department of Professional Regulation enclosing Rent-Aid, Inc.`s contract form and requesting review of it to determine whether or not it met the requirements of Chapter 475. The form sent to Mr. Carpino contained the same language as that used in the Richard transaction. By letter of April 1, 1980, the attorney informed Respondent that he had heard from the Department of Professional Regulation about the case and that the form would be acceptable if he deleted the word "registered" in "registered mail." Thereafter, on May 8, 1980, the attorney again wrote Mr. Carpino enclosing print sizes of the form to determine if it met the Department's print size requirements. By letter of May 15, 1980, Carpino informed the attorney that the Respondent could continue to use the existing forms "with the changes that we have previously discussed." Respondent utilized the contract form in question in reliance upon the advice given to him by his attorney in the above regards, and believed that he was operating properly in accordance with the Department's requirements. He had inserted the definition of "obtaining a rental" in the contract form in order to eliminate the vagueness of the statute pertaining to refunds. (Testimony of Braunstein, supplemented by Respondent's Exhibits 1-2)
Recommendation That the Florida Real Estate Commission (formerly Board of Real Estate) issue a private reprimand and impose a $100 administrative fine against Respondent, Jack Braunstein, pursuant to subsection 475.25(1)(d), Florida Statutes. DONE and ENTERED this 20th day of July, 1982. THOMAS C. OLDHAM 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 20th day of July, 1982. COPIES FURNISHED: Bruce Lamb, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Mr. C. B. Stafford Executive Director Florida Real Estate Commission P. O. Box 1900 Orlando, Florida 32801
The Issue The issues in dispute in this matter are as follow: Was the Respondent, Wit Zajack, responsible for the acts of the Respondent, Home Hunters II, Inc., and its employees prior to July 7, 1981, when Zajack's registration as the corporate broker's active firm member became effective? Was Zajack relieved of responsibility for the acts of the corporate broker by appointing a manager and delegating duties to the manager? Did the Respondents use an advance fee rental contract containing information as required by Rule 21V-10.30, Florida Administrative Code? Was the language used in said contract by the Respondents contrary to the intent of Rule 21V-10.30, Florida Administrative Code, and in violation of Section 475.453, Florida Statutes? Did the Respondents fail to refund advance fees upon demand in violation of Sections 475.25(1)(e) and 475.453(1), Florida Statutes? The proposed findings as submitted in this matter by the parties have been considered by the Hearing Officer. To the extent they have not been included in the factual findings in this order, they are specifically rejected as being irrelevant, not being based upon the most credible evidence, or not being a finding of fact.
Findings Of Fact The Respondent, Wit Zajack, is a licensed real estate broker holding License #0219881. The Respondent, Home Hunters II, Inc., was a corporate real estate broker holding License #0218141. At the time of the accounts described in the Administrative Complaint, Home Hunters was operating as a corporate real estate broker. Home Hunters was engaged in a rental service business and advertised rental property information or lists, collecting an advance fee from prospective lessees. Zajack was aware that Home Hunters was engaged in the advance fee rental business from the beginning of his association with the firm. Zajack applied for registration as the active firm member for Home Hunters on March 5, 1981. His application contained various discrepancies and was returned for correction on May 8, 1981. The application was corrected and returned after 20 days 1/ to the Board of Real Estate, whereupon Zajack was registered as the active firm member effective July 6, 1981. On or before May 6, 1981, Zajack was held out to the public as being affiliated with Home Hunters by a sign at Home Hunters' offices on Colonial Drive in Orlando, Florida. At all times material to the allegations of the Administrative Complaint, Zajack was an officer of Home Hunters. Home Hunters used the contract form exemplified in Petitioner's Exhibits 8 and 11 from the start of its business activities until March of 1982. This form does not contain the language required by Rule 21V-10.30, Florida Administrative Code. At least as early as October of 1981, Zajack was aware of the fact that Home Hunters' contract did not meet the requirements of Rule 21V-10.30, Florida Administrative Code. He directed Tom O'Toole, the manager of Home Hunters, to correct the forms around the first part of 1982, but the forms were not corrected. Zajack referred all calls and letters of complaint which he received regarding the failure of Home Hunters to make refunds to O'Toole. O'Toole was given the responsibility to deal with all disputes for Zajack. Zajack did not follow up on the complaints. During this time, Zajack resided in Fort Myers, Florida. O'Toole and Zajack's business partner, Ralph Snyder, Jr., organized and ran Home Hunters. Melissa Diehl entered into an advance fee rental contract with Home Hunters on July 1, 1981, paying Home Hunters $50 for this service Diehl did not receive information on apartments which was consistent with the specifications she had given Home Hunters, or which were available for rental. She called Home Hunters about apartments she saw listed in its advertisements in the newspaper and was advised they had been rented. Diehl located a rental on her own and requested a refund from Home Hunters. She made several demands for a refund but never received a refund. She specifically asked to speak with Zajack but was told he was not available. On June 16, 1981, Brenda Mosely entered into an advance fee rental contract with Home Hunters, paying Home Hunters $50 for its services. Mosely called Home Hunters as required by the contract but did not receive listing information which was consistent with the specifications she had stated in her contract. Mosely orally requested a refund of her money after the 21-day period. She was advised to put her request in writing, which she did. She was denied a refund by Home Hunters on the basis that she had not called for 21 days, because she had not called on weekends when Home Hunters was closed. Ralph Tropf contracted with Home Hunters on March 26, 1981, for rental information, paying a $50 fee to Home Hunters in advance for its services. None of the information he received was consistent with the specifications he had given to Home Hunters. Tropf called for the 21-day period required in the contract and found a rental on his own. On April 16, 1981, Tropf made a written request for a refund. He never received a reply from Home Hunters. Tropf reported the matter to the Better Business Bureau, which forwarded to him the reply of O'Toole which stated Tropf had not complied with the terms of the contract to call for 21 days. On April 27, 1981, O'Toole advised Tropf that Zajack was the person to whom Tropf should detail his complaints. In March of 1981, Mrs. Gwenda Eva Roe had a similar experience to those described above in attempting to obtain a refund of money paid by her minor daughter to Home Hunters for rental information services.
Recommendation Having found that the Respondents, Wit Zajack and Home Hunters II, Inc., are in violation of Rule 21V-10.30, Florida Administrative Code, and Sections 475.453 and 475.25(1)(e), Florida Statutes, it is recommended that the license of Wit Zajack be suspended for one year. DONE and ORDERED this 22nd day of July, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of July, 1982.
The Issue Whether Respondent acted as a real estate agent without being licensed in violation of section 475.42(1)(a), Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the administrative hearing, the following findings of facts are made: COMPLAINT This complaint was instituted when Mr. Manning became aware of a $250.00 payment to a Keller Williams real estate agent (KW agent). Upon inquiring, Mr. Manning was told the fee was to pay the KW agent for securing the third tenant of his rental property located at 12522 Belcroft Drive, Riverview, Florida (property). Mr. Manning was not informed that this process would be engaged, and he was caught off guard when the payment came to light. Mr. Manning was also concerned that he was not receiving consistent payments for the rental of his property. PARTIES Petitioner is the state agency charged with the responsibility of regulating the real estate industry pursuant to chapters 455 and 475. Petitioner is authorized to prosecute cases against persons who operate as real estate agents or sales associates without a real estate license. At all times material, Respondent was not a licensed real estate broker, sales associate or agent. Respondent is a co-owner of J & D Associates, a property management company that he owns with his wife, Ms. Woltmann. Additionally, J & D Associates was not licensed as a real estate broker, sales associate or agent. PARTICULARS In 2012, Mr. Manning was serving in the U.S. Air Force, and was stationed in the Tampa Bay area of Florida. At some point, Mr. Manning received military orders to report to Texas for additional cross-training. Mr. Manning wanted to sell his property, and he was referred to Ms. Woltmann, a Florida licensed real estate agent. Mr. Manning and Ms. Woltmann met and discussed the possibility of selling Mr. Manning’s property. Ms. Woltmann performed a market analysis and determined that Mr. Manning would have to “bring money” to a closing in order to sell his property. Mr. Manning made the decision that he would rent his property. Thereafter, Ms. Woltmann introduced Mr. Manning to Respondent. Mr. Manning assumed that Respondent was a licensed real estate agent. If he had known that Respondent was not a licensed real estate agent, Mr. Manning would not have hired Respondent. On or about April 26, 2012, Respondent executed a “Management Agreement”5/ (Agreement) with Mr. Manning, regarding his property. The Agreement provided in pertinent part the following: EMPLOYMENT & AUTHORITY OF AGENT The OWNER [Mr. Manning] hereby appoints J & D Associates as its sole and exclusive AGENT to rent, manage and operate the PREMISES [12522 Belcroft Drive, Riverview, Florida]. The AGENT is empowered to institute legal action or other proceedings on the OWNER’S behalf to collect the rents and other sums due, and to dispossess tenants and other persons from the PREMISES for cause. * * * RESPONSIBILITIES OF THE AGENT: In addition to the forgoing authorizations, the AGENT will perform the following functions on the OWNER’S behalf. Collect all rents due form [sic] the tenants. Deduct from said rent all funds needed for proper disbursements of expenses against the PROPERTY and payable by the OWNER, including the AGENT’S compensation. Collect a security deposit received from a tenant of the PROPERTY and place it into an escrow account as required by the laws of the State of Florida. COMPENSATION OF THE AGENT: In consideration of the services rendered by the AGENT, the OWNER agrees to pay the AGENT a fee equal to FIFTY PERCENT (50%) OF THE FIRST MONTH’S RENT AND ten percent (10%) per month of the monthly rent thereafter during the term of the tenancy as management fees for the PROPERTY. In the case of holding over the lease beyond the terms of the lease by the same tenant, the Fifty (50%) up front [sic] fee shall also be waived and only the TEN PERCENT (10%) per month fee shall apply. The Fifty (50%) fee shall apply to new tenants only. In the case of a tenant moving out within the first three months of the tenancy, then the fee for obtaining a new tenant and new lease shall be only FIFTEEN PERCENT (15%) of the first month’s rent from the new tenant and TEN PERCENT (10%) of the monthly rent thereafter. (Emphasis added via underline.) At various times, Respondent provided Mr. Manning a list of eligible tenants. Also, Respondent would provide his opinion as to who would be the best candidate to rent the property. Mr. Manning would, “nine times out of ten,” go with Respondent’s recommendation for the rental tenant. In June 2012, “Richard L. Sovich J & D Associates, Agent For Elijah Manning,” executed a “Residential Lease for Single Family Home and Duplex” with a tenant. On the signatory page, the following printed form language is found on the upper half of the page: This Lease has been executed by the parties on the date indicated below: Respondent’s signature is over the “Landlord’s Signature line, “As” “Agent.” On the lower half of the signatory page, the following printed form language is found; the handwritten information is found in italics: This form was completed with the assistance of Name Richard Sovich Address 1925 Inverness Greens Drive Sun City Center, Fl 33573-7219 Telephone No. 813/784-8159 Ms. Woltmann testified that she had a listing agreement for each time she listed Mr. Manning’s property for rent. With each listing agreement, Ms. Woltmann was able to list the property in the multiple-listing system (MLS)6/ while she was associated with the Century 21, Shaw Realty Group. The three listings, as found in Respondent’s composite Exhibit E, included (along with other information) the list date, a picture of the property taken by Ms. Woltmann, and the dates the property would be available: May 5, 2012, for the rental beginning on June 1, 2012, at $1,550.00 per month; November 1, 2012, for the rental beginning on December 1, 2012, at $1,550.00 per month; and March 14, 2014, for rental beginning on May 1, 2014, at $1,600.00 per month. Each time the property was rented, Ms. Woltmann changed the MLS listing to reflect the actual lease dates: June 16, 2012; December 13, 2012; and May 19, 2014, and each was rented at the monthly rental price listed. Ms. Woltmann claimed that the rental price had to be lowered for the second rental. However, the documentation that she confirmed she inputted into the MLS at the time the property was rented, reflects the rental price was not lowered during the second rental period.7/ The rental price was actually raised for the third rental period. Ms. Woltmann also claimed she procured the first two tenants for Mr. Manning’s property and waived (with the consent of her broker agent) her lease fee each time. Three years ago (2014) during the Manning lease periods, Ms. Woltmann “left abruptly” the real estate company she was working for and that company “is now closed.” Yet, she testified that those listing agreements “should be there” if she went back to her broker and asked for them. Based on inconsistencies in her testimony, Ms. Woltmann’s testimony is not credible. Mr. Manning received payments from Respondent for approximately three years totaling “about $45,000.” Mr. Manning paid Respondent “maybe four or five thousand dollars. Maybe a little bit less” for his service. Respondent admitted he received compensation from the rental of Mr. Manning’s property for approximately three years, but denied that he procured any tenants for the property. It is determined that the testimony of Respondent and his wife Ms. Woltmann, is not credible and persuasive. Neither can be considered “disinterested.” The testimony of Mr. Manning is more credible. As the investigator supervisor, Mr. McAvoy is knowledgeable about the purpose of conducting unlicensed activity investigations. Its purpose is “to investigate matters surrounding unlicensed activity within the real estate profession . . . so to protect the public from possible harm surrounding those transactions.” Each investigator is required to record the amount of time spent in an investigation. An investigation was undertaken regarding Mr. Manning’s complaint. Petitioner incurred $49.50 in investigative costs during this case.
Recommendation Upon consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission finding Richard Sovich in violation of section 475.42(1)(a), Florida Statutes, as charged in the Administrative Complaint; and imposing an administrative fine of $500, and $49.50 as reasonable costs. DONE AND ENTERED this 5th day of May, 2017, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 2017.
