Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that all charges against Respondent be DISMISSED. DONE and ENTERED this 5th day of April, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of April, 1982.
The Issue The two issues raised in this proceeding are: (1) whether the basis and reason Respondent, Vestcor Companies, d/b/a Madalyn Landings (Vestcor), terminated Petitioner, Carlos Gomez's (Petitioner), employment on June 28, 2002, was in retaliation for Petitioner's protected conduct during his normal course of employment; and (2) whether Vestcor committed unlawful housing practice by permitting Vestcor employees without families to reside on its property, Madalyn Landing Apartments, without paying rent, while requiring Vestcor employees with families to pay rent in violation of Title VII of the Civil Rights Act of 1968, as amended, and Chapter 760.23, Florida Statutes (2002).
Findings Of Fact Based upon observation of the demeanor and candor of each witness while testifying, exhibits offered in support of and in opposition to the respective position of the parties received in evidence, stipulations of the parties, evidentiary rulings made pursuant to Section 120.57, Florida Statutes (2002), and the entire record compiled herein, the following relevant, material, and substantial facts are determined: Petitioner filed charges of housing discrimination against Vestcor with the Commission on August 30, 2002. Petitioner alleged that Vestcor discriminated against him based on his familial status and his June 28, 2002, termination was in retaliation for filing the charge of discrimination. Vestcor denied the allegations and contended that Petitioner's termination was for cause. Additionally, Vestcor maintained Petitioner relinquished his claim of retaliation before the final hearing; and under oath during his deposition, asserted he would not pursue a claim for retaliation. Petitioner was permitted to proffer evidence of retaliation because Vestcor terminated his employment. The Commission's Notice was issued on January 7, 2005. The parties agree that Petitioner was hired by Vestcor on June 25, 2001, as a leasing consultant agent for Madalyn Landing Apartments located in Palm Bay, Florida. Petitioner's job responsibilities as a leasing consultant agent included showing the property, leasing the property (apartment units), and assisting with tenant relations by responding to concerns and questions, and preparing and following up on maintenance orders. Petitioner had access to keys to all apartments on site. At the time of his hire, Petitioner was, as was all of Vestcor employees, given a copy of Vestcor's Employee Handbook. This handbook is required reading for each employee for personal information and familiarity with company policies and procedures, to include the company requirement that each employee personally telephone and speak with his/her supervisor when the employee, for whatever reason, could not appear at work as scheduled, which is a basis and cause for termination. The parties agree that Vestcor's handbook, among other things, contains company policies regarding equal employment; prohibition against unlawful conduct and appropriate workplace conduct; procedures for handling employee problems and complaints associated with their employment; and procedures for reporting illness or absences from work, which include personal notification to supervisors, and not messages left on the answering service. Failure to comply with employment reporting polices may result in progressive disciplinary action. The parties agree that employee benefits were also contained in the handbook. One such employee benefit, at issue in this proceeding, is the live-on-site benefit. The live-on- site benefit first requires eligible employees to complete a 90-day orientation period, meet the rental criteria for a tax credit property, and be a full-time employee. The eligible employee must pay all applicable security deposits and utility expenses for the live-on-site unit. Rent-free, live-on-site benefits are available only to employees who occupy the positions of (1) site community managers, (2) maintenance supervisors, and (3) courtesy officers. These individuals received a free two-bedroom, two-bathroom apartment at the apartment complex in which they work as part of their employment compensation package. The rent-free, live-on-site benefit is not available for Vestcor's leasing consultant agent employees, such as Petitioner. On or about July 3, 2001, Petitioner entered into a lease agreement with Vestcor to move into Apartment No. 202-24 located at Madalyn Landing Apartments. The lease agreement ended on January 31, 2002. The lease agreement set forth terms that Petitioner was to receive a $50.00 monthly rental concession, which became effective on September 3, 2001. Although he was eligible for the 25-percent monthly rental concession, to have given Petitioner the full 25 percent of his monthly rental cost would have over-qualified Petitioner based upon Madalyn Landing Apartment's tax credit property status. Petitioner and Vestcor agreed he would receive a $50.00 monthly rental concession, thereby qualifying him as a resident on the property. Petitioner understood and accepted the fact that he did not qualify for rent-free, live-on-site benefits because of his employment status as a leasing consultant agent. Petitioner understood and accepted Vestcor's $50.00 monthly rental concession because of his employment status as a leasing consultant agent. The rental concession meant Petitioner's regular monthly rental would be reduced by $50.00 each month. On September 1, 2001, Henry Oliver was hired by Vestcor as a maintenance technician. Maintenance technicians do not qualify for rent-free, live-on-site benefits. At the time of his hire, Mr. Oliver did not live on site. As with other employees, to become eligible for the standard 25-percent monthly rental concession benefits, Mr. Oliver was required to complete a 90-day orientation period, meet the rental criteria for a tax credit property, be a full-time employee, and pay all applicable security deposits and utility expenses for the unit. On November 13, 2001, Michael Gomez, the brother of Petitioner (Mr. Gomez), commenced his employment with Vestcor as a groundskeeper. Groundskeepers did not meet the qualifications for rent-free, live-on-site benefits. At the time of his hire, Mr. Gomez did not live on site. As with other employees, to become eligible for the standard 25-percent monthly rental concession benefits, Mr. Gomez was required to complete a 90-day orientation period, meet the rental criteria for a tax credit property, be a full-time employee, and pay all applicable security deposits and utility expenses for the unit. On November 21, 2001, 81 days after his hire, Mr. Oliver commenced his lease application process to reside in Apartment No. 203-44 at Madalyn Landing Apartments. Mr. Oliver's leasing consultant agent was Petitioner in this cause. Like other eligible Vestcor employees and as a part of the lease application process, Mr. Oliver completed all required paperwork, which included, but not limited to, completing a credit check, employment verification, and income test to ensure that he was qualified to reside at Madalyn Landing Apartments. Fifteen days later, on November 28, 2001, Mr. Gomez commenced his lease application process to reside in Apartment No. 206-24 at Madalyn Landing Apartments. As part of the leasing process, Mr. Gomez, as other eligible Vestcor employees who intend to reside on Vestcor property, completed all necessary paperwork including, but not limited to, a credit check and employment verification and income test to ensure he was qualified to reside at Madalyn Landing Apartments. Included in the paperwork was a list of rental criteria requiring Mr. Gomez to execute a lease agreement to obligate himself to pay the required rent payment, consent to a credit check, pay an application fee and required security deposit, and agree not to take possession of an apartment until all supporting paperwork was completed and approved. Mr. Gomez's leasing consultant was Petitioner. On December 28, 2001, Petitioner signed a Notice to Vacate Apartment No. 206-24, effective February 1, 2002. The Notice to Vacate was placed in Vestcor's office files. Petitioner's reasons for vacating his apartment stated he "needed a yard, garage, more space, a big family room, and some privacy." Thirty-four days later, February 1, 2002, Mr. Gomez moved into Apartment No. 206-24 at Madalyn Landing Apartments without the approval or knowledge of Vestcor management. On January 9, 2002, a "Corrective Action Notice" was placed in Petitioner's employee file by his supervisor, Genea Closs. The notice cited two violations of Vestcor's policies and procedures. Specifically, his supervisor noted Petitioner did not collect administration fees from two unidentified rental units, and he had taken an unidentified resident's rental check home with him, rather than directly to the office as required by policy. As a direct result of those policy violations, Ms. Closs placed Petitioner on 180 days' probation and instructed him to re-read all Vestcor employees' handbook and manuals. Petitioner acknowledged receiving and understanding the warning. At the time she took the above action against Petitioner, there is no evidence that Ms. Closs had knowledge of Petitioner's past or present efforts to gather statements and other information from Mr. Gomez and/or Mr. Oliver in anticipation and preparation for his subsequent filing of claims of discrimination against Vestcor. Also, on January 9, 2002, Petitioner was notified that his brother, Mr. Gomez, did not qualify to reside at Madalyn Landing Apartments because of insufficient credit. Further, Petitioner was advised that should Mr. Gomez wish to continue with the application process, he would need a co-signer on his lease agreement or pay an additional security deposit. Mr. Gomez produced an unidentified co-signer, who also completed a lease application. On January 30, 2002, the lease application submitted by Mr. Gomez's co-signor was denied. As a result of the denial of Mr. Gomez's co-signor lease application, Vestcor did not approve Mr. Gomez's lease application. When he was made aware that his co-signor's application was denied and of management's request for him to pay an additional security deposit, as was previously agreed, Mr. Gomez refused to pay the additional security deposit. As a direct result of his refusal, his lease application was never approved, and he was not authorized by Vestcor to move into any Madalyn Landing's rental apartment units. At some unspecified time thereafter, Vestcor's management became aware that Mr. Gomez had moved into Apartment No. 206-24, even though he was never approved or authorized to move into an on site apartment. Vestcor's management ordered Mr. Gomez to remove his belongings from Apartment No. 206-24. Subsequent to the removal order, Mr. Gomez moved his belongings from Apartment No. 206-24 into Apartment No. 103-20. Mr. Gomez's move into Apartment No. 103-20, as was his move into Apartment No. 206-04, was without approval and/or authorization from Vestcor's management. Upon learning that his belonging had been placed in Apartment No. 103-20, Mr. Gomez was again instructed by management to remove his belongings. After he failed and refused to move his belongings from Apartment No. 103-20, Vestcor's management entered the apartment and gathered and discarded Mr. Gomez's belongings. As a leasing contract agent, Petitioner had access to keys to all vacant apartments. His brother, Mr. Gomez, who was a groundskeeper, did not have access to keys to any apartment, save the one he occupied. Any apartment occupied by Ms. Gomez after his Notice to Vacate Apartment No. 103-20 was without the knowledge or approval of Vestcor and in violation of Vestcor's policies and procedures. Therefore, any period of apartment occupancy by Mr. Gomez was not discriminatory against Petitioner (rent-free and/or reduced rent), but was a direct violation of Vestcor's policies. On February 10, 2002, Mr. Oliver signed a one-year lease agreement with Vestcor. Mr. Oliver's lease agreement reflected a 25-percent employee rental concession. Throughout Mr. Oliver's occupancy of Apartment No. 203-64 and pursuant to his lease agreement duration, Mr. Oliver's rental history reflected his monthly payment of $413.00. There is no evidence that Mr. Oliver lived on site without paying rent or that Vestcor authorized or permitted Mr. Oliver to live on site without paying rent, as alleged by Petitioner. On June 2, 2002, Ms. Closs completed Petitioner's annual performance appraisal report. Performance ratings range from a one -- below expectations, to a four -- exceeds expectations. Petitioner received ratings in the categories appraised as follows: Leasing skills -- 4; Administrative skills -- 2, with comments of improvement needed in paperwork, computer updating, and policy adherence; Marketing skills -- 4, with comments that Petitioner had a flair for finding the right markets; Community awareness -- 3, with no comment; Professionalism -- 2, with comments of improvement needed in paperwork reporting; Dependability -- 2, with comments of improvement needed in attendance; Interpersonal skills -- 3, with no comments; Judgment/Decision-making -- 3, with no comments; Quality of Work -- 2, with comments that work lacked accuracy; Initiative -- 4, with no comment; Customer service -- 3, with no comments; Team work -- 2, with comments of improvement needed in the area of resident confidence; Company loyalty -- 2, with comments of improvement needed in adherence to company policy and procedures; and Training and development -- 3, with no comments. Petitioner's Overall rating was 2.5, with comments that there was "room for improvement." On June 27, 2002, while on 180 days' probation that began on January 9, 2002, Petitioner failed to report to work and failed to report his absence to his supervisor, Ms. Closs, by a person-to-person telephone call. This conduct constituted a violation of Vestcor's policy requiring all its employees to personally contact their supervisor when late and/or absent from work and prohibited leaving messages on the community answering service machine. On June 28, 2002, Petitioner reported to work. Ms. Closs, his supervisor, informed Petitioner of his termination of employment with Vestcor for failure to report to work (i.e. job abandonment) and for probation violation, as he had been warned on January 9, 2002, what would happen should a policy violation re-occur. It was after his June 28, 2002, termination that Petitioner began his personal investigation and gathering of information (i.e., interviews and statements from other Vestcor employees) in preparation to file this complaint. Considering the findings favorable to Petitioner, he failed to establish a prima facie case of retaliation by Vestcor, when they terminated his employment on June 28, 2002. Considering the findings of record favorable to Petitioner, he failed to establish a prima facie case of housing and/or rental adjustment discrimination by Vestcor, based upon familial status of himself or any other employer. Petitioner failed to prove Vestcor knowingly and/or intentionally permitted, approved, or allowed either Mr. Gomez or Mr. Oliver to live on site without a completed and approved application followed by appropriate rent adjustments according to their employment status and keeping within the tax credit requirement, while requiring Vestcor employees with families (or different employment status) to pay a different monthly rent in violation of Title VII of the Civil Rights Act of 1968. Petitioner failed to prove his termination on June 28, 2002, was in retaliation for his actions and conduct other than his personal violation, while on probation, of Vestcor's policies and procedures.
Recommendation Based on the foregoing, Findings of Fact and Conclusions of Law, it is RECOMMENDED the Florida Commission on Human Rights enter a final order dismissing the Petition for Relief alleging discrimination filed by Petitioner, Carlos Gomez. DONE AND ENTERED this 29th day of August, 2005, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of August, 2005.
Findings Of Fact Petitioner is the state licensing regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30, Florida Statutes and Chapters 120, 455 and 475, Florida Statutes, and rules and regulations promulgated pursuant thereto. During times material, Respondent was a licensed real estate salesman in Florida, having been issued license number 0319604. The last license issued Respondent was as a salesman, c/o Referral Realty Center, Inc. (herein Referral) at 8974 Seminole Boulevard, Seminole, Florida. On December 1, 1988, Respondent entered into a management agreement with Madeira Beach Yacht Club Condominium Association, Inc. (herein Madeira) to serve as property manager. Respondent assumed the property manager position with Madeira in June of 1987, which was formalized by a written agreement in December 1988. While acting as property manager for Madeira, Respondent handled the rental transactions of individual units for owners. In return for her services, Respondent was compensated based on a commission of 10% to 20% of the monthly rental. On at least one occasion, Respondent rented an individual unit for owners for a term greater than one year. Respondent was aware that she was renting the one unit for a term in excess of one year. Respondent signed leases for units belonging to individual owners as the rental agent or representative. Respondent used the commissions that she received to defray operating expenses for her rental business such as cleaning fees for the units and for personal compensation. Respondent maintained a bank account at the First Federal of Largo Savings and Loan Association entitled "Dorothy K. Livingston Rental Account" for her rental business. Deposits to that account were rental monies received from tenants from which disbursements were made to unit owners and the remaining commissions went to Respondent as compensation. The rental account maintained by Respondent was neither an account with her employing real estate broker, nor was it an escrow account. Respondent placed security deposits that she received from tenants in the referenced rental account that she maintained. Respondent did not inform her employing broker of the receipt of security deposits nor did she discuss with her employing broker any of her activities involving rental of units for owners at Madeira. However, there is credible testimony evidencing that her broker was knowledgeable of Respondent's activities relative to her rental of units for owners. During May 1989, Respondent placed her real estate license with Referral Realty Center (Referral) as her employing broker. She did so in order to receive payment for referring prospects to Referral. On or about May 22, 1989, Respondent entered into an independent contractor agreement with Referral. That agreement provided in pertinent part that: Independent contractor agrees that Independent contractor will not list any real estate for sale, exchange, lease or rental... . Independent contractor agrees to refer all prospective clients, customers, buyers and sellers of which Independent contractor becomes aware to the Center... . Independent contractor agrees that so long as this Agreement is in force and effect the Independent contractor will not refer any prospective seller or buyer to another real estate broker... . 9. Independent contractor agrees to act, and to represent that he or she is acting solely as a referral associate of the Center... . While employed by Referral, Respondent also received commissions from individual unit owners at Madeira. During the time when Respondent had her license listed with Referral, she also received commissions from Referral for prospects she generated while renting units for owners and acting as property manager at Madeira. Respondent received a copy of a letter from attorney R. Michael Kennedy, addressed to J.L. Cleghorn of Building Managers International, Inc., dated September 5, 1989. In that letter, attorney Kennedy expressed his opinion that condominium or cooperative managers are exempted from the licensing provisions of Chapter 475, Florida Statutes, and that receipt of a percentage of rental proceeds would not be precluded even if the manager was salaried. The Kennedy letter erroneously states support for attorney Kennedy's opinion by Alexander M. Knight, Chief of the Bureau of Condominiums, and Knight so advised attorney Kennedy of that erroneous support by a subsequent letter to him. It is unclear to what extent Respondent apprised attorney Kennedy as to the specifics of her activities and to what extent she relied on his opinion prior to engaging in her property manager's rental and referral activities. (Petitioner's Exhibit 7.) Respondent did not seek advice from Petitioner as to whether her activities fell within the guidelines of Chapter 475, Florida Statutes. Respondent is familiar with the statutory definitions of a broker and salesman and what activities constitute brokerage and sales activities. During times material, Respondent's employing broker, David Hurd, was a licensed real estate broker in Florida, and the broker of record for Referral for procuring prospects and making referrals of real estate activities. Employment under an independent contractor agreement is considered employment under Chapter 475, Florida Statutes.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that Petitioner enter a Final Order imposing an administrative fine against Respondent in the amount of $1,500.00, issue a written reprimand to her, place her license on probation for a period of one (1) year with the further condition that she complete 60 hours of continuing education. RECOMMENDED this 31st day of May, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of May, 1991. COPIES FURNISHED: Janine B. Myrick, Esquire DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jerry Gottlieb, Esquire GOTTLIEB & GOTTLIEB, P.A. 2753 State Road 580, Suite 204 Clearwater, Florida 34621 Darlene F. Keller, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay, General Counsel Department of Professional Regulation Northwood Centre, Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether Respondents' licenses as real estate brokers should be suspended or revoked, or the licensees otherwise disciplined, for alleged violations of Chapter 475, Florida Statutes, as set forth in the Administrative Complaint, dated September 28, 1981. This proceeding is based on an administrative complaint filed by Petitioner, Board of Real Estate, alleging that Respondents, while engaged in a rental service business which advertised and sold rental property information or lists, for an advance fee to prospective lessees, utilized a contract or receipt agreement which included language defining when a "rental has been obtained" that was contrary to the intent of Rule 21V-10.30, Florida Administrative Code, and that therefore Respondents had violated Subsection 475.453 and 475.25(1)(b), Florida Statutes. It further alleged that Respondents failed to refund 75 percent of an advance fee to specific prospective tenants as required by Subsection 475.25(1)(e), Florida Statutes and therefore constituted a violation of Subsection 475.25(1)(d), Florida Statutes. At the commencement of the hearing, the parties submitted a Proposed Stipulation of facts which was accepted by the Hearing Officer and constitutes the Findings of Fact hereinafter. No witnesses testified at the proceeding nor were any exhibits entered in evidence other than the four exhibits attached to the Stipulation. (Exhibit 1)
Findings Of Fact Respondent Jack Braunstein is a licensed real estate broker having been issued license number 0146924. The last known address of this Respondent is 916 North Federal Highway, Fort Lauderdale, Florida 33304. Respondent Rent Aid, Inc., is a licensed corporate real estate broker having been issued license number 0133234. The last known main office address of Rent Aid, Inc., is 916 North Federal Highway, Fort Lauderdale, Florida 33304. At all times material herein Respondent Braunstein was the sole active broker of and for Respondent Rent Aid, Inc., doing business at the corporate main office located in Fort Lauderdale, Florida. As said active broker, Braunstein was responsible and liable for the acts and/or omissions of the associates of Rent Aid, Inc. performed in the scope of their employment; and was responsible and liable for the acts and/or omissions of Rent Aid, Inc. At all times material herein, Respondent Rent Aid, Inc., was engaged in a full service real estate brokerage business which included representing potential buyers and sellers of real property and potential landlords and tenants with regard to rental properties. As part of the business Rent Aid, Inc. entered into contracts with prospective tenants for an advanced fee, as shown by Exhibit "A" to the Complaint and incorporated herein by reference. That the contract or receipt agreement forms provided by the Respondents, have inserted therein additional language as to specifically stating that "a rental has been obtained when company provides a guaranteed available rental unit upon the terms specified and requested by member. On or about September 16, 1980 Jan Spear and Deborah Nigro entered into the contract, an accurate copy of which is appended to the Complaint as Exhibit "A", with Rent Aid, Inc. That under the terms of the contract, Respondent had the discretion to refuse any and all refunds if they had shown to the prospective tenant an available rental unit which met the terms specified and requested by the prospective tenant, even if the prospective tenant declined to rent said unit and demanded a refund of the paid fee within the required time frame. That Respondent's practice was to refuse demands for refund made where, in Respondent's opinion, a bona fide effort had been made to obtain a rental, which efforts had been unsuccessful through no fault of Respondent's. Jan Spear and Deborah Negro made written demand upon Respondent's for a partial refund of the fifty ($50) fee which they had paid Respondent's pursuant to the contract. This demand was made within thirty days of the contract date as shown by therefund refusal dated October 12, 1980, attached to the Complaint as Exhibit "B" and incorporated herein by reference as true and accurate. The contract utilized by Respondent's does not strictly conform to the refund required by Rule 21V-10,30 in that the conditions under which a refund would be payable are restricted beyond the scope of said Rule, and SS 475.453(1), Florida Statutes. Respondent utilized the Contract form in question in reliance upon advice received from his prior counsel, Gregory Jones, as shown by a letter dated April 1, 1980. A true and accurate copy of which is attached hereto as Exhibit "C". Sal Carpino, attorney for the Department of Professional Regulation, had been provided with a copy of the form utilized by Respondent and had approved the format of said form without approving a discrepancy of the language in question in this proceeding, to wit: "a rental has been obtained with company (Rent Aid, Inc.) provides a guaranteed available rental unit upon the terms specified and requested by members." In response to this proceeding, Respondent has made full and complete refund to Jan Spears and Deborah Nigro and has agreed to voluntarily stop all use of the Contract form in question, and use only such a form as strictly complies with 475.453(1) and Rule 210-10.30 and to furnish a copy of said form to the Department conformance with said Rule."
Recommendation That the Board of Real Estate issue a private reprimand and impose a $100 fine against Respondents Jack Braunstein and Rent Aid, Inc. for violation of Subsections 475.25(1)(d) and (e), Florida Statutes. DONE AND ENTERED this day of March, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire Suite 101 2715 East Oakland Park Boulevard Ft. Lauderdale, Florida 33306 John P. Gaudiosi, Esquire 3801 North Federal Highway Pompano Beach, Florida 33064 Frederick H. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 C.B. Stafford, Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32801
The Issue The issues are as follows: (a) whether Respondent failed to make documents available to Petitioner in violation of Section 475.5015, Florida Statutes; (b) whether Respondent obstructed or hindered the enforcement of Chapter 475, Florida Statutes, or hindered the performance of any person acting under the authority of that chapter in violation of Sections 475.25(1)(e) and 475.42(1)(i), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
Findings Of Fact Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida. Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it in 1999. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc. On or about September 11, 1998, Harper Fields, Esquire, filed a complaint with Petitioner. The complaint alleged that Respondent had mismanaged his wife's rental property pursuant to a property management agreement. The complaint resulted in an investigation and subsequent Administrative Complaint in DBPR Case No. 98-83963. That case became the subject of the Recommended Order in DOAH 02-2720PL, entered contemporaneously with the Recommended Order in the instant case. By letter dated November 25, 1998, Petitioner informed Respondent that Mr. Fields had filed a complaint against her. The letter stated that Petitioner's investigator, Sidney Miller, would be in contact with Respondent to discuss the complaint in detail. Respondent sent Mr. Miller a letter dated December 20, 1998. In the letter, Respondent attempted to explain her involvement in the management of the rental property owned by Mrs. Paula Fields. During the investigation of the complaint, Mr. Miller requested Respondent to furnish him all documentation related to the management of Mrs. Field's rental property. The initial request included documentation about the transaction for the months of February through April 1998, including, but not limited to, monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts and copies of supporting checks, deposits slips, and transfers. Soon thereafter, Respondent furnished Mr. Miller with some of the requested information. However, Respondent never provided Mr. Miller with a copy of the property management agreement at issue in DOAH Case No. 02-2720PL. Mr. Miller also requested information regarding any background check that Respondent conducted before renting Mrs. Field's property to Donnda Williams. Respondent provided this information to Mr. Miller under cover of a letter received by Mr. Miller on June 16, 1999. Mr. Miller's review of Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occur in an account than a corresponding bank statement. Mr. Miller also discerned that Respondent transferred $1,000 from her rental escrow account to her operating account on February 10, 1998. Additionally, Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances; but her March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20. Respondent transferred $1,000 on March 2, 1998, and $8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative balance on Respondent's monthly statement reconciliation for her rental escrow account. Mr. Miller addressed his concerns relating to Respondent's rental escrow account in writing on June 25, 1999, and verbally on June 29, 1999. Mr. Miller requested Respondent to explain the March 1998 transfers and the negative balances reflected in the monthly statement reconciliations for the rental escrow account in the months of February through April 1998. Mr. Miller's June 25, 1998, letter requested additional information, stating as follows: I will also need the deposit slips and reconciliation for the rental escrow account for January 1998 along with copies of the bank statements, reconiliation's [sic] and deposits slips for any other account you maintained in January 1998. In addition please provide me with copies of the reconciliation's [sic] for the escrow account and the rental escrow account from May 1998 through the month you closed these accounts. If you maintained any other real estate escrow accounts for the period of January 1998 to this date, provide me with the same information. Respondent received Mr. Miller's June 25, 1999, letter. However, she hired an attorney and forwarded to him the records that she believed were responsive to Mr. Miller's request. Mr. Miller did not learn that Respondent had hired an attorney until he talked to her on June 29, 1999. On or about June 29, 1999, Petitioner explained to Mr. Miller that she had been in the State of Washington caring for a sick relative during parts of January, February, and March 1998. She did not have her rental escrow account checkbook with her when disbursements were due from that account. Therefore, Respondent made the disbursements from her operating account. She made the transfers from her rental escrow account to her operating account to facilitate making the payments in this manner. Upon learning that counsel represented Respondent, Mr. Miller contacted the attorney by telephone. The purpose of the call, in part, was to request the attorney to file a letter of representation. Because the attorney was unavailable, Mr. Miller left a message requesting the attorney to return the call. The attorney did not respond to the message. After not receiving any further information from Respondent or her attorney, Mr. Miller sent Respondent a letter dated November 1, 1999. The letter requested the status of the records requested in Mr. Miller's June 25, 1999, letter. Respondent received the November 1, 1999, and forwarded it to her attorney. In a letter dated November 29, 1999, Respondent's attorney acknowledged that he had received Mr. Miller's November 1, 1999, letter. The attorney stated that he had instructed Respondent to furnish Mr. Miller with copies of the cashed checks for the two transfers that Mr. Miller was inquiring about. The November 29, 1999, letter from Respondent's attorney did not otherwise address the information requested by Mr. Miller's June 25, 1999, letter. In correspondence dated January 22, 2000, Respondent's attorney explained that Respondent had issued the attached copies of checks while she was in the State of Washington during her father's illness only to avoid delay in payment. Attached to the letter were copies of checks, front and back, of Respondent's operating account for her business, Park Avenue Properties, Inc. The copies of checks were issued in February through April 1998. Respondent had furnished Mr. Miller with copies of these checks in June 1999. The January 22, 2000, letter from Respondent's attorney was otherwise not responsive to Mr. Miller's June 25, 1999, letter. Specifically, there were no copies of deposit slips and reconciliation for the rental escrow account for January 1998. There were no documents or reference to the same information for any other accounts that Respondent maintained in 1998. There were no copies of the reconciliations for the rental escrow account from May 1998 through January or February 1999 when Respondent closed her accounts. During the hearing, Respondent admitted that the information furnished to Mr. Miller under cover of the January 22, 2000, letter was not responsive to the request in Mr. Miller's June 25, 1999, letter. At no time during the investigation did Respondent explain that the documents reflected paid personal expenses, as well as expenses paid on behalf of clients out of the same account. In a letter dated April 6, 2000, Mr. Miller sent yet another request for records and information to Respondent's attorney. This letter requested an explanation regarding certain transfers between Respondent's accounts on March 6, April 6, and April 14, 1998. Mr. Miller needed copies of the cancelled checks and better copies of the bank statement for January 1998 for the rental escrow account. Mr. Miller also requested the bank statements, reconciliations, deposit slips and cancelled checks for the rental escrow, and operating accounts for February 1998. The April 6, 2000, letter again requested information previously requested in June 1999. This information included the following: (a) deposit slips for the rental escrow account in January 1998, along with copies of the bank statements, reconciliations, and deposit slips for any other accounts that Respondent maintained in January 1998; (b) copies of the reconciliations for the operating account and the rental escrow account from May 1998 through the month that Respondent closed the accounts; and (c) the same information for any other real estate escrow accounts that Respondent maintained from January 1998 to June 25, 1999. Mr. Miller's April 6, 2000, letter was sent to Respondent's attorney by certified mail. The return receipt indicates that the attorney's office received the letter on April 10, 2000. In a letter dated October 26, 2000, Respondent's attorney sent Petitioner's counsel a letter. According to the letter, Respondent had provided copies of all the checks and the explanation behind the transactions. The letter states that the attorney had not heard from Mr. Miller after the attorney sent the January 2000 letter. On or about June 3, 2002, Respondent's attorney sent Petitioner's counsel some 351 pages of documents, indicating that they included all documents requested by Mr. Miller and that they were responsive to all discovery requests. However, clear and convincing evidence indicates that the documents were not responsive to Mr. Miller's June 25, 1999, and April 6, 2000, record requests. During the hearing, Respondent agreed that the documents were not responsive to Mr. Miller's requests for records related to Respondent's rental escrow account from May 1998 through the time she closed the account. Because Mr. Miller was unable to review the records he requested, he was unable to perform an audit of Respondent's accounts. Mr. Miller needed records covering a six-month period in order to audit Respondent's accounts. Without the records, Mr. Miller was unable to determine whether problems in Respondent's rental escrow account occurred at other times. Respondent testified during the hearing that she had provided Mr. Miller with all of the records in her possession. Her testimony in this regard is not persuasive. Respondent admitted that Chapter 475, Florida Statutes, required her to keep all of her records for four or five years. The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Florida Department of Business and Professional Regulation, Division of Real Estate, enter a final order revoking Respondent's license. DONE AND ENTERED this 15th day of November, 2002, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of November, 2002. COPIES FURNISHED: Kenneth D. Cooper, Esquire 400 Southeast Eighth Street Fort Lauderdale, Florida 33316 Stacy N. Robinson Pierce, Esquire Department of Business and Professional Regulation 400 West Robinson Street Suite N308 Orlando, Florida 32801-1772 Buddy Johnson, Director Nancy P. Campiglia, Chief Attorney Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The Department adopts and incorporates in this Final Order the Statement of the Issues in the Recommended Order. The Department's exceptions to the Statement of the Issues in the Recommended Order are not material and are therefore withdrawn.
Findings Of Fact Kjell Bergh operates a Volvo dealership in Minnesota. He also has other business interest in the United States and abroad. In 1986, he received approval from Volvo to open a Volvo dealership in the area of Boca Raton, Florida. Boca Raton zoning makes it very difficult to locate automobile dealerships there. Mr. Bergh therefore located a suitable five acre site to build the Volvo dealership in nearby Delray Beach, Florida. The property was purchased in 1987 solely to build the automobile dealership on it. At some point Mr. Bergh also received a Volkswagen franchise, and operates both the Volvo and the Volkswagen franchises on the Delray Beach property. Title to the land was taken individually in the names of Kjell and his wife Mary Bergh, as joint tenants, on the advice of their tax counsel. The purchase price for the land was approximately one million dollars. The automobile dealership is operated by Borton Motors Incorporated, a Florida corporation organized in 1986. It is owned 75 percent by the Petitioners, Kjell and Mary Bergh, and 25 percent by the vice president and general manager, Loren Sheffer, who has also invested money in the dealership. It is common in the automobile industry for local managers to have a personal stake in automobile dealerships they manage for absentee owners. The manager, however, has only a minority interest, and the automobile manufacturer, Volvo, holds Mr. Bergh responsible for the operation of the dealership. The Berghs financed the purchase of the land and the buildings used as the automobile dealership facilities through the Barnett Bank of Palm Beach County. On July 23, 1987, the Berghs executed a note and mortgage for $2,000,000 in favor of the Barnett Bank for the purchase of the property along with a construction loan agreement to build the dealership facility. The rate and mortgage were modified to increase the amount borrowed to $2,250,000 in May and June of 1988. The land was then leased to Borton Motors, Inc., the legal entity which operated the automobile dealerships. As a condition of obtaining the loan from Barnett Bank, the bank required that Borton Motors, Inc., guarantee the loan which the bank had made to Mr. and Mrs. Bergh, and also required the Berghs to assign the lease to Barnett Bank. The terms of the mortgage give Barnett Bank the right to collect rents and other payments from the property, and prohibits the termination or cancellation of the lease without Barnett's permission. Barnett Bank had the right to approve the lease provisions and to set the amount of the rent so that the debt service coverage ratio would be no less than 1.2 times the amount borrowed. In connection with the loan by Barnett Bank, on July 27, 1987, Borton Motors, Inc., gave to Barnett Bank "its continuing and unconditional guarantee of the payment in full when due of any and all indebtedness of Debtor [Kjell and Mary Bergh] to Bank to the same extent as if Guarantor [Borton Motors, Inc.] were the principal debtor of the indebtedness" (Exhibit 1D). From the inception of the transaction, it was intended that the entity operating the automobile dealership, Borton Motors, Inc., would finance the purchase of the real estate on which the automobile dealership would be located, and the construction of necessary improvements. This was accomplished through the rental payments Borton Motors, Inc., would make to the Berghs, who had actually taken title to the land. Through its guarantee, Borton Motors, Inc., was as liable to Barnett Bank as were the Berghs, from the inception of the loan. The Berghs hoped to receive a return on monies they invested in the automobile dealership, whether for real estate, improvements to the real estate, inventory in the form of cars, or parts, or for payments made for labor to its sales force and service technicians. It is misleading to state that the Berghs intended to receive a return on the real estate investment they made. The return on the real estate is not the result of a separate investment made by the Berghs, it is instead a part of the overall operation of the dealership. The Berghs are not investors in real property who happened to lease property to a tenant who happens to operate a automobile dealership on that property. The Berghs do take a federal income tax deduction for interest paid on the note to Barnett Bank and report the rent received from Borton Motors, Inc., as income on their federal income tax returns. Petitioners have acquired other debt on behalf of the corporation and do not receive any money from the corporation over and above the amount of the mortgage and other indebitness. The Barnett Bank of Palm Beach County eventually sold its loan to the Berghs to Volvo Finance North American, Inc., in late April 1992. This sale has no effect on the taxation of the transaction of issue. On February 8, 1991, the Department of Revenue sent to the Petitioners a form requesting them to file a "application for Sales and Use Tax Registration" and asking them to report the rental income they had received from Borton Motors, Inc., on the dealership property for the period February 1986 through February 1991. The Berghs filed the application and supplied the rental figures to the Department, but maintained no tax was due because the "amount paid reflects the actual debt service." The Department sent the Berghs a Notice of Assessment on February 28, 1991, stating that they owed $71,043.29 in tax, penalties and interest, representing a sales tax at the rate of 6 percent upon the lease payments they had received from Borton Motors, plus penalties and interest. The Department also gave them notice of a right to protest the assessment. The Berghs did protest the assessment to the Department's Bureau of Hearings and Appeals, which sustained the assessment, but agreed to reduce the penalty involved. The Berghs paid $7,043.50 plus interest of $2,327.98 which represents the amount of payments from Borton Motors, Inc., in excess of the debt service due to Barnett Bank.
Recommendation Based on the foregoing, it is recommended that a final order be entered withdrawing the assessment of tax. DONE AND ENTERED this 28th day of September, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2106 The following constitutes my rulings pursuant to Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-19. Adopted, though not verbatim. Respondent's Proposed Findings: 1. Accepted, excepted for last sentence which is rejected as unsupported by weight of the evidence. 2.-6. Adopted. Subordinate to hearing officer findings on this point. 8.-10. Accepted, but not verbatim. COPIES FURNISHED: Cynthia S. Tunnicliff Carlton, Fields, Ward, Emmanuel, Smith & Cutler P.A. Post Office Drawer 190 Tallahassee, Florida 32302 Mark T. Aliff, Esquire Assistant Attorney General Department of Legal Affairs Tax Section, Capitol Building Tallahassee, Florida 32399-1050 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact Based upon the documentary evidence and the testimony taken at the hearing, the following relevant facts were uncontroverted: At all times pertinent to this proceeding, Respondents National Home Realty, Inc. and Philip Marzo were licensed real estate brokers and Respondent Steve Mishkin was a licensed real estate salesman holding license numbers 0210856, 0056147 and 0151878, respectively. At all times pertinent to this proceeding, National Home Realty, Inc. was qualified by Philip Marzo, a licensed real estate broker. At all times pertinent to this proceeding, National Home Realty, Inc. was engaged in the business of negotiating rental contracts and in furnishing for an advance fee, rental information as to available residential rentals to prospective tenants. In connection therewith, the company used Service Agreements of which Petitioner's Exhibits 1 and 2 are accurate examples. The Service Agreements do not comport with Rule 12V-10.30, Florida Administrative Code, which requires a specific refund notice to be placed on any such contract, nor do the contracts comply with Section 475.453(1), Florida Statutes, which provides for full refund in the event the rental information provided by the broker or salesman to a prospective tenant is not current or accurate in any material respect. In October of 1980, Grace Pasquale, as a prospective tenant, signed a rental service agreement with National Home Realty, Inc., on a form supplied by National Home Realty, and paid to National Home Realty a $65 cash advance fee for the specified rental services. During a period of approximately 25 days after the date of the contract, Pasquale was not able to locate a residential rental to meet her requirements, as set forth in her rental contract, Petitioner's Exhibit 2, from the list of alleged available rentals supplied to her by National Home Realty. As a result, Pasquale made written demand within 30 days of the date of the contract for 75 percent of her advance fee, all as provided for by Section 475.453(1), Florida Statutes, and Rule 12V-10.30, Florida Administrative Code. That on or about June of 1981, after intervention by the Department of Professional Regulation, Grace Pasquale received a refund. On or about February 16, 1981, prospective tenant Bruce Blair paid to National Home Realty a $75 cash advance fee, for agreement for rental services including a list of available rentals to meet the specific requirements of prospective tenant Bruce Blair. Only one listing was supplied to Blair and this did not meet Blair's requirements as set forth in his agreement, Petitioner's Exhibit 6. Failing and unable to obtain a rental by and through National Home Realty, Blair located a rental through his own efforts unconnected with the services of National Home Realty. Within 30 days of the date of his agreement, Petitioner's Exhibit 6, Blair made written demand on National Home Realty for a 75 percent refund of his advance fee, in accordance with the provisions of Rule 12V-10.30, Florida Administrative Code. In response to his demand, National Home Realty issued check number 1735, dated March 25, 1981, to the order of Bruce Blair on the account of National Home Realty, Inc. at the Barnett Bank for $18.75 being only 25 percent of the advance fee paid and, therefore, contrary to the provisions of the above stated rule. When Blair presented the check for payment, it was not honored due to the account having been closed. In April of 1981, Respondent paid Blair in cash for the balance due on his refund. Respondent Marzo, the qualifying broker who worked in the office, never personally refused a 75 percent refund to anyone who requested the same within 30 days from the date of a service contract. However, while he was qualifying broker, certain salesmen in the office ignored demands for refunds. Marzo was unaware that this was occurring until it was brought to his attention through the Department's direct intervention. When Marzo realized there was a problem with the salesmen making timely refunds, he instituted an unwritten policy that anyone who requested a refund should be given one. Despite this directive, salesmen continued to refuse or delay refunds due to the manner in which commissions were paid by the office. Respondents Marzo and Mishkin never met either Grace Pasquale or Bruce Blair. Although Respondent Mishkin never denied a refund to anyone who requested one, he would harass or make a person who asked for a refund "feel pretty bad" for doing so. (See Transcript at 37)
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a Final Order be entered revoking the license of National Home Realty, Inc., suspending the license of Philip Marzo for a period of six (6) months and dismissing the charges against Steve Mishkin. DONE and ORDERED this 7th day of October, 1982, in Tallahassee, Florida. SHARYN L. SMITH, 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 7th day of October, 1982. COPIES FURNISHED: Michael J. Cohen, Esquire Suite 101 Kristin Building 2715 East Oakland Park Boulevard Fort Lauderdale, Florida 33306 Brian Hal Leslie, Esquire 1795 North East 164th Street North Miami Beach, Florida 33160 Carlos B. Stafford, Executive Director Florida Real Estate Commission 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Samuel R. Shorstein, Secretary Department of Professional Regulation Old Courthouse Square Building 130 North Monroe Street Tallahassee, Florida 32301
The Issue The issue in this case is whether Monroe County Ordinance 004-1997, approved by a Final Order of the Department of Community Affairs, DCA Docket No. DCA97-280-FOI-GM, is consistent with the Principles for Guiding Development set forth in Section 380.0552, Florida Statutes (1997)?
Findings Of Fact The Parties. Petitioners are all involved in the rental of real property in unincorporated Monroe County, Florida. Petitioner John H. Rathkamp is a resident of the State of Georgia. (Admitted fact). Mr. Rathkamp is the owner of real property located in unincorporated Monroe County described as Lost 6, Block 9, Redfish Lane, Cudjoe Ocean Shores Subdivision, Cudjoe Key (RE #188684000800). At the time of purchase, the property was improved. At all times material to this proceeding, Mr. Rathkamp's property was located in an Improved Subdivision land use district. (Admitted facts). Petitioner Monroe County Vacation Rental Managers, Inc., is a Florida not-for-profit corporation doing business in Monroe County. Its principal place of business is located at 701 Caroline Street, Key West, Florida. (Admitted facts). Petitioner Lower Keys Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is Post Office Box 4330511, Mile Maker 31, Big Pine Key, Florida. (Admitted facts). Petitioner Marathon Chamber of Commerce is a Florida not-for-profit corporation which conducts business in Monroe County. Its principal place of business is 12222 Overseas Highway, Marathon, Florida. (Admitted facts). Respondent, the Department of Community Affairs (hereinafter referred to as the "Department"), is an agency of the State of Florida. The Department is charged with responsibility for, among other things, the approval or rejection of comprehensive plan amendments and land development regulations adopted by the Monroe County Board of County Commissioners. Chapter 163, Florida Statutes, and Sections 380.05 and 380.0552, Florida Statutes (1997). Intervenor, the Board of County Commissioners of Monroe County (hereinafter referred to as the "County"), is the governing body of Monroe County, Florida, a political subdivision of the State of Florida. Among other things, the County is responsible for adopting a comprehensive plan and land development regulations for unincorporated Monroe County. Unincorporated Monroe County has been designated as the Florida Keys Area of Critical State Concern (hereinafter referred to as the "Florida Keys ACSC"), pursuant to Sections 380.05 and 380.0552, Florida Statutes, since 1979. As an area of critical state concern, all comprehensive plan amendments and land development regulations adopted by the County must be reviewed by the Department for consistency with the Principles for Guiding Development (hereinafter referred to as the "Principles"), set out in Section 380.0552(7), Florida Statutes. Standing. The parties stipulated that Petitioners are all substantially affected persons as those terms are used in Section 120.569, Florida Statutes (1997). The evidence in this case proved that Petitioners' substantial interests have been determined by the Department's Final Order approving the land development regulation at issue in this case. Petitioners have standing to initiate, and participate in, this proceeding. The evidence also proved that the County's substantial interests were determined by the Department's Final Order. The County has standing to participate in this proceeding. The County's Adoption of Ordinance No. 004-1997. During 1995 the County directed that public hearings be held on the issue of the rental of real estate for short periods of time for vacation purposes in Monroe County. Public hearings were held before the County's Development Review Committee in Marathon, Monroe County, Florida, on July 25, 1995, and December 2, 1995. Public hearings were also held before the County's Planning Commission on the following dates and at the following locations in Monroe County: Date Location March 7, 1996 Marathon March 21, 1996 Key West April 3, 1996 Key Largo April 18, 1996 Marathon April 22, 1996 Duck Key July 15, 1996 Duck Key September 5, 1996 Marathon On November 5, 1996, a referendum was placed on the ballot in Monroe County. The referendum asked the following question: "Should transient rentals of less than 28 days be allowed in (IS) Improved Subdivisions?" This question was answered "yes" by 51% of the citizens who voted on the referendum. Public hearings to consider an ordinance prohibiting certain vacation rentals were held before the County on December 18, 1996 in Marathon and on February 8, 1997, in Key West. On February 3, 1997, the County passed and adopted Ordinance No. 004-1997 (hereinafter referred to as the "Ordinance"). The Ordinance applies to lands located in unincorporated Monroe County. (Admitted facts). The Department's Review of the Ordinance. On February 25, 1997, the County transmitted a copy of the Ordinance to the Department for approval or rejection pursuant to Section 380.05, Florida Statutes. (Admitted fact). On April 25, 1997, the Department caused notice of Proposed Rule 9J-14.006(11), approving the Ordinance, to be published in the Florida Administrative Weekly. (Admitted fact). A challenge pursuant to Section 120.56, Florida Statutes, to the proposed rule was filed by Petitioners on May 16, 1997. The Department held public hearings in Monroe County on the proposed rule on May 21 and 22, 1997, and June 26, 1997. On May 31, 1997, an amendment to Section 380.05(6), Florida Statutes, became effective. The amendment changed the procedure for approving or rejecting comprehensive plan amendments and land development regulations in areas of critical state concern. Pursuant to the new procedure the Department was required to approve or reject comprehensive plan amendments and land development regulations in areas of critical state concern by final order instead of by rule. (Admitted facts). Petitioners in the rule challenge proceeding stipulated that they would not object, procedurally, if the Department elected to withdraw the proposed rule and issue a final order approving or rejecting the Ordinance. (Admitted fact). On November 26, 1997, the Department caused a Final Order entered November 5, 1997, to be published in the Florida Administrative Weekly, Vol. 23, No. 48. The Final Order was accepted into evidence as Joint Exhibit 5. The Final Order contains Findings of Fact and Conclusions of Law. Those Findings of Fact and Conclusions of Law are hereby incorporated by reference into this Recommended Order. A copy of the Final Order is attached to this Recommended Order. Pursuant to the Department's Final Order, the Department approved the Ordinance as being consistent with the Principles. (Admitted facts). Studies and Reports. One thing that was made abundantly clear during the formal hearing was that no formal studies were conducted by the County during its consideration and adoption of the Ordinance. Instead, the County relied upon information provided to it during the hearings conducted prior to, and during, the adoption of the Ordinance and the County's knowledge about Monroe County. Another fact made abundantly clear was that the Department also did not undertake any formal studies during its review of the Ordinance. The Department relied upon the its knowledge of Monroe County and information that had been provided to the County, summarized in memorandums. The Principles. Section 380.0552(7), Florida Statutes, creates the Principles: To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation. To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat. To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat. To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development. To limit the adverse impacts of development on the quality of water throughout the Florida Keys. To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys. To protect the historical heritage of the Florida Keys. To protect the value, efficiency, cost- effectiveness, and amortized life of existing and proposed major public investments, including: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and Florida Keys Electric Co-op; and Other utilities, as appropriate. To limit adverse impacts of public investments on the environmental resources of the Florida Keys. To make available adequate affordable housing for all sectors of the population of the Florida Keys. To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or man-made disaster and for a post-disaster reconstruction plan. To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource. In determining whether the Ordinance is consistent with the Principles, the Principles must be considered as a whole and no specific provision is to be construed or applied in isolation from the other provisions. Section 380.0552(7), Florida Statutes. The Principles must also be construed and applied with due consideration to the legislative intent. The legislative intent in promulgating Section 380.0552, Florida Statutes, is set out in Section 380.0552(2), Florida Statutes: LEGISLATIVE INTENT.—It is hereby declared that the intent of the Legislature is: To establish a land use management system that protects the natural environment of the Florida Keys. To establish a land use management system that conserves and promotes the community character of the Florida Keys. To establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. To provide for affordable housing in close proximity to places of employment in the Florida Keys. To establish a land use management system that promotes and supports a diverse and sound economic base. To protect the constitutional rights of property owners to own, use, and dispose of their real property. To promote coordination and efficiency among governmental agencies with permitting jurisdiction over land use activities in the Florida Keys. In order for the Ordinance to be consistent with the legislative intent of Section 380.0552(2), Florida Statutes, it must be consistent with the Principles. The Ordinance. The Monroe County 2010 Comprehensive Plan (hereinafter referred to as the "Plan"), establishes the land uses which are allowed and prohibited in Monroe County. The Ordinance provides the following "Purpose": The purpose of this ordinance is to further and expressly clarify the existing prohibition on short-term transient rental of dwelling units for less than twenty-eight (28) days in duration in Improved Subdivisions, mobile home districts (which provide affordable housing) and native areas, and to allow tourist housing uses in all other districts and in improved subdivision districts with a newly-created tourist housing subindicator. The Ordinance defines the terms "vacation rentals" as the rental for tenancies of a dwelling unit for less than twenty- eight days. Hotels, motels, and recreational vehicle spaces are specifically excluded from the definition of "vacation rentals." The Ordinance addresses the following land use districts and prohibits vacation rentals within those district: Sparsely Settled Residential District; Native Area District; Mainland Native Area District; and Commercial Fishing Residential District. The Ordinance addresses the following land use districts and provides that vacation rentals are allowable "if a special vacation rental permit is obtained under the regulations established in Code s9.5-534": Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Urban Residential District; Sub Urban Commercial District. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use; Sub Urban Residential District; Sub Urban Residential District (Limited); Destination Resort District; Maritime Industries District. Vacation rentals are not allowed, however, in commercial apartments with more than six units; and Mixed Use Districts. Vacation rentals are not allowed, however, in commercial apartments with more than six units located in conjunction with a permitted commercial use. The Ordinance addresses the following land use districts and provides that vacation rentals are prohibited except "in gated communities which have (a) controlled access and (b) a homeowner's or property owners' association that expressly regulates or manages vacation rental uses": Urban Residential-Mobile Home District; URM-L District; and Improved Subdivision Districts. Improved Subdivision Districts (hereinafter referred to as "IS Districts"), are the primary, residential districts in Monroe County. 40 The Ordinance establishes a new district, the Improved Subdivision-Tourist Housing District (hereinafter referred to as the "IS-T District"). Vacation rentals are allowed in IS-T Districts under certain conditions: A map amendment designating a contiguous parcel as IS-T may be approved, provided that the map amendment application (and subsequent building permit applications and special vacation rental permit applications) meet the following standards, criteria and conditions: The IS-T designation is consistent with the 2010 Comprehensive Plan and there is no legitimate public purpose for maintaining the existing designation. The IS-T designation allowing vacation rental use does not create additional trips or other adverse traffic impacts within the remainder of the subdivision or within any adjacent IS district: The parcel to be designated IS-T must contain sufficient area to prevent spot zoning of individual parcels (i.e., rezonings should not result in spot-zoned IS-T districts or result in spot-zoned IS districts that are surrounded by IS-T districts). Unless the parcel to be rezoned contains the entire subdivision, there will be a rebuttable presumption that spot-zoning exists, but the Board of County Commissioners may rebut this presumption by making specific findings supported by competent, substantial evidence that: the designation preserves, promotes and maintains the integrity of surrounding residential districts and overall zoning scheme or comprehensive plan for the future use of surrounding lands; does not result in a small area of IS-T within a district that prohibits vacation rentals; the lots or parcels to be designated IS-T are all physically contiguous and adjacent to one another and do not result in a narrow strip or isolate pockets or spots of land that are not designated IS-T, or which prohibit vacation rentals; and the IS-T designation is not placed in a vacuum or a spot on a lot-by-lot basis without regard to neighboring properties, but is a part of an overall area that allows vacation rentals or similar compatible uses. In addition to the requirements contained in Code s.9.5-377 (District Boundaries), an IS-T district shall be separated from any established residential district that does not allow tourist housing or vacation rental uses by no less than a class C bufferyard: Vacation rental use is compatible with established land uses in the immediate vicinity of the parcel to be designated IS- T: and Unless a map amendment is staff-generated (i.e., initiated by Monroe County), an application for a map amendment to IS-T shall be authorized by the property owner(s) of all lots (or parcels) included within the area of the proposed map amendment. The Ordinance provides that vacation rentals are prohibited in Offshore Island Districts unless they "were established (and held valid state public lodging establishment licenses) prior to January 1, 1969." Finally, the Ordinance provides, in part, that the following uses are permitted in Recreational Vehicle Districts: Recreational vehicle spaces. RV spaces are intended for use by traveling recreational vehicles. RV spaces may be leased, rented or occupied by a specific, individual recreational vehicle, for a term of less than twenty-eight days, but placement of a specific, individual Recreational Vehicle (regardless of vehicle type or size) within a particular RV park for occupancies or tenancies of 6 months or more is prohibited. Recreational Vehicles may be stored, but not occupied, for periods of 6 months or greater only in an approved RV storage area (Designated on a site plan approved by the Director of Planning) or in another appropriate district that allows storage of recreational vehicles. . . . Code s9-534 of the Ordinance requires a permit for vacation rentals, except for vacation rentals located within a controlled access, gated-community or within a multifamily building which has 24-hour on-site management or 24-hour on-site supervision. This Code section also provides certain conditions which must be met by vacation rentals, requires that a copy of any permit be provided to surrounding property owners, provides for the circumstances under which a permit may be revoked, provides for certain penalties, and deals with other miscellaneous matters. Code s9-534 is hereby incorporated into this Recommended Order. The Ordinance is a "land development regulation" as defined in Section 380.031(8), Florida Statutes. (Admitted fact). Petitioners' Challenge to the Ordinance. On December 16, 1997, Petitioners timely filed a challenge pursuant to Sections 120.569 and 120.57, Florida Statutes, to the Department's Final Order approving the Ordinance. (Admitted facts). In addition to alleging that the Ordinance is not consistent with the Principles, Petitioners also challenged some of the specific findings of fact contained in the Final Order entered by the Department. While the Department has agreed that it has the burden of proving the "validity of the final order," for purposes of Sections 380.05 and 380.0552, Florida Statutes, the only "final order" which the Department entered in this matter is the final line of the order: "WHEREFORE, IT IS ORDERED that Monroe County Ordinance No. 004-1997 is consistent with Section 380.0552(7), F.S., and is hereby approved." Because this is a de novo proceeding, the "facts" and "conclusions of law" the Department reached in taking the "proposed agency action" at issue in this case, are not controlling. Petitioners also alleged that the Ordinance is not "consistent with the legislative intent for designation of unincorporated Monroe County as the Florida Keys ACSC expressed in Section 380.0552(2), F.S." Chapter 380, Florida Statutes, does not specifically require the Department to independently determine whether a land development regulation is consistent with the legislative intent. The Department is only required to determine consistency with the Principles. If a land development regulation is consistent with the Principles, it will also be consistent with the legislative intent. Finally, Petitioners alleged in their Petition that the Ordinance is not consistent with the Plan. This allegation was not included in the Prehearing Stipulation. This issue was, therefore, waived by Petitioners. Even if not considered waived, the issue of whether the Ordinance is consistent with the Plan is not an issue which has been properly brought before this forum. The challenge in this case was instituted pursuant to Chapter 380, Florida Statutes. Nowhere in Chapter 380, Florida Statutes, is the Department required or authorized to review a land development regulation for consistency with a growth management plan. The Department's authority to review a land development regulation for consistency with a growth management plan comes from Chapter 163, Florida Statutes. Challenges to Department's decisions under Chapter 163, Florida Statutes, must be instituted pursuant to Section 163.3213, Florida Statutes. No such proceeding has been instituted by Petitioners. Petitioners, although not specifically alleged in their petition or the Prehearing Stipulation, presented evidence at hearing and argument in their proposed order concerning what the County and Department knew or did not know, and what they did or did not do, at the time of their respective actions. Because this is a de novo proceeding, such knowledge or actions, do not support a finding that the Ordinance is not consistent with the Principles unless, in the case of required information, the information is not provided at hearing and, in the case of an action that was not taken, the action was required by rule or statute. The evidence presented at hearing in this case was sufficient to determine consistency of the Ordinance with the Principles. The evidence also failed to prove that the County or the Department failed to take any action required by rule or statute with regard to their respective roles in this matter. Sound Economic Development of Monroe County. Section 380.0552(7)(d), Florida Statutes, includes the following principle: "To ensure the maximum well-being of the Florida Keys and its citizens through sound economic development." This principle is consistent with the legislative intent set out in Section 380.0552(2)(e), Florida Statutes, that a local government establish a land use management system that promotes and supports a diverse and sound economic base. Undoubtedly, the evidence in this case proved that the Ordinance will cause a negative impact to the economy of Monroe County. No economic impact study was necessary to prove this fact. Although neither the County nor the Department conducted an economic impact study prior to the County's adoption and the Department's review of the Ordinance, the County and the Department were aware of the fact that there would be a negative economic impact as a result of the Ordinance and took that fact into consideration in carrying out their respective roles. More importantly, there is no requirement in Chapters 120 or 380, Florida Statutes, that an economic impact study be performed prior to adoption of a land development regulation or during the Department's review. Nor is the Department authorized as part of its review pursuant to Chapter 380, Florida Statutes, to require such a study be conducted by the County. This is a de novo proceeding. Therefore, it was incumbent upon the Department in order to meet its burden of proof to present sufficient competent substantial evidence concerning the economic impact of the Ordinance during the formal hearing. Much of the proof was presented by Petitioners. The combined proof of the parties in this case concerning the economic impact of the Ordinance is sufficient to make a determination as to whether the Ordinance is consistent with Principle "d." The economy of Monroe County is primarily dependent upon the tourist industry. The tourist industry in turn is largely dependent on the natural resources of Monroe County. As a consequence, the majority of the Principles provide for a consideration of impacts on the environment of Monroe County. Ultimately, the economic viability of Monroe County depends on its environmental resources. Tourists who vacation in Monroe County generally require lodging while on vacation. Lodging in Monroe County is diverse and includes hotels, motels, camp grounds, RV parks, and rentals of dwellings, including rentals for periods of less than 28 days (rentals of dwellings of less than 28 days are hereinafter referred to as a "Short-Term Rental Property"). There are some tourists who prefer to stay in Short- Term Rental Property over other types of accommodations available in Monroe County. There are even some tourists who may go elsewhere if they are unable to find Short-Term Rental Property in Monroe County. A reduction in available Short-Term Rental Property may also cause some tourists to come to Monroe County during periods during the year when tourism is lower. The evidence, however, failed to prove the extent of the loss of tourists or the extent to which tourists may come to Monroe County during the off-season if there is a reduction in the available number of Short-Term Rentals Property as a result of the Ordinance. Short-Term Rental Property makes up a significant portion of tourist lodging available throughout Monroe County. Short-Term Rental Property has been a part of the tourist economy of Monroe County for the past twenty to thirty years. Short-Term Rental Property, however, has increased significantly recently as the number of dwellings in Monroe County has increased. The use of properties as Short-Term Rental Property adds to the economy of Monroe County by providing work for a number of businesses in Monroe County. Those businesses include real estate brokers, pool maintenance, lawn maintenance, home repairs, maid/cleaning services, and many of the businesses associated with the tourist industry. Occupancy rates for Short-Term Rental Properties in Monroe County have been averaging approximately 30% annually. Occupancy occurs primarily during the peak tourist season from December or January through April. To a lesser extent, occupancy is higher in August also. Occupancy rates in Monroe County hotels and motels during the peak season have been approximately 80% to 100%. There is currently a moratorium in the Florida Keys on the construction of hotels and motels. The moratorium is only effective through 2006. The construction of new transient rentals and the conversion of single-family residences to transient rentals are prohibited by the Plan. These measures represent an effort of the County to regulate the influx of tourists into Monroe County and very likely result in an increase of properties used for Short-Term Rental Property to meet the demand for tourist lodging. As a result of the Ordinance's restriction on where Short-Term Rental Property will be allowable in Monroe County, there will be some reduction in the number of Short-Term Rental Properties available to tourist in Monroe County. Petitioners have estimated that there will be a reduction of in excess of 3,000 Short-Term Rental Properties as a result of the Ordinance. This number is based upon the assumption that there are 4,100 Short-Term Rental Properties in Monroe County, that 76% of those rentals are located in IS districts, and that all 76% of the rentals in IS districts will be lost. The evidence failed to support a finding that such a reduction will occur. First, the Ordinance does not prohibit all Short-Term Rental Property in Monroe County. The use of properties for Short-Term Rental Property is not prohibited in several land use districts listed, supra. Short-Term Rental Property located in the cities of Key West, Key Colony Beach, and Village of Islamorada are also not subject to the Ordinance. There are approximately 12,000 seasonal rental units in incorporated and unincorporated Monroe County. To the extent that the demand for Short-Term Rental Property is not met by properties which are no longer available for use as a Short-Term Rental Property under the Ordinance, some part of that demand will be met by seasonal units not impacted by the Ordinance: those units located in land use districts in which Short-Term Rental Properties are not prohibited and in incorporated areas. The market will react to the market conditions as they change under the Ordinance. Petitioners' expert witness, Charles Ilvento, provided estimates of the losses in revenue and sales tax collections in Monroe County (at a rate of 11.55 per cent) as a result of the Ordinance. Those estimates were that Monroe County would experience $400,235,747.00 to $500,294,683.00 per year in economic losses and $6,262,444.00 per year in sales tax losses. The Department's and County's expert, Dr. Nicholas, estimated that the economic loss from the Ordinance to Monroe County would only be approximately 20 per cent of the loss projected by Mr. Ilvento and would last only two years. Mr. Ilvento also suggested that the losses would be continuing losses. The weight of the evidence failed to support the extent of losses suggested by Mr. Ilvento. First, in making his estimates, Mr. Ilvento relied upon the number of Short-Term Rental Properties Petitioners had estimated would be lost as a result of the Ordinance. Those estimates are too high. See Findings of Fact 68 and 69. Secondly, Mr. Ilvento did not take into account the economic benefit of keeping residential uses of property and the more commercial activities of Short-Term Rental Properties separate as required by the Ordinance. Because of the value of Short-Term Rental Properties, finding property for permanent residents is more difficult. In some areas, the use of residential property for Short-Term Rental Properties can dominate the residential nature of an area to a great enough extent that the residential sector will decline and withdraw. Thirdly, Mr. Ilvento did not take into account the increase in income that would be likely to occur from the sales of properties formerly used as Short-Term Rental Property which Petitioners assert will have to be sold. Fourthly, Petitioners' estimate of the number of properties that will be sold (50%), which Mr. Ilvento relied upon in reaching his estimates, is not reasonable. Petitioners' estimate of the number of Short-Term Rental Properties that will be sold assumes that the owners of those properties will no longer be able to afford them without the rental income they had previously enjoyed from the properties. This assumption is not realistic. It is not realistic to assume that half the owners of Short-Term Rental Properties acquired their property without taking into account the possibility that they would not be able to rent the property. Additionally, it is not reasonable to assume that an owner who is faced with the inability to carry the debt on a property will necessarily elect to sell it rather than rent it on a long-term basis. The evidence also proved that the economy of Monroe County will be benefited to the extent that the Ordinance enhances the availability of affordable housing and reduces adverse impacts to the environment of Monroe County, as discussed, infra. The benefits to the economy as a result of the increase in affordable housing and the reduction of adverse impacts to the environment will not be substantial, however. The weight of the evidence in this case proved that there will be an overall economic loss in Monroe County as a result of the Ordinance. That loss should last approximately two to three years. The amount of the loss projected by Dr. Nicholas is a more reasonable estimate of the loss which will occur. That loss, however, will be substantial. Protection of the Public Health, Safety, and Welfare. Section 380.0552(7)(l), Florida Statues, includes the following principle: "To protect the public health, safety, and welfare of the citizens of the Florida Keys and maintain the Florida Keys as a unique Florida resource." The County, in adopting the Ordinance, was primarily exercising its police power to protect the public health, safety, and welfare of the citizens of Monroe County. The County decided to exercise its power by limiting the types of activities allowable in areas designated for residential use. The County's decision was based upon extensive testimony on the negative impacts of Short-Term Rental Property in neighborhoods given at the public hearings conducted by the County. Additionally, the County was aware of the results of the November 5, 1996, referendum vote in which residents of the County voted in favor of prohibiting Short-Term Rental Property in IS districts. Although the testimony concerning the negative impacts of Short-Term Rental Property and the results of the referendum vote relied upon by the County constitutes hearsay, it does corroborate and explain the testimony of Denise Werling, a permanent resident of Monroe County. It is difficult to characterize the rental of Short- Term Rental Property as purely commercial or residential. While Short-Term Rental Property is being used by the people who rent the property as housing, which is in the nature of a residential use, the services they are provided in conjunction with the rental is more in the nature of a commercial enterprise. Therefore, Short-Term Rental Property use is more like the rental of a hotel or motel rental, rather than the a long-term lease of property. Additionally, although there are always exceptions, occupants of Short-Term Rental Properties use the properties for reasons that are different from the uses that occupants of long- term rentals or permanent residents put their properties. As a result of the differences between the uses to which occupants of Short-Term Rental Property and permanent residents put their property, conflicts arise where the two land uses exist side by side. Although Short-Term Rental Properties have been a part of Monroe County for many years, there has been an increase in the number of properties available for use as Short-Term Rental Property in areas which have also increasingly been used as neighborhoods for permanent residents during the past ten years. As a result, the conflicts between occupants of Short-Term Rental Properties and permanent residents have increased. Denise Werling testified as to the types of conflicts she has experienced with a Short-Term Rental Property located next door to her home. Ms. Werling's testimony was illustrative of the types of conflicts which can exist if Short-Term Rental Properties are allowed to exist in areas designated for purely residential uses. The following are the types of problems which are not uncommonly associated with the use of properties as Short-Term Rental Property in residential areas: Short-Term Rental Property may be occupied with excessive numbers of tenants. Occupants of Short-Term Rental Property usually do not have to work because they are on vacation. As a consequence, they usually want to maximize the time they spend enjoying their vacation. As a result, they may stay up later at night and/or get up earlier in the morning than permanent residents. Late- night parties are not limited to weekends. Occupants often have excessive numbers of vehicles, boats, jet skies, RV's, and boat trailers, which they park on residential streets or all over the Short-Term Rental Property. RV's are parked in the driveway, yard, or the street in front of the rental property. When occupied, these RV's can be noisy if they are powered by self-contained generators. Multiple boats may be docked along seawalls behind Short-Term Rental Properties. Ms. Werling has seen as many as six boats parked at one time against the seawall of the Short- Term Rental Property located next to her residence. Occupants of Short-Term Rental Property are unfamiliar with garbage and recycling schedules. As a result, full trash containers and recycle containers, if they are used, are left outside when the occupants leave, even though it may be several days before pickup is scheduled. Pets that are unfamiliar to the neighborhood are left to roam free. Ms. Werling has had dogs from the property next to hers on her property. Occupants of Short-Term Rental Property are strangers to the neighborhood. As a result, they can create a sense on uneasiness to permanent residents. This sense of uneasiness is not only a result of concern for the safety of the permanent residents and their families, but is also caused by the fact that occupants of Short-Term Rental Properties are less likely to adhere to accepted neighborhood practices. They may leave outdoor security lights on all the time. They are less concerned about trespassing onto seawalls and yards of the permanent residents. They are only in the area for a relatively short period of time and, consequently, they are likely to be less considerate of the neighboring permanent residents. Short-Term Rental Property occupants are often less familiar with the waters that surround their Short-Term Rental Property. As a result, they tend to run aground, causing damage to seagrass beds. While they could cause such damage elsewhere if they were staying at a hotel or motel, they at least have hotel and motel personnel that are familiar with the surrounding waters that they can consult before venturing out. Such information is not as readily available at Short-Term Rental Properties. 86 Most of the difficulties associated with Short-Term Rental Properties are not limited to occupants of Short-Term Rental Properties. Many are also caused by some permanent residents. Just as there are some Short-Term Rental Property occupants that are inconsiderate to permanent residents, there are permanent residents that are inconsiderate to their neighbors. The degree to which the problems are caused is much higher, however, for occupants of Short-Term Rental Properties than it is for permanent residents. Additionally, it is more likely that permanent residents that cause problems can be effectively dealt with through the enforcement of regulations than occupants of Short- Term Rental Property. Finally, some of the problems are only associated with occupants of Short-Term Rental Properties. Efforts to enforce regulations intended to deal with the problems associated with inconsiderate neighbors, such as anti-noise ordinances, have not been successful in eliminating the problems associated with Short-Term Rental Property. Short- Term Rental Property occupants have less reason to be concerned about regulations because they know they will be leaving the community in a short time. Whether they get along with their "neighbors" is not something they are concerned with. Ms. Werling has reported the problems she has experienced with the Short-Term Rental Property located next door to her. The problems, however, persist. Efforts of managers of Short-Term Rental Properties have not eliminated the difficulties associated with Short-Term Rental Property for the same reason that regulations are not effective and because not all owners of Short-Term Rental Property use local managers. Some absentee owners rent the properties themselves and they are not available to handle complaints as they arise. The County, in adopting the Ordinance, was exercising its police power to eliminate the incompatible use of Short-Term Rental Properties in districts intended for use as residential communities. In exercising its police power, the County prohibited Short-Term Rental Property in the most sensitive residential areas and placed restrictions intended to reduce the impacts of Short-Term Rental Properties in areas where Short-Term Rental Properties are allowed under the Ordinance. The County also restricted Short-Term Rental Properties in districts intended to protect the sensitive natural resources of the Florida Keys ACSC. Petitioners' have suggested that, while additional regulation of Short-Term Rental Property may be appropriate and beneficial, to prohibit Short-Term Rental Property in IS districts, given the negative economic impact of such a prohibition, would be detrimental to the overall welfare of Monroe County. Therefore, Petitioners have argued that the Ordinance is not consistent with Principle "l." Petitioners' suggestion does not support a finding that the Ordinance is not consistent with Principle (l), however. Petitioners' suggestion relates to the issue of the balancing of all the Principles, discussed infra. The County's Ability to Manage Land Use and Development. Section 380.0552(7)(a), Florida Statutes, includes the following principle: "To strengthen local government capabilities for managing land use and development so that local government is able to achieve these objectives without the continuation of the area of critical state concern designation." Short-Term Rental Properties have existed throughout the Florida Keys for many years. Many owners of Short-Term Rental Property have obtained an occupational license for their rental business. Prior to the adoption of the Ordinance, the County Attorney and the Monroe County Code Enforcement Board, began to question whether the use of property as Short-Term Rental Property was an allowable land use in certain land districts in Monroe County under existing laws. The fact that some owners of Short-Term Rental Properties obtained occupational licenses from the Monroe County Tax Collector and licenses pursuant to Chapter 509, Florida Statutes, from the Department of Business and Professional Regulation does not, as Petitioners have argued, support a finding that the use of Short-Term Rental Properties have been an allowable use. An occupational license is, in essence, a method of collecting a tax pursuant to Chapter 205, Florida Statutes, for the operation of a business in a local jurisdiction. The issuance of such a license is not in the nature of a land use decision. Although there was a requirement in the County prior to the adoption of the Ordinance that occupational licenses issued by the Tax Collector be reviewed by the County for consistency with land use requirements, the evidence failed to support a finding that licenses were actually reviewed. Even if they had been, the evidence in this case only proved that the County simply did not give any consideration to whether existing comprehensive plans and land development regulations allow or prohibit the use of property as Short-Term Rental Property in all land use districts of Monroe County. Licenses from the Department of Business and Professional Regulation also do not constitute land use decisions. By taking the actions necessary to consider the problem of Short-Term Rental Properties and in adopting the Ordinance, the County has evidenced the willingness to take responsibility for the issue of whether the use of property for Short-Term Rental Property is allowable, and, if so, in which districts. By adopting the Ordinance, the County has resolved any ambiguity concerning the legality of Short-Term Rental Property. Even if it were clear that the use of Short-Term Rental Property has been allowable throughout Monroe County, the County has still taken steps to strengthen its capability for managing land use and development. The County took on a highly controversial issue, with vocal proponents and opponents, and made a decision as to the future direction of neighborhoods in Monroe County. In so doing, the County also took the actions necessary to actually "manage" Short-Term Rental Properties. The Environmental Issues. 100. Sections 380.0552(7)(b), (c), (e), (f), and (i), Florida Statutes, are Principles which require a consideration of the impacts on the environment of the Florida Keys: Principle "b": "To protect shoreline and marine resources, including mangroves, coral reef formations, seagrass beds, wetlands, fish and wildlife, and their habitat." Principle "c": "To protect upland resources, tropical biological communities, freshwater wetlands, native tropical vegetation (for example, hardwood hammocks and pinelands), dune ridges and beaches, wildlife, and their habitat." Principle "e": "To limit the adverse impacts of development on the quality of water throughout the Florida Keys." Principle "f": "To enhance natural scenic resources, promote the aesthetic benefits of the natural environment, and ensure that development is compatible with the unique historic character of the Florida Keys." Principle "i": "To limit the adverse impacts of public investments on the environmental resources of the Florida Keys." (This Principle could also be grouped with Section 380.0552(7)(h), Florida Statutes). These Principles are consistent with the legislative intent set out in Section 380.0552(2)(a), Florida Statutes, that a local government establish a land use management system that protects the natural environment of the Florida Keys. Part I of Chapter 380, Florida Statutes, is titled "The Florida Environmental Land and Water Management Act of 1972." Section 380.012, Florida Statutes. The legislative purpose for establishing Part I and designating areas of critical state concern was primarily to provide State protection from adverse development impacts on environmentally sensitive areas of the State: Big Cypress Swamp, Green Swamp, Apalachicola Bay, and Monroe County's Florida Keys. All of these areas include environmentally sensitive lands and water bodies. The Ordinance does not specifically deal with environmental issues. The Ordinance involves primarily a balancing of a local government's police power with the economic impact of the exercise of that power. The Ordinance does, however, have some small positive impacts on the environment of Monroe County. Most importantly, the Ordinance does nothing contrary to the legislative intent to protect the Florida Keys ACSC. Monroe County's economic viability depends on the preservation and protection of its natural resources, including the quality of its surrounding waters. Tourism, which is the largest industry in Monroe County, is dependent on Monroe County's natural resources. The tourists who come to Monroe County are, in large part, attracted to Monroe County by its environmental qualities. Unfortunately, tourists are generally the worst abusers of the natural environment of Monroe County. This is true whether a tourist is staying in a motel or a Short-Term Rental Property. Tourists have more free time and, as a consequence, tend to participate in the recreational activities available in Monroe County more frequently and intensely than permanent residents. They simply use the resources more than a permanent resident. For example, in addition to spending more time on the water during good weather, tourists tend to engage in water activities even during inclement weather. Unlike a permanent resident who can wait until the next clear weekend, a vacationer will not necessarily be in Monroe County when the weather clears and therefore, is likely to be on the water at every opportunity. Tourists use the resources of the Florida Keys ACSC throughout their vacation. Unlike permanent residents, who are limited primarily to enjoying the natural environment of the Florida Keys ACSC on weekends and holidays, tourists are free to enjoy the environment everyday they are in Monroe County. In addition to the more frequent and intense use of the resources of Monroe County, tourists also cause harm to the environment because of their lack of knowledge about the Florida Keys ACSC or because they simply don't care. Monroe County's nearshore waters consist of numerous unmarked channels that leave many areas of Monroe County, including many canals of IS Districts. The unmarked channels can be difficult to navigate because of shallow waters typical of the Florida Keys. Navigation through these channels is learned largely from experience. The shallow nearshore waters contain beds of seagrasses that provide an important part of the ecosystem of the Florida Keys. They support juvenile fish and shellfish, which in turn provide feeding stock for birds and larger fish species. Grounding on these seagrass beds causes propeller scaring damage to the seagrasses. Tourists are also not familiar or do not care about limits on the numbers of fish and other marine life that can be caught, the sensitively of coral reefs and other natural resources of the Florida Keys ACSC, or the need to minimize human contact with the Key Deer. As a result, tourist tend to create more harm to most of the environmental features of the Florida Keys ACSC. Tourists that stay in Short-Term Rental Properties located in IS Districts and other land use districts are not significantly different from tourists that stay in other transient rentals available in Monroe County such as hotels or motels in terms of their impacts on the environment. The adverse impacts on the environment from tourists described, supra, are caused by tourists regardless of where they may be staying. Tourists that stay in Short-Term Rental Properties, however, do cause slightly more harm to the environment than other tourists for several reasons. First, a large number of tourists bring their own boats and ski jets with them to Monroe County. Those who stay in Short-Term Rental Properties generally do not operate or store their boats out of commercial marinas or use public boat ramps. As a consequence, it is more difficult to educate them about the adverse impacts they may cause on the environment. Marinas and other commercial locations where boats may be docked provide greater information about the waters of the Florida Keys and are more likely to have adequately marked access channels than Short- Term Rental Properties. Marinas, hotels, and motels also have knowledgeable individuals available to answer questions concerning the surrounding waters, a service not available to Short-Term Rental Property occupants. Prohibiting Short-Term Rental Properties in IS Districts will reduce the number of inexperienced boaters using the numerous canals of IS Districts to access the waters of Monroe County. Secondly, tourists that occupy Short-Term Rental Properties are more likely to cause harm to the Key Deer and other sensitive natural resources due to the proximity of their Short-Term Rental Property to the Key Deer and other resources. Key Deer inhabit the Florida Keys primarily on Big Pine Key. The Key Deer is an endangered species. Properties located on Big Pine Key and in other areas where Key Deer are found are used for Short-Term Vacation Rental Properties. Adverse impacts on the Key Deer result from their interaction with humans, through feeding, automobile deaths, and dogs that chase the Key Deer. While all tourists have impacts on the Key Deer due to their interaction with the them, the location of Short-Term Rental Property within the Key Deer habitat, especially areas located away from the main highway corridor of the Florida Keys, U.S. Highway 1, increases the amount of interaction between those tourists who occupy those Short-Term Rental Properties and the Key Deer. Tourists staying in IS Districts on Big Pine Key, especially those in Port Pine Heights at the north end of the Key, feed the Deer more because they are there more often, and cause more traffic problems because of the drive required to get to their rental property. Principle "e" requires that land development regulations limit the adverse impacts of development on water quality. There are public health concerns associated with untreated or improperly treated sewage, including viruses, bacteria, and parasites. Throughout most of the Florida Keys ACSC, septic tanks are used to dispose of sewage. Many of the septic tanks were installed years ago and do not meet today's standards for septic tanks. The size of a septic tank that must be installed depends on what the property will be used for. For single family residences, it is assumed that 100 gallons per day of sewage will be disposed of. Hotels are also assumed to create the same amount per room, while resorts, camps, and cottages are assumed to produce 200 gallons per day. Establishments with self-service laundries are assumed to produce 750 gallons per day. The use of Short-Term Rental Properties is somewhere between the use of single-family residence, hotels, resorts, and establishments with self-service laundries because of the similarity in how tourists in Short-Term Rental Properties and occupants of other transient locations live. Additionally, Short-Term Rental Properties are often occupied with more persons than would normally be found in a single-family residence. Although some septic tanks are designed with even more capacity than may be required by rules, not all septic tanks are designed to handle the increased use that occupants of Short-Term Rental Properties can cause. As a consequence, there is at least the potential for adverse consequences to the water of the Florida Keys ACSC to the extent that Short-Term Rental Properties are not better regulated by the County. Through the Ordinance, the County is attempting to ensure that the potential harm from the over use of septic tanks in Monroe County is regulated. The Ordinance limits the number of occupants of Short-Term Rental Properties. The Ordinance also requires that applicants for vacation rental permits submit a report from the Department of Health verifying compliance with existing septic tank or on-site sewage disposal system regulations. The Ordinance has no direct impact on Principle (i) and some parts of the other environmental Principles. The Ordinance is not, however, inconsistent with any of the Principles which deal with the environment. Community Character and Historical Heritage of the Florida Keys. Section 380.0552(7)(f), Florida Statutes, provides for a consideration of the "community character" of the Florida Keys, in addition to environmental considerations. This principle is consistent with the legislative intent set out in Section 380.0552(2)(b), Florida Statutes, that a local government establish a land use management system that promotes the community character of the Florida Keys. Section 380.0552(7)(g), Florida Statutes, includes the following Principle: "To protect the historical heritage of the Florida Keys." Although the evidence proved that the vacation rental of single-family residences has been a part of the character and historical heritage of the Florida Keys for many years, the problem being dealt with by the County through the Ordinance has not. The Ordinance does nothing to harm the community character or historical heritage of Monroe County. Public Investments. Section 380.0552(7)(h), Florida Statutes, requires that "the value, efficiency, cost-effectiveness, and amortized life of existing and proposed major public investments be protected, including the following investments: The Florida Keys Aqueduct and water supply facilities; Sewage collection and disposal facilities; Solid waste collection and disposal facilities; Key West Naval Air Station and other military facilities; Transportation facilities; Federal parks, wildlife refuges, and marine sanctuaries; State parks, recreation facilities, aquatic preserves, and other publicly owned properties; City electric service and the Florida Keys Electric Co-op; and Other utilities, as appropriate. This principle is consistent with the legislative intent set out in Section 380.0552(2)(c), Florida Statutes, that a local government establish a land use management system that promotes orderly and balanced growth in accordance with the capacity of available and planned public facilities and services. The evidence in this case failed to prove that the Ordinance has any impact, positive or negative, on "existing and proposed major public investments " Affordable Housing. Section 380.0552(7)(j), Florida Statutes, provides the following Principle: "To make available adequate affordable housing for all sectors of the population of the Florida Keys." This Principle is consistent with the legislative intent set out in Section 380.0552(2)(d), Florida Statutes, that a local government provide affordable housing in close proximity to places of employment in the Florida Keys. There is a significant problem finding housing in Monroe County. It is especially difficult finding housing affordable to lower income residents. The shortage of housing has been caused by the lack of available developable land and restrictions on development, including those imposed by the Rate of Growth Ordinance (hereinafter referred to as "ROGO"). ROGO limits the number of new permanent residential units which may be constructed in the Florida Keys to 255 per year. Because of the restrictions on available new housing in Monroe County, prices for residential property have increased over the years. Currently, most 2 to 3 bedroom properties used as Short-Term Rental Properties are selling for $200,000.00 to $300,000.00. These properties do not come under the definition of "affordable housing" for lower income residents. "Affordable housing" is defined in terms of housing which can be afforded by very-low income, low-income, and moderate-income persons. Homes that costs over $200,000.00 do not constitute "affordable housing" as defined in the County's Land Development Regulations. The market for homes selling for over $200,000.00 in Monroe County is not high. Therefore, to the extent that properties located in IS Districts that are currently used as Short-Term Rental Properties are placed on the market, there will not be a direct increase in housing for very-low income, low- income, or moderate-income persons. Many of the Short-Term Rental Properties in Monroe County are second homes that are used only part of the year by the owners and are used as Short-Term Rental Properties the rest of the year. Some Short-Term Rental Properties are properties that have been purchased for investment purposes and/or with the intent of using the properties as the owners' permanent residence upon retirement. As a result, these properties are not available for use by permanent residents. Regardless of their costs, with a limited number of new residential properties allowed under ROGO, the use of new properties as Short-Term Rental Properties necessarily reduces the overall availability of housing in Monroe County. The restriction caused in the overall housing market in Monroe County can reasonably be expected to also negatively impact the availability of affordable housing. Potential revenues to property owners from Short-Term Rental Properties in IS Districts are higher then the potential revenues from long-term rentals to permanent residents. Consequently, as more property owners in IS Districts are attracted to using their properties as Short-Term Rental Properties, there is a reduction in the amount of housing available for long-term rentals. Therefore, the use of properties in IS Districts as Short-Term Rental Properties decreases the supply of long-term rentals available for residents of Monroe County. By prohibiting the use of properties in IS Districts as Short-Term Rental Properties, the total properties in Monroe County available for housing, including for long-term rentals, for permanent residents, will increase. As supply increases demand for all housing, including an affordable housing to some small extent, will be better met. There is a demand for long-term rentals in Monroe County. Two to three bedroom homes located in IS Districts can easily be rented for $1,000.00 to $1,500.00 per month. Some segment of the permanent population of Monroe County could afford such rentals if they were available, freeing up less expensive housing. Additionally, some absentee owners are able to purchase more expensive property because of their ability to rent the property as Short-Term Rental Property and apply the rental income to meet a higher mortgage payment. As a result, the real estate market in Monroe County builds more expensive homes to meet the demand. To the extent that this market for higher priced homes is reduced by the Ordinance, the allocation of ROGO residential units may be used for less expensive housing. The overall impact on the increase in available housing for permanent residents of Monroe County as a result of prohibiting Short-Term Rental Properties in IS Districts will generally "trickle" down throughout the entire housing market and benefit the availability of affordable housing. Natural or Manmade Disaster and Post-Disaster Relief. Section 380.0552(7)(k), Florida Statutes, provides the following Principle: "To provide adequate alternatives for the protection of public safety and welfare in the event of a natural or manmade disaster and for a postdisaster reconstruction plan." Hurricane evacuation in Monroe County is a difficult problem because of the low elevations in the Florida Keys and the lack of evacuation routes. Through most of the Florida Keys, there is only one evacuation road: U.S. Highway 1. The County has adopted, and put in place, hurricane evacuation plans for Monroe County. Estimated hurricane evacuation times for Monroe County determine the extent to which growth can be allowed in the future. The estimated hurricane evacuation time for Monroe County is determined by a ROGO hurricane evacuation model. The model takes into account seasonal residents, hotel/motel residents, transient rental occupants, and permanent residents. Petitioners presented evidence in an effort to show that the reduction in Short-Term Rental Properties will cause the calculation under the ROGO hurricane evacuation model to be inaccurate. The evidence failed to support such a finding. The evidence failed to prove how occupants of Short- Term Rental Properties are treated for purposes of the hurricane evacuation model. Testimony that they are included as seasonal occupants was not credible. Even if occupants of Short-Term Rental Properties are considered seasonal occupants for hurricane evacuation purposes, it does not necessarily mean that the Ordinance is inconsistent with Principle "k." It would only mean that the results of the hurricane evacuation model need to be revised. Rather than hampering hurricane evacuation efforts in Monroe County, the Ordinance should have a beneficial impact by giving the County more accurate information about the actual number of Short-Term Rental Properties in Monroe County. Consideration of the Principles as a Whole. Section 380.0552(7), Florida Statues, specifically provides that the Principles are to be "construed as a whole and no specific provision shall be construed or applied in isolation from the other provisions." The evidence in this case supports a conclusion that the Ordinance has no or little impact on most of the Principles, except Principles "d" and "l." To the extent that there is any impact on the other Principles, the evidence proved that the Ordinance is consistent. This finding, however, is not dispositive of this case. Ultimately, the question of whether the Ordinance is consistent with the Principles is dependent upon an evaluation of the consistency of the Ordinance with Principles "d" and "l." Clearly, the Ordinance will have a short-term negative impact on the economy of Monroe County. Just as clearly, the Ordinance will enhance the safety, health, and welfare of the residents of Monroe County. When the legislative intent of Chapter 380, Florida Statutes, is taken into account, it is clear that this is not the type of land use decision the State is most concerned with. Because the Ordinance does essentially no harm to the natural environment and waters of the Florida Keys ACSC, the State's interest in the Florida Keys ACSC is protected. The issue is essentially a local one. Consequently, some deference should be afforded the County to make this difficult choice. Given the purpose of the Department's involvement in this matter, the legislative intent of Chapter 380, Florida Statutes, the County's effort in considering the issues, and the evidence presented in this proceeding, it is concluded that the County's effort to protect the public safety, health, and welfare is sufficient to overcome any harm to the economy. Therefore, the Ordinance is consistent with the Principles, considered as a whole.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Community Affairs enter a Final Order approving Monroe County Ordinance 004-1997 as consistent with the Principles for Guiding Development of Section 380.0552(7), Florida Statutes. DONE AND ENTERED this 30th day of September, 1998, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 30th day of September, 1998. COPIES FURNISHED: Kelly B. Plante, Esquire Kenneth J. Plante, Esquire Wilbur E. Brewton, Esquire Gray, Harris and Robinson, P.A. 225 South Adams, Suite 250 Tallahassee, Florida 32301 Jeffrey Bell, Esquire Herzfeld & Rubin 5310 North West 33rd Avenue, Suite 102 Ft. Lauderdale, Florida 33309 Kathleen R. Fowler, Assistant General Counsel Sherry Spiers, Assistant General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Ralf G. Brookes, Esquire Hugh J. Morgan, Esquire Karen K. Cabanas, Esquire Morgan & Brookes 317 Whitehead Street Key West, Florida 33040 James T. Hendrick Monroe County Attorney 310 Fleming Street Key West, Florida 33040 James F. Murley, Secretary Department of Community Affairs Suite 100 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100 Stephanie Gehres Kruer, General Counsel Department of Community Affairs Suite 325-A 2555 Shummard Oak Boulevard Tallahassee, Florida 32399-2100
The Issue The issues are as follows: (a) whether Respondent is guilty of culpable negligence or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes; (b) whether Respondent is guilty of failure to maintain trust funds in any business transaction in violation of Section 475.25(1)(k), Florida Statutes; and (c) what penalty, if any, should be imposed on Respondent.
Findings Of Fact Petitioner is charged with regulating and enforcing the statutory provisions pertaining to persons holding real estate broker and salesperson licenses in Florida. Respondent is and was, at all times material to this case, a licensed real estate broker, having been issued license No. 0372849. Respondent's license is currently voluntarily inactive because she did not renew it. At all times material here, Petitioner was an agent and the broker of record for Park Avenue Properties, Inc. In December 1995, Respondent, as agent for Park Avenue Properties, Inc., entered into an agreement with Elizabeth Field (Miss Field) to rent and manage rental property located at 1709 Hall Drive, Tallahassee, Florida (the property). Mrs. Paula Field owned the property but authorized her daughter, Miss Field, to enter into the management agreement with Respondent. The management agreement states as follows in pertinent part: Owner Agrees: to give the Agent the following authority and agrees to assume all expenses connected with: to advertise the property, display a sign on it, and rent it; to investigate the references of prospective tenants; to sign leases for terms of no less than 12 months; to renew or cancel existing leases and negotiate new leases. * * * to terminate tenancies and sign and serve notices Agent deems necessary and Owner approves; to sue for and recover rent; to instigate eviction procedures. Owner will pay expenses of litigation including attorney's fees, and may select the attorney to handle such litigation. * * * to allow Agent to collect minimum rent of $600 and deposit it to owners account. . . . * * * to allow Agent to collect a security deposit of $600 and first month's rent in advance and deposit them in Agents escrow accounts. Escrow funds accrue no interest for Owner nor Agent and are not accounted for in Owner's monthly statements. * * * 7) to allow the Agent to withhold a commission of 10 percent of all rent due on leases during the management agreement period as compensation for the management services. Pursuant to the management agreement, Respondent facilitated Donnda T. Williams' application to rent the property. The application states that, upon its acceptance, it would become a lease agreement beginning on August 22, 1997, and continuing until July 31, 1998. According to the application, rent was payable in advance on the first day of each month in installments of $595 per month. Respondent checked Ms. Williams' references but did not otherwise investigate her credit. Respondent did not perform a public records search to determine whether Ms. Williams was the subject of prior eviction proceedings or whether she had civil judgments against her. Respondent subsequently accepted the application, which became a lease agreement. Ms. Williams was late in paying the rent in September through December 1997. Respondent had to "really chase" Ms. Williams to get the rent in November 1997 because the rent check bounced when Respondent deposited it the first time. Respondent's efforts to collect the November 1997 rent included contacting Ms. Williams' mother. At that time, Respondent learned about Ms. Williams' prior eviction in Leon County and prior civil judgments as described below. Respondent's father became seriously ill in January 1998. Respondent flew to the State of Washington to nurse her father and was out of the State of Florida for most of January, February, and March of 1998. During her father's illness, Respondent made several short trips back to her home in Tallahassee, Florida. After the death of Respondent's father, she returned to Tallahassee, Florida, in April 1998. Ms. Williams did not pay her January 1998 rent until late February 1998. Respondent did not receive any additional rent payments from Ms. Williams. On March 9, 1998, Respondent sent Ms. Williams a three-day notice demanding the payment of rent. The notice stated that Ms. Williams owed $1,190 in rent for February and March 1998. There is no evidence that Respondent sent Ms. Williams any other such notices. Sometime after March 9, 1998, Harper Field, Esquire, informed Respondent that he was going to try to collect the rent for his wife, Mrs. Field. Because he was unable to collect the April 1998 rent, Mr. Field sent Ms. Williams a second three-day notice demanding payment of rent. Mr. Field insisted that Respondent begin eviction proceedings against Ms. Williams in May 1998. In fact, Mr. Field "begged" Respondent to initiate these proceedings on his wife's behalf. Any evidence that Ms. Field requested Respondent to begin eviction proceedings in January or February 1998 is hearsay and in direct conflict with Respondent's testimony, which is credited in this regard. Respondent initiated an eviction proceeding against Ms. Williams on May 4, 1998. In a letter dated June 2, 1998, from Respondent to the circuit judge, Respondent stated as follows: (a) Ms. Williams had not paid any rent since paying the January 1998 rent in February 1998; (b) Ms. Williams was five months behind in paying her rent; (c) Ms. Williams was still living at the property; and (d) Ms. Williams has a prior eviction in Leon County, Florida, and had a judgment against her for not paying for her furniture. Respondent sent a copy of the letter to Mr. Field, informing him for the first time about Ms. Williams' prior eviction and about the civil judgments against her. The record indicates that First Union Bank secured a Final Judgment and Execution against Ms. Williams in May 1995. W.S. Badcock Corporation secured a Writ of Replevin and Possession against Ms. Williams in October 1996. In a third case, Charles Culp secured a Final Judgment for Eviction and a Writ of Possession against Ms. Williams in April 1997. There is persuasive evidence that Respondent became aware of these cases against Ms. William when Respondent contacted Ms. Williams' mother in November 1998. Ms. Williams vacated the property owing six months of rent for the months of February through July 1998 before Respondent's eviction proceeding against Ms. Williams was concluded. Ms. Williams "trashed" the property before she vacated it causing Mrs. Fields to incur out-of-pocket expenses for damages not covered by insurance. The record is not clear how Respondent's eviction case against Ms. Williams was finally resolved. However, the Administrative Complaint does not allege that Respondent was negligent in prosecuting the case. Mr. Fields subsequently filed a complaint with Petitioner alleging that Respondent had mismanaged the property. During the investigation of the complaint, Respondent furnished Petitioner with requested documentation regarding the entire Williams/Field transaction for the months of February through April 1998. The documentation included monthly statement reconciliations for Respondent's rental escrow account and her operating account, bank statements for these accounts, and copies of supporting checks, deposits slips, and transfers. Respondent's monthly statement reconciliations for her rental escrow account from February through April 1998 revealed negative balances. The monthly statement reconciliations are a more accurate reflection of the transactions that occurred in the account than a corresponding bank statement. Respondent transferred $1,000 from her rental escrow account to her operating account on February 10, 1998. Respondent's February and April bank statements for her rental escrow account and her operating account did not reflect negative balances. Respondent's March 1998 bank statement for the rental escrow account had two overdrafts, one on March 19 and another one on March 20. She transferred $1,000 on March 2, 1998, and $8,000 on March 16, 1998, from her rental escrow account to her operating account. The $8,000 transfer resulted in a negative balance on Respondent's monthly statement reconciliation for her rental escrow account. Respondent made the transfers referenced above because she was in the State of Washington nursing her father when she was required to make disbursements from the rental escrow account. She claims that she went to see her father after receiving an emergency call that her father was gravely ill and that she grabbed her operating account checkbook to take with her. She did not have the rental escrow account checkbook with her so she transferred the money to her operating account and wrote the necessary disbursement checks from her operating account. Respondent flew home to Florida from the State of Washington for a few days in January 1998, and at the end of February and March 1998, before making her final trip home to Florida in April 1998. She did not explain why she did not pick up her rental escrow account checkbook on one of these trips so that she would not have to continue to disburse money from her operating account that should have been disbursed from her rental escrow account. More importantly, Respondent did not explain why her monthly statement reconciliations had negative balances. Respondent did not inform her clients that she was paying them from her operating account. The clients never noticed that Respondent paid them from the wrong account. All of the clients received the correct disbursements. Even so, Respondent knew she was not allowed to commingle funds in the two accounts and that she was required to keep all rental escrow funds in a separate account until disbursement was properly authorized. The instant case is not the only time that Respondent has been the subject of a disciplinary proceeding. She admitted during the hearing that Petitioner previously had cited her and "smacked her on the wrist" for not disbursing funds in a timely fashion.
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
