FREC Case Study

The Florida Real Estate Commission is charged with protecting Florida consumers from unscrupulous licensees, and takes its duties very seriously. DBPR Press Secretary Kristen A. Ploska reports that during the 12 months ending April 30, 2005, DBPR issued 84 citations to brokers and sales associates. The DBPR collected fines from 287 licensees during the period. The Florida Real Estate Commission reprimanded 41 licensees and placed 165 on probation. Overall, including license suspensions and revocations, 948 professionals were disciplined.

In many of our courses at The Real Estate School, Inc., we illustrate the strong enforcement of Florida law by using case studies. This month's case study describes a sales associate whose “creative ad” attracted buyers but also created legal problems.

Facts: A young couple saw an ad for homes in “Green Valley.” The ad said, “Move in with only $100” and noted that the closing costs would be paid by the seller. As instructed in the ad, the potential buyers called Robert, a licensed sales associate, only to learn that a $1,000 deposit was required, but $900 would be returned when the contract closed. Robert assured the couple that Emory Loans, Inc. would finance their mortgage. The buyers later learned there was an income cap on loans from Emory, yet Robert said there would be no problems in getting a mortgage through the company. As it turned out, Emory Loans rejected the couple's mortgage financing request and they had to turn elsewhere for funding. Just before the scheduled closing date, the couple found out they would not receive the $900 refund Robert had promised because there were higher costs associated with the new lender. In spite of the financing problems, the buyers said they would sign the closing contract if a special air conditioning unit was placed in the home. Robert agreed to the terms, but after the buyers moved into their new home, the wrong air conditioning unit was installed. When the couple complained to Robert, the unit was removed but it was not replaced.

Determination of Violation: A recommended order was prepared by an administrative law judge and sent to the Florida Real Estate Commission (FREC). The judge found that sales associate Robert violated Sections 475.25(1)(b) and (c), Florida Statutes. These statutes cover false and deceptive advertising, concealment and dishonest practices in business transactions

Penalty: In accordance with the administrative law judge's order, the FREC imposed a fine of $2,000 and required Robert to take a 45-hour sales associate post-licensing course.
“We believe licensees can learn by reading about real-world situations where licensees violated the law,” said Real Estate School President Edward O'Donnell, “and we will continue to feature helpful case studies in future newsletters.”