1. © 2009 by South-Western, Cengage Learning SAMIRLANDER Chapter 6

2. Florida Real Estate: Principles, Practices and License Law Chapter 6 License Law: Violations, Complaints, Penalties and Procedures © 2009 by South-Western, Cengage Learning

3. Key Terms Citation Complaint Formal complaint Legally sufficient Letter of guidance Notice of noncompliance Probable cause Probable cause panel Recommended order Revocation Summary (emergency) suspension

4. © 2009 by South-Western, Cengage Learning Procedures for Disciplining Licensees State laws cover Investigative process Hearing process Laws: Chapter 120, F.S. Chapter 445, F.S. Chapter 475, F.S. Chapter 6IJ2

5. © 2009 by South-Western, Cengage Learning Procedures for Disciplining Licensees DBPR investigates legally sufficient complaints of violations of any state: Rule Regulation Statute Legally sufficient: Legally sufficient: if allegation is true, a rule regulation or statue has been violated

6. © 2009 by South-Western, Cengage Learning Procedures for Disciplining Licensees DRE investigates: Applicant Verifying info Background checks Complaints Perceived violations of state or license laws without complaint

7. © 2009 by South-Western, Cengage Learning The Complaint Process, Procedures and Appeal Complaint: Complaint: allegation of a violation of rule or law Any written complaint is investigated

8. © 2009 by South-Western, Cengage Learning The Complaint Process, Procedures and Appeal Statute of limitation Within 5 years after the act Within 5 years after the act was discovered or should have been discovered Copy of complaint

9. © 2009 by South-Western, Cengage Learning The Complaint Process, Procedures and Appeal Infraction review process Validity: has a state law or rule been broken? If valid DBPR must investigate Depositions Subpoenas Witnesses Documents

10. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal Probable cause panel: Probable cause panel: 2 members of FREC Appointed by committee chair Not open to public probable cause: Panel determines probable cause: reasonable grounds for prosecution

11. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal If no probable cause case is dismissed via Letter of guidance Letter of guidance: suggestion of action to be taken If DPR pursues the matter: Referred to FREC FREC determines if further investigation is necessary Outside legal assistance Private investigators

12. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal Formal Complaint: List of the charges Respondent has 3 choices Request a stipulation Informal Hearing Dispute the allegations Request formal hearing

13. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal Administrative Law Judge presides over formal hearing Recommended order: Case findings Conclusion Recommended penalty

14. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal F ailure to respond to formal complaint Default judgment License revocation Charges accepted Final order of action Charges not accepted Hearing is scheduled

15. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and appeal Informal Hearing Licensee presents case at commission meeting If no agreement – formal hearing

16. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal Formal Hearing Administrative law judge Similar to court hearing Judge drafts recommendation Order is forwarded to DBPR

17. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal FREC issues final order Summary suspension May be ordered by secretary of DBPR

18. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal Written Details charges Includes determination of facts Lists action taken Advises order may be appealed Takes effects 30 days from entry Appeal Process Judicial Review

19. © 2009 by South-Western, Cengage Learning Complaint Process, Procedures and Appeal 1. Complaint submitted to DBPR 2. Investigation / licensee notified 3. Determination of probable cause 4. Drafting of formal complaint 5. Formal or informal hearings 6. Final order 7. Appeal process

20. © 2009 by South-Western, Cengage Learning License Law Violations Material misstatement on application Fraud, dishonesty, or misrepresentation in business transaction Guilty or pleading nolo contendere to a crime of moral turpitude Failing to disclose Failure to maintain office signs

21. © 2009 by South-Western, Cengage Learning License Law Violations Broker’s failure to register branch offices Broker failure to register trade or fictions name Failing to supervise Broker associate Sales associate False or misleading advertising

22. © 2009 by South-Western, Cengage Learning License Law Violations Placing blind advertisements Failing to return escrow property as required by law Failing to timely deposit monies into escrow account Failing to review trust account procedures

23. © 2009 by South-Western, Cengage Learning License Law Violations Failure to provide disclosure forms Single agent relationships Transaction broker relationships Consent for transitions Failure to include: Expiration date Property description Price & terms Fee or commission Principal’s signature in listing agreement Failure to provide copies to principal

24. © 2009 by South-Western, Cengage Learning License Law Violations Listing with automatic renewal clause Payment of commission to an unlicensed person for real estate activity Accepting compensation from anyone other than the broker Employing an associate who is not properly licensed

25. © 2009 by South-Western, Cengage Learning License Law Violations Revocation: permanent removal Suspension: temporary removal Administrative: imposed by FREC Criminal: imposed by law Civil: imposed by law

26. © 2009 by South-Western, Cengage Learning License Law Violations Deny a license Suspend for up to 10 years Revoke Probation Fines: $5,000: Chapter 475 F.S. violations $5,000: Chapter 455 F.S. violations Citation

27. © 2009 by South-Western, Cengage Learning License Law Violations DBPR investigates: Licensees Brokerage businesses Schools Citations: Identifies violation & penalty Blind ads Inappropriate handling of escrow accounts

28. © 2009 by South-Western, Cengage Learning License Law Violations 30 days to respond If accepted, citation acts as final order If disputed, reply in writing Formal hearing may be held Other administrative penalties Notice of noncompliance Probation Education courses

29. © 2009 by South-Western, Cengage Learning License Law Violations Most Chapter 475 Violations are 2 nd degree misdemeanors Fine up to $500 60 days imprisonment Fines determined by the court 1 st degree misdemeanors Fine up to $5,000 1 Year imprisonment

30. © 2009 by South-Western, Cengage Learning License Law Violations 3 rd degree misdemeanors Acting without a valid, active license as: Broker Broker associate Sales associate

31. © 2009 by South-Western, Cengage Learning License Law Violations Penalties: $5,000 per offense and/or up to 5 years in jail Cease and desist order and fines up to $5,000 per count Criminal case by the state district attorney

32. © 2009 by South-Western, Cengage Learning License Law Violations Imposed by the court for acting without a real estate license Deny rights to compensation

33. © 2009 by South-Western, Cengage Learning License Law Violations Reimburses the public for monetary losses when a licensee violates the license law

34. © 2009 by South-Western, Cengage Learning License Law Violations To recover from the fund: Judgment is issued by the court File for a writ of execution Assets are liquidated If all damages are not recovered – collect from fund Action must be brought within 2 years

35. © 2009 by South-Western, Cengage Learning License Law Violations If payment is made from the fund: License automatically suspended Disciplinary action To restore license: Repay full amount plus interest

36. © 2009 by South-Western, Cengage Learning License Law Violations Exception to penalties: Acting as directed by FREC in accordance with EDO No repayment of fund No disciplinary action

37. © 2009 by South-Western, Cengage Learning License Law Violations Limits of the funds: Per licensee: $150,000 Per transaction: $50,000 Minimum balance: $500,000 If balance is below $500,000 Fee for initial and renewal of license If balance is above $1,000,000 Fee discontinued

38. © 2009 by South-Western, Cengage Learning License Law Violations Ineligible to collect: Licensee recovering damages from a transaction acting as a licensee Spouse of offending licensee Individual acting without a valid license at time of offense & loss Licensee who committed acts on inactive status Corporation, branch office, or partnership