Florida Real Estate Brokers Guide Sixth Edition Linda
Florida Real Estate Broker’s Guide, Sixth Edition Linda L. Crawford Edward J. O’Donnell Copyright © 2017 Kaplan, Inc. All rights reserved.
Unit 5 Office Inspections, Disciplinary Process, and Real Estate Recovery Fund
Office Inspections and Audits • • • Minimum office requirements Office entrance sign Licenses Brokerage relationship disclosures Escrow account audit – Reconciliation statements – Broker’s trust liability 3 © 2017 Kaplan, Inc.
The Complaint Process 1. 2. 3. 4. A complaint is filed with DBPR Investigation of the complaint Probable-cause determination Formal complaint issued if probable cause is found 5. Informal or formal hearing conducted 6. Final order issued 7. Judicial review (appeal) 4 © 2017 Kaplan, Inc.
Step 1: Filing the Complaint • Complaint – An alleged violation of law or rule – Must be in writing • Uniform Complaint Form - DBPR – Legally sufficient if a violation of • Florida statute • DBPR rule • FREC rule © 2017 Kaplan, Inc. 5
Anonymous Complaints • DBPR may investigate anonymous complaints or one made by a confidential informant if – The complaint is in writing and legally sufficient – Alleged violation is substantial – The DBPR has reason to believe the alleged violations are true 6 © 2017 Kaplan, Inc.
Step 2: Investigation • Complainant is person who files the complaint • Copy of complaint sent to the licensee (subject of investigation) • Licensee may submit a written response • Copy sent to appropriate regional investigative office (DBPR) 7 © 2017 Kaplan, Inc.
DBPR Conducts Investigation • Administer oaths and take depositions • Examine respondents, witnesses, and complainants • Issue subpoenas and conduct audits of escrow accounts • DBPR issues an investigative report • Submit report to the probable-cause panel 8 © 2017 Kaplan, Inc.
Emergency Suspension Order • If investigation reveals public is endangered, the DBPR or FREC may decide not to allow licensee to continue to work during the disciplinary process • DBPR Secretary can issue an emergency summary order (ESO) • Promptly followed by formal suspension or revocation proceeding 9 © 2017 Kaplan, Inc.
Step 3: Probable Cause • Probable Cause Panel – 2 FREC members • At least 1 professional member • At least 1 current member – Determination, by majority vote, as to whether probable cause exists • Reasonable grounds for prosecution • “Grand jury” arrangement • Complainant and subject of complaint are sent written notification of outcome • May dismiss the case with a letter of guidance 10 © 2017 Kaplan, Inc.
Step 4: Formal Complaint • Formal (Administrative) Complaint – Probable cause exists • DBPR files a formal complaint • Outline of charges against the respondent (subject) – Licensee is sent an Election of Rights • Not dispute the allegations and request an informal hearing • Dispute the allegations and request a formal hearing • Not dispute the allegations and waive the right to be heard 11 © 2017 Kaplan, Inc.
Settlement Stipulation • Licensee-respondent can meet with a DRE attorney prior to a hearing to discuss a settlement • Stipulation is an agreement as to the facts of the case and the penalty reached • Stipulation must be approved by FREC 12 © 2017 Kaplan, Inc.
Voluntary Relinquishment for Permanent Revocation • Licensee-respondent may choose to avoid a disciplinary hearing and relinquish the license in lieu of discipline • Permanently puts the licensee out of the real estate business 13 © 2017 Kaplan, Inc.
Step 5: Case is Presented in a Hearing • Informal Hearing – No disputed facts – Licensee (respondent) given at least 14 days notice – Licensee presents case to the FREC at a Commission meeting – The FREC (probable cause panel excused) decides the case and imposes the penalty 14 © 2017 Kaplan, Inc.
Formal Hearing • Licensee may request a formal hearing • Formal hearing required if there are disputed facts • Formal hearings conducted under F. S. 120 • Administrative law judge selected by Division of Administrative Hearings (DOAH) • May issue subpoena • Recommended order of findings, conclusions, and 15 recommended penalty © 2017 Kaplan, Inc.
Step 6: Final Order • FREC issues the final order • Final decision as to innocence or guilt and penalty – Probable cause members are excused – FREC considers law judge’s report and recommended order and filed exceptions 16 © 2017 Kaplan, Inc.
Step 7: Judicial Review (Appeal) • 30 days to file appeal • Does not stop enforcement of final order – May request stay of enforcement from appellate court – Court will then issue writ of supersedeas • Stops enforcement pending outcome of the appeal 17 © 2017 Kaplan, Inc.
Violations and Penalties • Three types of penalties for violations of real estate law – Administrative – Civil – Criminal • FREC is limited to issuing administrative penalties – Cannot issue incarceration – Cannot order restitution 18 © 2017 Kaplan, Inc.
Violations and Penalties • Denial of a license application and refusal to recertify a license for renewal – Errors in application process – Failure to pass state exam – More serious causes for denial result in denial of the applicant • Revocation without prejudice – When license is issued by mistake 19 © 2017 Kaplan, Inc.
Administrative Penalties Denial of an application (or refusal to renew) Letter of reprimand Notice of noncompliance Citation Probation Administrative fine – Up to $5, 000 per violation F. S. 455 and F. S. 475 • Suspension (up to 10 years) • Revocation (permanent) 20 • • • © 2017 Kaplan, Inc.
Citation • Issued by DBPR/DRE for minor violations • 30 days to accept/reject alleged violation – No action – case closed – File written objection within 30 days • Penalty – fines $100 to $500 21 © 2017 Kaplan, Inc.
Notice of Noncompliance • Issued for a first-time offense of a minor violation established by rule – Does not result in economic or physical harm to a person – 15 days to take corrective action – Failure to timely comply with the notice of noncompliance results in a citation or other disciplinary proceedings 22 © 2017 Kaplan, Inc.
If Broker’s License is Suspended or Revoked • Sales associates’ and broker associates’ licenses are automatically placed in involuntary inactive status • Sales associates and broker associates may become active again under a new employer 23 © 2017 Kaplan, Inc.
Civil Penalties • Civil penalties enforced by the courts – An unlicensed person performs real estate services – Licensee commits fraud in a transaction – Recover money paid to a licensee – Deny payment of commission 24 © 2017 Kaplan, Inc.
Criminal Penalties • Criminal penalties are issued by criminal courts • Imprisonment and fines (other than administrative fines) obtained in court – DBPR must refer criminal matters to the state attorney general’s office 25 © 2017 Kaplan, Inc.
Third-degree Felony • Misleading statement or false information on a DBPR license application • Unlicensed activity • Theft or reproduction of a license exam • $5, 000 fine per count • Five years jail 26 © 2017 Kaplan, Inc.
First-degree Misdemeanor • Failing to provide accurate and currental information for fee • Penalty is a fine of up to $1, 000 and/or up to one year in jail 27 © 2017 Kaplan, Inc.
Second-degree Misdemeanor • Criminal violation of Chapter 475 is a misdemeanor of the second degree – Fine of not more than $500 – Imprisonment of not more than 60 days 28 © 2017 Kaplan, Inc.
Real Estate Recovery Fund • To compensate for monetary (compensatory) damages as a result of an act committed by a licensee who – Held current, active license when act committed – Was not buyer, seller, landlord, or tenant – Acted solely as licensee in transaction 29 © 2017 Kaplan, Inc.
Real Estate Recovery Fund • Time limit to file a claim – Within two years of violation or discovery of violation – Not more than four years after violation • Monetary limits of claims – $50, 000 per transaction – $150, 000 per licensee when multiple transactions • Mandatory suspension 30 © 2017 Kaplan, Inc.
Claim Resulting From EDO • Broker sued for complying with EDO – FREC authorized to reimburse broker for amount of judgment against broker up to $50, 000 – No disciplinary action against broker – Broker does not have to repay fund – Broker must notify FREC of the court case and diligently defend in court the disputed actions concerning transaction – FREC may reimburse broker reasonable attorney fees and court costs 31 © 2017 Kaplan, Inc.
Individuals Who Cannot Make A Claim • Spouse of offending licensee • Licensee who acted as single agent or transaction broker in subject transaction • Claim filed against licensee who was owner of the property • Claim against a licensee who did not have a valid or current license • Claim against a brokerage entity 32 © 2017 Kaplan, Inc.
The End © 2017 Kaplan, Inc.
- Slides: 33