Findings Of Fact At all times material hereto, Respondent has been a licensed real estate salesman with license number 0364554. On or about August 13, 1982, Richard J. and Gav Greco entered into a lease purchase agreement with James C. and Phyllis Waid for residential property located at 1685 Markham Woods Road, Longwood, Florida. The purchase price of the Waid property was $190,000 towards which the Grecos made a $10,000 non-refundable deposit and agreed to pay a monthly rental of $1000. On or about November 14, 1982, the Grecos executed an Agreement with Respondent and his wife by which the Grecos assigned all rights and privileges relating to the lease and purchase of the residence at 1685 Markham Woods Road to the Alvarados. The consideration to be given for this Agreement was a payment of $10,000 by the Alvarados to the Grecos, with $5000 payable upon signing of the Agreement and $5000 payable within six months. The Alvarados, as assignees, agreed to abide by all provisions of the lease purchase agreement and were to make their first $1000 monthly lease payment to the Waids on December 4, 1982. Respondent gave Richard J. Greco a check in the amount of $5000 dated November 14, 1982 and requested that he hold the check for a couple of days before depositing it. Greco complied with the request, but was advised on December 3, 1982 that Respondent's $5000 check had been returned unused by Respondent's bank due to the fact that Respondent's account had been closed. Respondent has never paid the Grecos any part of the $10,000 due them under the assignment executed November 14, 1982. Respondent made no monthly lease payments on the property to the Waids. By letter dated February 25, 1983, James C. Waid notified the Grecos and the Alvarados that the lease purchase agreement was in default and that the $10,000 deposit paid by the Grecos was being forfeited because the rent was in arrears. The Grecos paid the Waids an additional $4000 on March 1, 1983, which represented the unpaid lease payments, for a general release from all obligations under the lease purchase agreement. Respondent and his wife executed a promissory note on March 1, 1983 whereby they agreed to pay the Grecos $10,000 on or before March 16, 1983, but no payments have ever been made pursuant to this promissory note. The Grecos brought suit against Respondent and his wife for damages arising out of this transaction, and obtained a Final Judgment on June 30, 1983 in Case No. 83-1191-CA-03-P, Circuit Court in and for Seminole County, in the amount of $15,101.28. The Grecos have not been able to execute this Final Judgment and therefore no payments on this judgment have been made to them by the Respondent or his wife. At the time of this transaction, the Alvarados were family friends of the Grecos. Richard J. Greco entered into this transaction with Respondent primarily because of the personal acquaintance and not because Respondent was a licensed real estate salesman. However, Greco knew that Respondent was licensed and therefore assumed that he was a man of integrity who would deal fairly with him in this real estate transaction.
Recommendation Based upon the foregoing, it is recommended that a Final order be issued suspending Respondent's license for a Period of one (1) Year. DONE and ENTERED this 26th day of August, 1985, in Tallahassee, Florida. DONALD D. CONN, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Fl. 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 1985. COPIES FURNISHED: Susan Hartmann, Esquire Department of Professional Regulation Division of Real Estate 400 W. Robinson St. Orlando, Fl. 32802 Ignacio J. Alvarado 5166 Glasgow Avenue Orlando, Fl. 32819 Harold Huff Executive Director Division of Real Estate 400 W. Robinson Street Orlando, Fl. 32802 Salvatore A. Carpino General Counsel Department of Professional Regulation 130 N. Monroe St. Tallahassee, Fl. 32301 Fred Roche, Secretary Department of Professional Regulation 130 N. Monroe St. Tallahassee, Fl. 32301
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Holly Sanders is licensed by the Department as a real estate broker, having been issued license number 0324563. In June, 1992, Ms. Sanders and Loren L. and Rose Thompson entered into an agreement whereby Ms. Sanders would have the exclusive right to rent an apartment owned by Mr. and Mrs. Thompson. This apartment, unit A-2012 in Brickell Place Condominium, Phase II, was located across the hall from the apartment in which Mr. and Mrs. Thompson resided. Ms. Sanders visited Mr. and Mrs. Thompson periodically to discuss matters relating to the rental, and she grew very fond of Mrs. Thompson. The tenant leasing apartment A-2012 did not intend to renew the lease when it expired in the summer of 1993. Ms. Sanders offered to purchase the apartment for $125,000, a figure which she based on the value of the property used to calculate the ad valorem tax.1 Ms. Sanders prepared a Contract for Sale and Purchase, dated August 16, 1993, reflecting a contract sales price of $125,000, to be paid in cash at closing. Mrs. Thompson retained Richard Olsen, an attorney, to represent her and her husband in the transaction.2 On August 19, 1993, Ms. Sanders, Mr. Olsen, and Mr. and Mrs. Thompson met in the Thompsons' apartment. At the time, both Mr. and Mrs. Thompson were incapacitated. Mrs. Thompson suffered from multiple sclerosis and was in a wheelchair.3 Mr. Thompson was bedridden; he had suffered a stroke and needed full-time care. Both Mr. and Mrs. Thompson are retired attorneys. At the August 19 meeting, Mr. Olsen examined the contract Ms. Sanders had prepared and went over the terms and conditions with Mr. and Mrs. Thompson,4 including the $125,000 contract price and the fact that it was to be a cash transaction. Neither Mr. Thompson nor Mrs. Thompson indicated any dissatisfaction with the terms of the contract. After Mr. Olsen went over the contract, Mr. and Mrs. Thompson and Ms. Sanders signed either four or five originals in his presence. Ms. Sanders gave one duplicate original executed contract to Mr. and Mrs. Thompson5 and one duplicate original to Mr. Olsen. She kept the remaining duplicate original executed contracts. Ms. Sanders did not make any photocopies of the contract. Ms. Sanders was aware that the condominium association had a right of first refusal on the apartment and that she had to be approved by the association in order to purchase the apartment.6 Ms. Sanders personally delivered an application and one of the duplicate original executed contracts showing a contract price of $125,000 to Consuelo Boet, the administrative assistant in the office of Arnold Rabin, the Brickell Place building manager. Ms. Boet did not examine the documents when they were delivered by Ms. Sanders but put them directly into a file containing other applications pending approval. When all of the required documents for apartment A-2012 had been received, Ms. Boet gave them to Mr. Rabin but, again, did not examine the contract. A Certificate of Approval dated October 18, 1993, indicates that the condominium association approved Ms. Sanders as purchaser of the apartment; the contract sales price was not included in this document. Mr. Olsen visited the Thompsons' apartment several times between the time the contract for sale was executed on August 19 and the time the transaction closed on October 20, 1993. The purpose of these visits was to locate the documents relating to Mr. and Mrs. Thompson's purchase of apartment A-2012 in 1988. They had extensive real estate holdings throughout the world, and Mr. Olsen went through many boxes of files trying to locate the title documents needed for the closing. Ms. Sanders was present during each visit Mr. Olsen made to the Thompsons' apartment prior to the closing. During one visit, Mr. Olsen was present when Ms. Sanders asked Mrs. Thompson if she would be willing to accept a $75,000, one-year mortgage on the property. Mr. Olsen discussed this proposal with Mrs. Thompson and explained to Mrs. Thompson that the mortgage Ms. Sanders was proposing would result in her receiving only $50,000 when the transaction closed and then two payments of $50,000 and $25,000, respectively. Mrs. Thompson told him she would accept the mortgage but did not want Ms. Sanders to pay interest. She refused to change her mind even though Mr. Olsen told her that it would not be in her best interest to take a non-interest-bearing note. Chicago Title Company was the closing agent for the transaction, and the closing took place at their offices on October 20, 1993. Mr. Olsen was present at the closing on behalf of the Thompsons, who were not able to attend. At closing, both Mr. Olsen, on behalf of Mr. and Mrs. Thompson, and Ms. Sanders signed the HUD-1 Settlement Statement, which was computed using a purchase price of $125,000. The cash payable to the Thompsons at closing is shown on the settlement statement as $46,289.48, and the statement reflected a purchase money mortgage for $75,000, as well. Ms. Sanders executed a mortgage and note in the amount of $75,000 dated October 20, 1993. These documents were prepared by Mr. Olsen, and he notarized them on October 20. The terms of the mortgage note called for a payment of $50,000 on April 19, 1994, and a payment of $25,000 on October 19, 1994; the note did not bear interest. Mr. Olsen had one original set of the closing documents bound in a legal-sized folder; the documents included an original signed closing statement, a copy of the deed, and a copy of the mortgage and note. He delivered this folder to Mrs. Thompson and explained the documents, specifically going over the closing statement with her. Mrs. Thompson expressed no dissatisfaction with the transaction or the amount of money she received at closing. Mr. Olsen believes that, during the time he represented her, Mrs. Thompson was fully aware that the contract sales price was $125,000 and that she had taken a mortgage instead of all cash. At some point, the association's Certificate of Approval of Ms. Sanders' purchase and a copy of the HUD-l Settlement Statement were placed in the file maintained by the association for apartment A-2012. Ms. Boet does not recall when the documents came into the office or who provided the copy of the settlement statement. She did not examine the documents at the time she placed them in the association file for apartment A-2012. However, when Mr. Rabin reviewed the file some months after the closing, it contained a copy of an HUD-1 Settlement Statement which had obviously been altered in several places to show a contract sales price of $185,0007 and a copy of a Contract for Purchase and Sale showing a contract price of $185,000.8 The file did not contain a duplicate original executed Contract for Sale and Purchase. The greater weight of the evidence in this case supports Ms. Sanders' contentions that the Contract for Sale and Purchase of apartment A-2012 in the Brickell Place Condominium, executed on August 19, 1993, by Loren L. and Rose Thompson, specified a contract sales price of $125,000, to be paid in cash, and that Mrs. Thompson accepted a one-year note and mortgage on the property in the amount of $75,000 and $50,000 in cash in lieu of $125,000 in cash. Furthermore, the uncontradicted evidence establishes that Ms. Sanders delivered a duplicate original executed contract to Ms. Boet as part of her application to the condominium association for approval of her purchase of the apartment. The uncontradicted evidence also establishes that, some months after the October 20, 1993, closing on the apartment, Mr. Rabin reviewed the association's file and found that it contained a copy of a Contract for Sale and Purchase which specified a contract sales price of $185,000 in cash and an HUD-1 Settlement Statement obviously altered to show a contract sales price of $185,000. There is, however, no compelling evidence establishing when the documents were altered or establishing that Ms. Sanders is the person who made the alterations. Therefore, the Department has failed to carry its burden of proving by clear and convincing evidence that Ms. Sanders violated section 475.25(1)(b), Florida Statutes, either with respect to Mr. and Mrs. Thompson or to the Brickell Place Condominium Association.9
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 dismissing the Administrative Complaint filed against Holly Sanders. DONE AND ENTERED this 9th day of July, 1996, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 9th day of July, 1996.
The Issue Whether Respondent, Brenda W. Smith, violated sections 475.25(1)(b) and 475.25(1)(d)1., Florida Statutes (2013),1/ as alleged in the Administrative Complaint and, if so, what is the appropriate penalty.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute real estate licensees, pursuant to section 20.165 and chapters 120, 455, and 475, Florida Statutes. Respondent is licensed by Petitioner as a real estate broker in the state of Florida, license BK 534400. Respondent’s address of record with Petitioner is Post Office Box 15453, Panama City, Florida 32406. Respondent’s brokerage, Spirits Realty, Inc., is a registered for-profit corporation in the state of Florida with its principal place of business listed as 3812 Dolphin Drive, Panama City Beach, Florida 32408, and a mailing address listed as Post Office Box 15453, Panama City, Florida 32406. On May 31, 2012, Respondent, on behalf of her brokerage, Spirits Realty, Inc., entered into a property management agreement (Property Management Agreement) with Ronald W. Roberts to manage the rental of Mr. Roberts’ property located at 3803 Long John Drive, Panama City Beach, Florida 32408.3/ The term of the Property Management Agreement was for one year, beginning May 31, 2012, and provided: THIS PROPERTY MANAGEMENT AGREEMENT is made on the 31st day of May 2012 and is effective 31 May 2012 by and between Ronald W. Roberts whose address is 3555 Walden Land, Acworth, Ga 30102, hereinafter referred to as “Owner” and SPIRITS REALTY INC., BRENDA SMITH, LICENSED REAL ESTATE BROKER, Post Office Box 15453, Panama City, Florida 32406, hereinafter referred to as “Agent”. WITNESSETH in consideration of the mutual promises and covenants herein contained, the Owner and Agent agree as follows: The Owner represents to the Agent as follows: (a) The Owner is the sole owner and holder of marketable record title to the following described property: 3803 Long John Drive, Panama City Beach, Florida 32408. The Owner hereby appoints the Agent as the sole and exclusive Agent to Lease and manage the premises known as 3803 Long John Drive. This Agreement is for 1 year beginning 31 May 2012. Agent to enter into an agreement for 1 year lease, $1000 per month rental, tenant to pay Jun/July rent in advance (non-refundable); & $1000 security deposit. The owner agrees to the following: Spirits Realty Inc. Commission of 10% of the rents collected in each calendar month (which shall be deducted from rents collected each month). Spirits Realty Inc., Hancock Bank, holds the security deposit (for liquidated damages) and advanced last months [sic] rent in Escrow. If Agent is not available, Jesse Smith, Admin, is authorized signer. 4. [sic] Owner authorizes the broker to secure tenant; and enter into a 1 year lease. Manage tenant relations collecting, give receipts, holding and disbursing rents to owner, serving notices, initiating eviction & damage actions. Agent will receive and forward $2500 check from tenant to Ron Roberts, for sale agreement of furniture and furnishings, on site. The Property Management Agreement was signed by Ronald W. Roberts and notarized in Cherokee County, Georgia, on May 31, 2012. Notably, the Property Management Agreement does not require advanced notice on the part of the Owner to terminate the Property Management Agreement. On May 31, 2012, Respondent and/or Spirits Realty Inc., ostensibly acting on behalf of Mr. Roberts, entered into a four- page residential lease agreement drafted by Respondent (Lease) with Allen Pridgen and Lori Roark (n/k/a Lori Pridgen), as tenants, for the rental of Mr. Roberts’ property located at 3803 Long John Drive, Panama City Beach, Florida 32408 (the Premises). The term of the Lease was for one year, from June 1, 2012, through June 30, 2013. Curiously, instead of naming Mr. Roberts as the lessor, the first sentence on the first page of the Lease names “Spirits Realty Inc., Brenda Smith, Lic. Real Estate Broker, Agent” as “Lessor.” The bottom of the first page of the Lease states “Page 1 of 1.” In addition, page four of the Lease submitted by Respondent as part of her Exhibit R-7 (which page was not included in the copy of the Lease submitted by Petitioner as part of Exhibit P-2) is signed by Respondent and Spirits Realty, Inc., on and below the signature line labeled “Lessor,” respectively. By comparing the signatures of the “Lessees” on the last page of the Lease (page four) with the signatures on the exhibit entitled “Security Deposit/Advance Last Months [sic] Rent Receipt” (Deposit Receipt), it is apparent that Allen and Lori Pridgen both signed page four of the Lease on May 31, 2012, as Lessees. As documented by the Deposit Receipt, on May 31, 2012, Respondent collected from Allen and Lori Pridgen a $1,000 cash security deposit, plus $1,000 as the last month’s rental payment under the Lease. The Deposit Receipt, signed by both of the Pridgens, as well as Respondent, provides that the monies collected would be held in a “non-interest bearing account Spirits Realty, Inc. Escrow” with Hancock Bank in Panama City Beach, Florida. Mr. Roberts signed a typed statement on May 31, 2012, printed on paper with a fax number, date, and time in the top margin, stating: “The four page Residential Lease on Long John Drive, Panama City Beach, Florida, is hereby agreed upon and approved by the property owner Ronald W. Roberts.” The next year, Respondent prepared a document entitled “Lease Renewal Agreement” (Lease Renewal) for renewal of the Lease for another seven months, from June 1, 2013, to January 1, 2014. The initial paragraph of the Lease Renewal listed the parties as: Lessor4/: Allen Pridgen & Lori [Pridgen] Agent: Spirits Realty Inc., Lic. Real Estate Broker The Lease Renewal kept all terms of the Lease in effect and provided that the Security Deposit and last month’s rent would continue to be held in Hancock Bank. The Lease Renewal also stated: That tenants shall pay a monthly rental of $1,000 for each month by the 1st of each month to Spirits Realty, Inc., for the Renewal Term. Tenants agree to give 60 days written notice prior to vacating property, Or give notice of intent to renew lease for up to one year. According to dates next to their signatures, the Lease Renewal was signed by Alan and Lori Pridgen on May 30, 2013; by Brenda Smith for “Spirits Realty Inc and Brenda Smith, Lic Real Estate Broker” on May 31, 2013; and by Dorothy and Ronald Roberts as “Property Owner” on June 4, 2013. In late 2013, the Roberts decided to terminate the Property Management Agreement and manage the rental of the Premises themselves. The decision to terminate the agreement was made a short time after the tenants had a problem with a water leak and a faulty water heater. Because the tenants considered the problem to be an emergency, they dealt directly with the Roberts, who, as owners, authorized the tenants to pay for the required repairs directly and take the payment off the rent. On December 1, 2013, Mr. Roberts spoke to Respondent on the telephone and advised her that the Roberts no longer wanted to use Respondent’s brokerage, Sprits Realty, Inc., for property management services and that they were going to terminate the Property Management Agreement. Ms. Roberts was present with her husband during the telephone conversation and overheard the discussions. During the conversation, Respondent told Mr. Roberts that they needed to give her at least a 60-day notice of termination, and Mr. Roberts advised Respondent that their termination of the Property Management Agreement would be effective February 1, 2014. The next day, December 2, 2013, the Roberts sent a letter by certified mail to Respondent, at her address, and to Spirits Realty, Inc., at its address. The letter was signed by both Mr. and Ms. Roberts, witnessed and notarized, and stated: Dear Mrs. Smith, Per our conversation on December 1, 2013, please accept this letter as a 60 day formal notification that we wish to terminate the contract we currently have with Spirit Realty for Property Management Services. As of 2/1/2014, we will no longer require your services in handling the property management for 3803 Long John Drive, Panama City, Florida, 32408. Please forward the security deposit that you collected from the tenant, Alan Pridgen in 2012 and are currently holding in an escrow account. You can mail it to Ronald & Dorothy Roberts at 3555 Walden Lane, Acworth, Georgia 30102. We appreciate your time and services since Mr. Pridgen began occupying the property. Although multiple attempts were made to deliver the letters, they were returned unaccepted. The Roberts made additional attempts to contact Respondent by telephone, but were unable to do so. By another letter sent by certified mail to Respondent dated January 16, 2014, Mr. and Ms. Roberts again requested in writing that Respondent forward to them the $2,000 identified in the Deposit Receipt. The letter reiterated the fact that in a telephone conversation on December 1, 2013, Respondent was advised that the Roberts were terminating the Property Management Agreement. The letter was returned unaccepted. Although the Roberts letters to Respondent dated December 1, 2013, and January 16, 2014, were returned unaccepted, Respondent’s own exhibit, a copy of a certified letter that Respondent allegedly sent to the tenants on December 11, 2013, acknowledges that Mr. Roberts called on December 1, 2013, regarding both the Lease and the Property Management Agreement. The first paragraph on the third page of Respondent’s December 11, 2013, letter to the tenants states: 1 Dec 2013 Ron Roberts called SRI [Spirits Realty, Inc.] agent saying Alan [Pridgen] paid over $900 in improvement costs having to do with the air conditioner and hot water heater - & Alan would not be paying rent due 1 Jan 2014 – SRI would not receive a management fee – triggering liquidated damages clause. Breach of lease. Lease – Agreement/relationship of landlord & tenant (real property) or lessor and lessee – specifes [sic] 10% rent compensation. Further, during her cross-examination of Ms. Roberts at the final hearing, Respondent acknowledged that she had spoken on the telephone with Mr. Roberts on December 2, 2013, and that during the conversation the subject of breaking a contract with a real estate person was discussed. While it is found that the telephone conversation occurred on December 1, 2013, as opposed to December 2, 2013, it is evident that the conversation indeed occurred. Based on the evidence, it is found that on December 1, 2013, the Roberts effectively communicated their desire to terminate the Property Management Agreement, effective February 1, 2014. Further, although the certified letters were refused, it is found that the Roberts timely asked Respondent for return of the $2,000 reflected in the Deposit Receipt. In addition to the letters that the Roberts sent to Respondent, after speaking to the Roberts, Ms. Pridgen prepared a letter, at the Roberts’ request, for her husband to send to Respondent, dated December 1, 2013, which stated: Brenda, This letter is to inform you that I no longer wish to continue my contract with you and the Roberts. I have been renting this property since June of 2012, the original contract was for one year. I agreed to rent the property for an additional 6 months which is now up. I no longer wish to continue this contract with Spirits Realty Inc. Thank you Allen D. Pridgen The letter was sent to Respondent by certified mail on December 4, 2013, but Respondent never picked it up. Shortly after her conversation with Mr. Roberts on December 1, 2013, Respondent called the police and tried to have the Pridgens evicted from the Premises. The Roberts explained over the phone to the police officer that they, not Respondent, were the owners of the Premises. The Pridgens were not evicted. Ms. Pridgen’s credible testimony explained that they did not intend to vacate the Premises, but rather planned to continue to rent it directly from the Roberts. As of the date of the final hearing, the Pridgens were still leasing the Premises from Ms. Roberts. To date, Respondent has not returned to Ms. Roberts, as owner with responsibilities over the Lease, either the $1,000 Security Deposit or the $1,000 Advanced Rent she collected from the tenants. Instead, Respondent has retained the entire $2,000 and characterizes the funds as “liquidated damages” for the Roberts’ wrongful termination of the Property Management Agreement. The Property Management Agreement has no specific requirement for the manner in which it is to be terminated. Nevertheless, Respondent transferred the $2,000 reflected in the Deposit Receipt into Spirits Realty, Inc.’s, operating account at Hancock Bank. Respondent argues that she is entitled to retain the $2,000 because Ms. Roberts did not make a timely claim upon the escrow deposit following receipt of Respondent’s expressed intent to keep the escrow monies as “liquidated damages.” Respondent bases her argument on the Roberts’ alleged breach of the Property Management Agreement. As there was no breach and the Roberts’ request for return of the escrow funds was timely made, Respondent’s belief that she is entitled to liquidated damages has no merit. Respondent also suggests that she is entitled to retain the $2,000 reflected in the Deposit Receipt because the tenants failed to give 60 days’ notice of their intent to terminate the Lease. Respondent’s suggestion is premised upon the fact that she and her brokerage are erroneously named as the “Lessor” in the Lease that Respondent drafted. Respondent’s argument evinces that she either has a misunderstanding of her role as agent for the Roberts, or intended to take advantage of her position in a manner inconsistent with her obligations under the Property Management Agreement. Although erroneously listed as the “Lessor” under the Lease, neither Respondent nor her brokerage was a proper party to the Lease. Rather, in accordance with the Property Management Agreement, Respondent and her brokerage were only authorized as agents for Mr. Roberts in dealing with the Premises. Under the circumstances, even if the tenants had breached the Lease (which they did not), Mr. Roberts and his successor in interest, Ms. Roberts, not Respondent and her brokerage, would be entitled to make a claim against the tenants as the owners and actual lessors under the Lease. Incredibly, at the final hearing, Respondent submitted into evidence a copy of a document entitled “Lease Addendum” dated May 31, 2012, which was purportedly signed by the tenants, Alan Pridgen and Lori Pridgen. The purported “Lease Addendum” provides: Lease Addendum 31 May 2012 FS 83.575, 83.595 breach, liquidated damages, and termination FS 83.595(4) Tenant statue [sic] contains two liquidated damages provisions allowing the landlord (Lessor) an opportunity to impose liquidated damages on the tenant for early termination or for failure to give notice of intent not to renew lease. Lessor, Spirits Realty Inc. will receive the $2,000 advance fees, “early termination fee”, out of escrow, if a breach of the lease occurs. X I agree as provided in the lease agreement, $2,000 security (an amount that does not exceed 2 months rent) as liquidated damages or an early termination fee if I elect to terminate the lease agreement and Lessor waives the right to seek additional rent beyond the month in which landlord takes possession. FS 83.575 Lessee is required to give 60 days notice of intent not to renew the lease or Lessor, Spirits Realty Inc will receive the $2,000 advance fees security deposits as “liquidated damages”. Spirits Realty Inc is entitled to 5% real estate fee at close. In addition, Respondent submitted into evidence a second document entitled “Lease Addendum” purportedly signed by the now-deceased Mr. Roberts. That second “Lease Addendum” provides: Lease Addendum 31 May 2012 I agree with the Lease Addendum. Spirits Realty Inc will receive the $2,000 security deposits advanced fees out of escrow if there is a breach in the lease. Spirits Realty Inc will receive 5% real estate fee when the property closes. Lessor is acting as a Transaction Broker to lease/sale property. Ms. Roberts and Lori Pridgen credibly testified during the hearing that neither they nor Mr. Roberts, prior to his death, signed a separate Lease Addendum. Ms. Pridgen testified that she would not have signed any type of document which essentially gave up any and all rights to the escrow monies. Further, Ms. Roberts explained that her late husband, Mr. Roberts, who had an understanding of real estate matters, would not have signed such a document. Moreover, the documents presented as lease addenda are suspect. The type font is remarkably different from other documents obtained on May 31, 2012, in connection with the Lease and Property Management Agreement. Further, the paper signed by Mr. Roberts on May 31, 2012, in which he agreed to the Lease, has a fax number, date, and time at the top, but the purported lease addendum does not. Finally, the signatures on the lease addenda appear to have been copied from other signatures and taped into place. While reviewing the purported lease addendum during her cross-examination by Respondent at the final hearing, Ms. Pridgen testified: Okay. First of all, this is not the –- this has never been seen in our paperwork. The whole time that we’ve been doing paperwork with you for all these years, this was never ever seen till Brande sent it up here in the paperwork she had. And besides that, the print is not the same as any of your paperwork. And also, you can tell by the signature that they have been copied and paste onto the amendment. If the – somebody will just look at them, you didn’t clean up your work under your tape before you put it right there. So you - - you needed to clean your work up when you tape something like that because we’ve done it before. You have to clean up your work, or people can tell it when you look at it. Other than evincing Respondent’s nefarious intent to justify her retention of the $2,000, the purported lease addenda are given no evidentiary value. The evidence does not justify Respondent’s retention of the $2,000. The evidence adduced at the final hearing otherwise clearly and convincingly showed that Respondent wrongfully retained the $2,000 identified in the Deposit Receipt.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation, Florida Real Estate Commission, finding that Respondent violated sections 475.25(1)(b) and 475.25(1)(d)1. as charged in the Administrative Complaint, imposing an administrative fine in the amount of $3,500, assessing reasonable costs pursuant to section 455.227(3)(a), and revoking Respondent’s license to practice real estate. DONE AND ENTERED this 29th day of July, 2016, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III 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 29th day of July, 2016.
Findings Of Fact Petitioner is the state licensing regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated pursuant thereto. During times material, Respondent was a licensed real estate salesman in Florida, having been issued license number 0319604. The last license issued Respondent was as a salesman, c/o Referral Realty Center, Inc. (herein Referral) at 8974 Seminole Boulevard, Seminole, Florida. On December 1, 1988, Respondent entered into a management agreement with Madeira Beach Yacht Club Condominium Association, Inc. (herein Madeira) to serve as property manager. Respondent assumed the property manager position with Madeira in June of 1987, which was formalized by a written agreement in December 1988. While acting as property manager for Madeira, Respondent handled the rental transactions of individual units for owners. In return for her services, Respondent was compensated based on a commission of 10% to 20% of the monthly rental. On at least one occasion, Respondent rented an individual unit for owners for a term greater than one year. Respondent was aware that she was renting the one unit for a term in excess of one year. Respondent signed leases for units belonging to individual owners as the rental agent or representative. Respondent used the commissions that she received to defray operating expenses for her rental business such as cleaning fees for the units and for personal compensation. Respondent maintained a bank account at the First Federal of Largo Savings and Loan Association entitled "Dorothy K. Livingston Rental Account" for her rental business. Deposits to that account were rental monies received from tenants from which disbursements were made to unit owners and the remaining commissions went to Respondent as compensation. The rental account maintained by Respondent was neither an account with her employing real estate broker, nor was it an escrow account. Respondent placed security deposits that she received from tenants in the referenced rental account that she maintained. Respondent did not inform her employing broker of the receipt of security deposits nor did she discuss with her employing broker any of her activities involving rental of units for owners at Madeira. However, there is credible testimony evidencing that her broker was knowledgeable of Respondent's activities relative to her rental of units for owners. During May 1989, Respondent placed her real estate license with Referral Realty Center (Referral) as her employing broker. She did so in order to receive payment for referring prospects to Referral. On or about May 22, 1989, Respondent entered into an independent contractor agreement with Referral. That agreement provided in pertinent part that: Independent contractor agrees that Independent contractor will not list any real estate for sale, exchange, lease or rental... . Independent contractor agrees to refer all prospective clients, customers, buyers and sellers of which Independent contractor becomes aware to the Center... . Independent contractor agrees that so long as this Agreement is in force and effect the Independent contractor will not refer any prospective seller or buyer to another real estate broker... . 9. Independent contractor agrees to act, and to represent that he or she is acting solely as a referral associate of the Center... . While employed by Referral, Respondent also received commissions from individual unit owners at Madeira. During the time when Respondent had her license listed with Referral, she also received commissions from Referral for prospects she generated while renting units for owners and acting as property manager at Madeira. Respondent received a copy of a letter from attorney R. Michael Kennedy, addressed to J.L. Cleghorn of Building Managers International, Inc., dated September 5, 1989. In that letter, attorney Kennedy expressed his opinion that condominium or cooperative managers are exempted from the licensing provisions of Chapter 475, Florida Statutes, and that receipt of a percentage of rental proceeds would not be precluded even if the manager was salaried. The Kennedy letter erroneously states support for attorney Kennedy's opinion by Alexander M. Knight, Chief of the Bureau of Condominiums, and Knight so advised attorney Kennedy of that erroneous support by a subsequent letter to him. It is unclear to what extent Respondent apprised attorney Kennedy as to the specifics of her activities and to what extent she relied on his opinion prior to engaging in her property manager's rental and referral activities. (Petitioner's Exhibit 7.) Respondent did not seek advice from Petitioner as to whether her activities fell within the guidelines of Chapter 475, Florida Statutes. Respondent is familiar with the statutory definitions of a broker and salesman and what activities constitute brokerage and sales activities. During times material, Respondent's employing broker, David Hurd, was a licensed real estate broker in Florida, and the broker of record for Referral for procuring prospects and making referrals of real estate activities. Employment under an independent contractor agreement is considered employment under Chapter 475, Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a Final Order imposing an administrative fine against Respondent in the amount of $1,500.00, issue a written reprimand to her, place her license on probation for a period of one (1) year with the further condition that she complete 60 hours of continuing education. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1991. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jerry Gottlieb, Esquire GOTTLIEB & GOTTLIEB, P.A. 2753 State Road 580, Suite 204 Clearwater, Florida 34621 Darlene F. Keller, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact In June, 1975 Randall J. Conley, attempting to set his son and daughter-in-law up in business, arranged for them, with his help, to purchase Roger Sparks' business known as Sparky's Pizza. By Exhibit 6 dated June 17, 1975 the owner and lessor of the premises executed, with Randall M. Conley and his wife Sandra, a Consent to Assignment whereby the lease between the lessor and Mr. Spaghetti and Roger Sparks was assigned to the younger Conley and his wife and the previous lessees were released from further liability under the five year lease they had executed on April 30, 1974. (Exhibit 10) By Collateral Assignment Note dated 6-2-75 Randall J. Conley, Randall M. Conley and Sandra Conley obligated themselves to pay the Florida Center Bank $9750 over a five-year period and pledged the equipment and fixtures in the pizza business as security therefor. In October, 1975 Sandra, who had been operating the business, left for another job preparatory to separating from her husband. The business closed on November 1, 1975 and Defendant learned that the lessees were delinquent in the rent and payments on the chattel mortgage. Thereafter he attempted to sell the business. In November, 1975 Charles Hicks, the owner of a small fast-food chain, while looking for a site for a franchisee, saw the empty Sparky's Pizza and ascertained that information on occupying the property could be obtained from Defendant. He called Defendant's office and was told the rent was $260 per month. Arrangements were made for Defendant to show him the property the same afternoon. On November 25, 1975 Defendant showed Hicks and his putative franchisee, Ronald Beasley, the property. After being assured that the rental included the equipment and fixtures they agreed to accept an assignment of the lease if the lessor agreed and to bind the transaction Hicks gave Defendant a check for $200 made payable, at the request of Defendant, to Randall J. Conley. No written agreement was executed by the parties at this time. The check stated on its face that it was a deposit on lease of building here involved. The following day Defendant called Hicks and told him that the lessor had agreed with the assignment and that he should bring a check for $7,000 to pay for the equipment, plus a check for the rent. Hicks objected to the purchase of the equipment and demanded return of his $200 deposit. Defendant refused to return the money and Hicks immediately tried to stop payment on the check. When he did so he learned that his check had been cashed by Defendant as soon as the bank opened that morning, November 26. After Hicks was unsuccessful in getting his deposit returned he reported the incident to the FREC and the complaint here under consideration was filed. Defendant contends that he was operating as the owner of the lease and not in his capacity as a broker; that the consent to assignment of the lease did not result in an assignment; that by executing the collateral installment note he was part owner of the business; that when his daughter-in-law left and the business folded he acquired the leasehold by abandonment; and that he was entitled to retain Hicks' deposit of $200 as liquidated damages. One witness called by Defendant testified that the bank's policy on chattel mortgage loans was that they would only make such loans to the owners of the business. However, he acknowledged that he did not handle the loan here involved and never saw any documents showing Randall J. Conley having an interest in the leased premises, the equipment and fixtures for which was the subject of the loan represented by Exhibit 9. Defendant had advertised the sale of the lease in the newspaper and therein indicated the assignee of the lease would be required to assume payments on the equipment. Neither Hicks nor Beasley ever saw any such advertisement.
Findings Of Fact Respondent Shirley Holland was registered with Petitioner as a real estate salesman in January, 1976, associated with Vern Duncklee Real Estate and Insurance, Inc., Naples, Florida. He is presently registered as a real estate broker. (Stipulation) On January 5, 1976, W. H. Ragan gave the Duncklee firm a listing to sell real property consisting of approximately one and one-quarter acres located in Collier County, Florida, for a selling price of $7,500. Respondent was the listing salesman. (Testimony of Respondent, Ragan, Duncklee, Petitioner's Exhibit 6). Respondent also was a builder who operated as Holland Investment Company. It was his practice to purchase various properties, remodel existing structures on the same, and thereafter sell them at a profit. There was a two- room shed located on the Ragan property that had no inside finishing work, electricity, or septic tank. Respondent decided to take an option on the property in order to remodel it by adding a room and to place it in a habitable condition. He broached the subject to Ragan on January 6, 1976, and Ragan told him on January 7, that he was agreeable to such a contract. On January 8, Respondent and Ragan and his wife entered into a Sales Contract and Option to Buy for $7,500. The contract provided that closing would take place within twelve months and that the seller would give possession of the property to the purchaser on January 8, 1976. This was pursuant to an accompanying rental agreement dated January 8, 1976, between the parties for a period of twelve months which provided that Respondent could exercise his option at any time within the stated twelve-month period whereby all rents paid would be applied toward the down payment on the property of $1,900 which was to be made at closing of the sale. The rental agreement further provided that if Respondent did not exercise his option within the required time, any improvements made by him on the property during that period would be considered liquidated damages of the owner. Pursuant to these agreements, Respondent made a payment of $100 at the time they were executed, which represented an initial deposit on the contracts and as rent for first month of the term. The Option Agreement also gave Respondent authority to remodel the building on the property and it further reflected that Respondent was a registered real estate salesman and would be selling the property for profit. (Testimony of Respondent, Duncklee, Petitioner's Exhibits 5, 7) On January 5, 1976, Respondent showed Harold and Ruby Stacy several houses in the area that were for sale. On January 9, Respondent went by the Stacy residence to see if they were interested in any of the houses he had shown them. They were not interested in those houses and Respondent told them of property that he had recently acquired which was the Ragan property. He showed it to Mr. Stacy that night and the next day Mrs. Stacy went with him to look at the premises. During the course of their conversations, Respondent offered to rent the property to them for $100 for the period January 10 to February 1, 1976. It was his intention to rent it to them for $125 per month commencing in February on the condition that they clean and fix up the property. They also discussed the possibility of purchase at a later date. Respondent told them that he would sell to them for $13,000 if Harold Stacy would do the remodeling work on the shed with Respondent supplying the materials. Respondent quoted a possible sales price of $14,500 if he was obliged to provide both labor and materials for renovating the shed and providing for utility services. Respondent and the Stacys entered into a rental agreement on that day for the initial period of some three weeks and Ruby Stacy gave him a check dated January 10 for $100 with a notation thereon that it was a deposit on land. Respondent explained to Mrs. Stacy that he was merely renting the property at that time and added the word "rent" at the bottom of the check. (Testimony of Respondent, Petitioner's Exhibit 1, 2) Thereafter, the Stacys proceeded to clean the premises and commence installing a ceiling in the building located on the property. They also installed a septic tank. At some undisclosed date, Ragan came to the property to obtain some of his belongings and found the Stacys there. He learned that they supposedly had purchased the property from Respondent, Ragan was of the opinion that Respondent had purported to sell the property before he had obtained the option thereon and that he had therefore defrauded the Stacys. Ragan thereupon filed a complaint against Respondent with the local Board of Realtors in latter January, 1976. About the same time, Respondent had been in the process of obtaining local permits to install the septic tank and do the other work. He discovered that the Stacys had installed a septic tank without his authorization and without obtaining a permit. He thereupon, by letter of January 21, 1976, informed the Stacys that they had done work on the property without a building permit or approval of the County Health Department and therefore was refunding the rental payment of $100. He enclosed his check in that amount, dated January 21, 1976. Although Respondent later attempted to exercise his option to purchase the property, Ragan refused to fulfill the agreement and later sold the property to the Stacys himself for $7,500. (Testimony of Respondent, R. Stacy, Ragan, Petitioner's Exhibits 3,4) Mrs. Stacy testified at the hearing that she was under the impression that she and her husband had purchased the property in question on January 10, 1976, and that the $100 payment had been a deposit for such purchase. She was under the further impression that they were to make a $2,500 down payment in February to consummate the deal. She further testified that they made the improvements on the land because of their understanding that they were going to purchase it. Mrs. Stacy had never been involved in a prior purchase of real property and is unfamiliar with contract documents and terminology. It is found that Mrs. Stacy honestly believed that she and her husband had a valid agreement to purchase the property. Her testimony that she and her husband entered into the rental arrangement in January to enable them to work on the property until they could make the down payment in February is deemed credible. (Testimony of R. Stacy) Ragan and Respondent had been involved in a prior real estate transaction and Respondent testified that Ragan had not been satisfied with that transaction, but Ragan testified to the contrary. However, Ragan talked to Respondent's broker in January, 1976, about the Stacy situation, at which time Ragan stated that he had a chance to get even with Respondent for the prior transaction and that he was going to do so. (Testimony of Respondent, Ragan, Duncklee, D. Holland)
Recommendation That the Administrative complaint be dismissed. DONE and ENTERED this 8th day of March, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph A. Doherty, Esquire Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802 Ed R. Miller, Esquire Suite 212 - 1400 Gulf Shore Boulevard Naples, Florida 33940
The Issue The issue in this case is whether the Florida Real Estate Commission should discipline the Respondent, Mounir Albert El Beyrouty, on charges that he failed to deliver rental proceeds, was dishonest in his dealings regarding the rental property, failed to escrow rental deposits and proceeds, and failed to properly reconcile his escrow account.
Findings Of Fact The Respondent, Mounir Albert El Beyrouty, is licensed as a real estate broker in Florida, having been issued license no. BK 596936. He is the qualifying broker for Intermab, Inc., d/b/a Byblos Beach Realty. Acting through the real estate brokerage he qualified, Intermab, Inc., the Respondent orally agreed with Virginia Covington to manage apartment Unit 1-E, Redington Tower 3, located at 17940 Gulf Boulevard in Redington Shores, Florida. Initially, Covington, who is a federal district judge, was the personal representative and sole beneficiary of her mother's estate, which owned the unit; after probate, Judge Covington became the owner of the unit. The Respondent and Judge Covington agreed orally that the Respondent would try to lease the apartment on an annual basis at a lease rate of $850 per month, less a 15 percent commission to the Respondent. Although the Respondent was unable to secure such a lease, he intentionally misled Judge Covington to think there was such a lease and, in January 2008, began paying her $722.50 per month by check drawn on his brokerage operating account. He did this because he wanted her to think highly of his abilities as a real estate broker in the hopes that she would retain him to list the property when she decided to sell. Not long after he began sending monthly checks, the Respondent told Judge Covington that a leak in the kitchen sink should be repaired and a stained mattress should be replaced. He got her permission, took care of both items, and was reimbursed. However, he perceived that Judge Covington did not want to put additional money into the apartment unnecessarily and decided to avoid these kinds of conversations and dealings with her. Instead, he began to expend his own funds to maintain and upgrade the property as he saw fit without telling her. The Respondent secured a paying tenant for the apartment for six weeks during February and March 2008. He collected a $500 security deposit and $5,250 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. In April 2008, the Respondent allowed friends to stay in Judge Covington's apartment free of charge and without paying a security deposit. He did not tell Judge Covington, rationalizing that he was paying her the $722.50 per month she thought was her share of the annual lease payments. The Respondent secured a paying tenant for the apartment for January, February, and March 2009. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. The Respondent secured a paying tenant for the apartment for January, February and March 2010. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. When the seasonal renter left, the Respondent continued to pay Judge Covington $722.50 per month. In July 2010, the Respondent was able to lease the apartment for a year at a monthly rent of $1,300. He also collected a $1,000 security deposit. He deposited this money in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $722.50 per month and continued to lead her to believe there was an annual lease for $850 a month. In November 2010, Judge Covington told the Respondent to tell the tenant she wanted to increase the annual lease rate to $935 a month. The Respondent continued to lead her to believe there was an annual lease for $850 a month and told her that he would advise the supposed tenant of the rent increase. Instead, he kept collecting $1,300 a month from the tenant and began paying Judge Covington $794.75 a month (the $935, less a 15 percent commission). He did not tell her there actually was an annual lease for $1,300 a month. The $1,300 annual lease was not renewed in July 2011. The Respondent continued to pay Judge Covington $794.75 a month and to lead her to believe there was an annual lease for $935 a month. In about June 2011, Judge Covington decided to sell her apartment. As the Respondent hoped and planned, she listed it with his brokerage. Judge Covington asked the Respondent to notify the supposed annual tenant, who she believed had been living in the apartment since December 2007, to make sure the tenant would be agreeable to a month-to-month lease during their efforts to sell. The Respondent continued to lead Judge Covington to believe there was such an annual tenant and assured her that he would be able to convince the tenant to cooperate with her plan to sell. From August 29 through October 5, 2011, the Respondent allowed friends to stay in Judge Covington's apartment free of charge and without paying a security deposit. He did not tell Judge Covington, rationalizing that he was paying her the $794.75 per month she thought was her share of the annual lease payments. In November and December 2011, the Respondent rented Judge Covington's apartment to the sister of the court clerk for $850 a month without requiring a security deposit. He did not tell Judge Covington about this rental. The Respondent secured paying tenants for the apartment for February, March and April 2012. He collected a $500 security deposit and $9,000 in rent, all of which he deposited in the brokerage operating account. He did not tell Judge Covington about the seasonal renter. Instead, he kept paying her $794.75 a month and led her to believe there was an annual lease for $935 a month. Despite several price reductions, the Respondent was unable to sell the apartment, and Judge Covington decided to switch selling brokers. In February 2012, she signed a listing agreement with another real estate broker. Later in February 2012, a real estate salesperson showed Judge Covington's apartment to a prospective purchaser. Upon questioning, an older woman told the salesperson that they were paying $3,000 a month in rent. The Respondent told the salesperson to disregard the information because the woman was not thinking straight, or words to that effect, because her husband had been ill. He also told her that the woman's son was actually paying the rent. The salesperson related this information to Judge Covington and also told her that she noticed that the residents were not the same people she happened to see in the apartment on one occasion in February 2012. Upon receiving this information, Judge Covington became suspicious that the Respondent had been dishonest and misleading her. She contacted the State Attorney's Office and the Division regarding the process for filing a complaint against the Respondent. She also arranged for a meeting with the Respondent. When she met with the Respondent, she brought a forensic accountant to review the Respondent's records. The Respondent told them he was sorry that Judge Covington was upset with him, but that he did not owe her any money--to the contrary, that she owed him money. However, he told them he was being audited by the Division and was unable to provide supporting documentation. At the final hearing, the Respondent provided a ledger to support his position that all the rent he collected belonged to him alone because Judge Covington owed him money throughout his dealings with her due to his payments to her, regardless whether her apartment was rented, and the money he spent to maintain and improve the apartment. (This was an after-the-fact justification for his failure to deposit any security deposits or rental payments into his escrow account when, in fact, he did not do so because he did not know it was required.) There is reason to believe that the ledger is not entirely accurate. For example, the Respondent omitted rent collected from at least one occupant of the apartment. It also does not account for the times the Respondent allowed friends and relatives to stay there free of charge, essentially acting as if he owned the apartment. Although the Respondent's testimony regarding the money he paid to maintain and improve the apartment is accepted, his failure to timely apprise Judge Covington regarding those expenditures makes it difficult to be certain about it. Finally, even accepting the ledger at face value, it shows that there were times when the Respondent owed Judge Covington, and not vice-versa. The Division attempted to make a case that the Respondent intended to and attempted to steal rental proceeds. It is unlikely that the Respondent actually targeted a federal judge to victimize in that way. It is more likely that the Respondent was attempting to impress Judge Covington with his skill and expertise as a real estate broker and, ultimately, to be rewarded with the listing on the property when it was sold. In so doing, the Respondent flagrantly violated several laws and rules regarding his professional responsibilities as a licensed Florida real estate broker. Respondent has been a licensed real estate broker for many years and depends on his license to make a living to support himself and his family. He has no prior disciplinary record. However, it has become known in this case that, over the years, he consistently has failed to use his escrow account for rental deposits and proceeds because he did not know it was required.
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 the Respondent guilty as charged; fining him $2,000; suspending his license for one year; and placing him on probation for a suitable period of time and upon suitable conditions. DONE AND ENTERED this 5th day of August, 2013, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON 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 August, 2013.
The Issue Whether the Florida Fish and Wildlife Conservation Commission’s (“Respondent” or “FWC”) determination that Tallahassee Corporate Center, LLC (“Petitioner” or “TCC”), submitted a nonresponsive reply to FWC’s Invitation to Negotiate (“ITN”) No. 770-0235 is contrary to the Commission’s governing statutes, the agency’s rules or policies, or the solicitation specifications; and, if so, whether it was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The following Findings of Fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the pre-hearing stipulation. ITN No. 770-0235 and Background FWC is a state agency that seeks office space to be occupied by personnel from six of FWC’s divisions. FWC currently leases office space from TCC, which expires in October 2019. On July 19, 2017, FWC issued ITN No. 770-0235, seeking vendors that could provide 53,000 square feet of office space for lease. FWC anticipates occupying the space by November 1, 2019. Between August 15, 2017, and November 2, 2017, FWC issued four addenda to the ITN, which contained amendments, modifications, and explanations to the ITN. There were no bidders that challenged the terms, conditions, or specifications contained in the ITN or its amendments. TCC and NLH were two of the potential lessors that submitted replies in response to the ITN. FWC seeks to lease either a building that already exists or a non-existing building to be constructed in the future. The ITN describes the proposals requested as follows: Competitive proposals may be submitted for consideration under this Invitation to Negotiate (ITN) for the lease of office space in either an existing building or a non- existing (build-to-suit/turnkey) building. NOTE: All buildings must comply with the Americans with Disabilities Act (ADA) as stated in Attachment A, Agency Specifications, Section 6.D., page 32. OPTION 1 - an ‘existing’ building: To be considered an ‘existing’ building, the facility offered must be enclosed with a roof system and exterior walls must be in place at the time of the submittal of the Reply. OPTION 2 - a ‘non-existing’ building: Offeror agrees to construct a building as a ‘build-to-suit’ (turnkey) for lease to FWC. Each applicant that submitted a proposal in response to the ITN was required to meet the specification in Attachment A of the ITN. The ITN provides as follows: FWC is seeking detailed and competitive proposals to provide built-out office facilities and related infrastructure for the occupancy by FWC. As relates to any space that is required to be built-out pursuant to this Invitation to Negotiate in accordance with this Invitation to Negotiate, see Attachment ‘A’ which includes the FWC Specifications detailing the build-out requirements. The specifications in Attachment A provided the basic requirements for the potential leased space such that proposals offering existing or non-existing building may be compared and evaluated together. The ITN included certain provisions to clarify the rights contemplated by the ITN, and included the following disclaimer: This ITN is an invitation to negotiate and is for discussion purposes only. It is not an offer, contract or agreement of any kind. Neither FWC nor the Offeror/Lessor shall have any legal rights or obligations whatsoever between them and neither shall take any action or fail to take any action in reliance upon any part of these discussions until the proposed transaction and a definitive written lease agreement is approved in writing by FWC. This ITN shall not be considered an offer to lease. The terms of any transaction, if consummated, shall not be final nor binding on either party until a Lease Agreement is executed by all parties. This ITN may be modified or withdrawn by FWC at any time. The ITN also included a provision expressly reserving FWC’s “right to negotiate with all responsive and responsible Offerors, serially or concurrently, to determine the best-suited solution.” The term “Offeror” was defined by the ITN to mean “the individual submitting a Reply to this Invitation to Negotiate, such person being the owner of the proposed facility or an individual duly authorized to bind the owner of the facility.” This reservation of rights placed interested lessors on notice that only responsive lessors could be invited to negotiations. While TCC and NLH were two of the potential lessors that submitted replies in response to the ITN, the bidders submitted different proposals. TCC submitted a proposal for an existing building, and NLH submitted a proposal for a non- existing building. During an initial review of all replies, FWC determined TCC’s reply to be nonresponsive based on TCC’s response to ITN section IV.G (Tenant Improvements) and a statement titled “Additional Response” that TCC submitted with its reply. As a result, FWC did not evaluate or score TCC’s reply. After TCC’s reply was declared nonresponsive, there were no further negotiations with TCC regarding the ITN. NLH’s reply passed the initial responsiveness review and was then evaluated and scored by FWC. FWC ultimately issued an intended award of the contract to NLH after conducting negotiations. Tenant-Improvement Cap The ITN prohibited vendors from proposing conditional or contingent lease rates that included a tenant-improvement cap, or allowance. A tenant-improvement cap reflects the maximum amount the landlord is willing to spend to make improvements to leased space. Mr. Hakimi asserted that the tenant-improvement cap would be an incentive to FWC to enter a lease. However, the tenant-improvement cap would also place a limit on improvements. According to ITN section IV.E, any reply offering a lease rate with a tenant-improvement cap would be deemed nonresponsive: FULL SERVICE (GROSS) RENTAL RATE The Offeror shall provide FWC with a Full Service (gross) lease structure. Therefore, the lease rate must include base rent, taxes, all operating expenses (including, but not limited to, janitorial services and supplies, utilities, water, insurance, interior and exterior maintenance, recycling services, garbage disposal, pest control, security system installation and maintenance, and any amortization of required tenant improvements to the proposed space). There shall be no pass through of additional expenses . . . . Offerors must provide their best, firm lease rates. Lease rates that are contingent, involve a basic rate plus “cap” or “range” for such things as tenant improvements will be deemed nonresponsive. The ITN also provided, in section IV.G, that any current lessor must meet all ITN requirements, including those set forth in ITN Attachment A: TENANT IMPROVEMENTS The State requires a “turn-key” build-out by the Landlord. Therefore, Offeror shall assume all cost risks associated with delivery in accordance with the required specifications detailed in this ITN, including Attachment A (see pages 28-45). Additionally, replies for space which is currently under lease with, or occupancy by, the Florida Fish and Wildlife Conservation Commission does not exclude the Offeror from meeting the requirements specified in this ITN document. Offeror agrees to provide “turn-key” build-out/improvements in accordance with the specifications detailed in this ITN. (use an X to mark one of the following): YES or NO TCC responded “NO” to the statement “Offeror agrees to provide ‘turn-key’ build-out/improvements in accordance with the specifications detailed in this ITN.” Additional Response Not only did TCC include a barred tenant-improvement cap, but TCC also attached an addendum to its proposal, which provided the following: The reality is that as the current Landlord, it would be impossible to ask FFWCC to move out of its existing office space in order to meet the requested Agency Specifications in Attachment A. If this condition makes our response to the Invitation to Negotiate (ITN) “non-responsive”, we stand willing to continue further negotiations with FFWCC. There was no provision in the ITN for additional responses outside what was requested in the ITN. More importantly, the addendum indicated TCC could not comply with the ITN, unless certain conditions were met. Mr. Hakimi confirmed the effect of what was written in the addendum when he testified that TCC is unable to meet Attachment A’s specifications because it presently has a tenant in place (i.e., FWC) that prevents it from constructing the building improvements necessary to comply with ITN Attachment A. Proof of Ownership of Property The ITN also provided that to be responsive, each lessor was required to submit certain documentation demonstrating the lessor’s control of the property proposed for the leased space: Replies must completely and accurately respond to all requested information, including the following: (A) Control of Property (Applicable for Replies for Existing and/or Non- Existing Buildings). For a Reply to be responsive, it must be submitted by one of the entities listed below, and the proposal must include supporting documentation proving control of the property proposed. This requirement applies to: The real property (land); The proposed building(s) (or structure(s); The proposed parking area(s). Control of parking includes the area(s) of ingress and egress to both the real property and the building(s). The owner of record of the facility(s) and parking area(s) – Submit a copy of the deed(s) evidencing clear title to the property proposed. The authorized agent, broker or legal representative of the owner(s) – Submit a copy of the Special Power of Attorney authorizing submission of the proposal. The Special Power of Attorney form was attached to the ITN as Attachment K. TCC’s certification was executed by TCC president, Lyda Hakimi. However, TCC did not execute Attachment K or include an executed power of attorney to demonstrate that TCC has control of the property. The evidence offered at hearing of the property’s ownership contained in TCC’s reply was a deed showing DRA CRT Tallahassee Center, LLC to be the property owner. Respondent argued that although TCC owns DRA CRT Tallahassee Center, LLC, the two are different legal entities. Because these were two different legal entities, TCC was required to provide a copy of Attachment K to its response to be deemed responsive. Broker Commission The ITN required lessors to agree to execute a broker- commission agreement, which was attached to the ITN as Attachment J: Offeror understands FWC is utilizing the services of a Tenant Broker representative for this lease space requirement and the successful Offeror shall execute a Commission Agreement, in coordination with FWC’s Tenant Broker representative, within fifteen (15) business days of notification of Award. Offeror agrees and acknowledges that a Tenant Broker Commission Agreement is a requirement and the successful Offeror shall be required to execute a Commission Agreement as described above. (use an X to mark one of the following): YES or NO The ITN included a schedule for the commission rate based on the total aggregate gross base rent that could be paid ranging from 2.50 percent to 3.50 percent. TCC conditioned its reply by agreeing to pay a two-percent broker commission, which is inconsistent with the commission schedule. By offering a lower commission rate, TCC could save money. TCC would then have a competitive advantage over other bidders. TCC’S Bid was Nonresponsive Based upon the foregoing, TCC’s bid submission added a tenant-improvement cap, failed to comply with the broker commission rate, failed to provide supporting documents to demonstrate proof of property ownership, and added additional conditions regarding compliance with the ITN requirements. The information requested and terms of the ITN were required for TCC’s bid to be responsive. TCC did not file a challenge to the specifications or any of the requirements of the ITN. It is now too late for such a challenge. TCC’s inclusion of a tenant-improvement allowance limits the amount that would pay for improvements. The lower broker commission increases the profit advantage for TCC more than for other bidders, which would be an unfair advantage over other bidders. TCC’s failure to comply with the terms of the ITN and failure to provide the required attachment to show proof of ownership were not minor irregularities, which FWC could waive. Therefore, FWC properly determined that TCC’s bid submission was nonresponsive. Standing TCC submitted a bid proposal that did not conform to the requirements of the ITN and it seeks relief that includes setting aside FWC’s rejection of its proposal. Therefore, TCC has standing to bring this protest. If it is determined that TCC was nonresponsive, NLH has standing to the extent the procurement process could be deemed contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Fish and Wildlife Conservation Commission enter a final order dismissing Tallahassee Corporate Center, LLC’s Petition. DONE AND ENTERED this 27th day of March, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN 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 27th day of March, 2018.
