by Fred Seely
Special to the Daily Record
Florida’s real estate police don’t overlook the little things. So, if you simply assume you know the rules of the state’s licensing road, you might find your name in a very unpopular place:
The Florida Real Estate Commission’s disciplinary report.
It doesn’t take a major case of fraud to get in trouble with FREC, the state commission that oversees real estate licenses.
“We spend a considerable amount of time dealing with what you might call ‘minor’ violations,” says Division of Real Estate Executive Director Tom O’Brien. “Every complaint gets the same treatment, whether it’s a mistake in advertising or a case of a major fraud.”
Did you ignore the continuing education requirement? That gets your name published and the frequent penalty is a $500 fine, six month’s probation and your attendance at two of FREC’s two-day meetings.
Did you help an unlicensed friend do real estate business? Looking over past discipline reports, that’s likely to bring a $2,000 fine, 12 month’s suspension, 12 month’s probation and two trips to Orlando for a FREC meeting.
Didn’t get your renewal done in time, and you still were out selling homes? That’s a $500 fine, a 90-day suspension, six month probation and a trip to Orlando.
Doing some of your broker’s work even though you only hold an associate’s license? That might be $1,000, a month’s suspension, six month’s probation and, yes indeedy, two trips to Orlando to watch the commission in action when you could have been out selling.
To be sure, the disciplinary reports are, for the most part, big violations done in a willful manner. If you happened to think these people are representative of the state’s real estate community, you’d head north on the nearest interstate. FREC’s disciplinary action lists reveal a nasty crowd to whom fraud, theft, scheming, negligence and all other sorts of dishonesty seem to be a matter of course.
But, of course, the real bad guys aren’t the norm.
The norm is the little guy who didn’t realize - through ignorance - that his door sign didn’t need the broker’s name, or that his actions as an agent exceeded his authority, or that his change of address was no one else’s business, or that the money really didn’t need to be deposited right away.
But what seems picky to you is serious to the regulators, who must enforce the state’s laws and the commission’s rules. And that means that O’Brien and the Division of Real Estate, which serves the real estate commissioners, must do the onsite work.
“The first steps are the same,” says O’Brien. “The complaint goes to the analyst and the legal section.”
O’Brien and his staff are trying to reach out to Realtors.
“If we can get to them face-to-face, we see a lot of success,” says O’Brien. “We have nine staff attorneys and we prefer that they spend their time dealing with the major problems. But, they have to spend time with every complaint.”
O’Brien is leading the charge, traveling around the state to meet with local boards.
“In the past few weeks, I’ve been in Miami, St. Petersburg, Tampa and Miami,” he said. “We have meetings and 80, 90, 150 show up. It’s a great time to go one-on-one to let them know what they should be looking for.”
The Division of Real Estate oversees real estate school licenses and that’s another point of attack.
“It’s another place where people are one-on-one,” said O’Brien. “We see the real estate instructors at their annual seminars and we make it very clear that we expect our licensees to know right from wrong.”
Local Realtors know that there are major violations but the smaller ones seem to bug them the most.
“One of the most prevalent violations is in advertising,” said Dirk Schroeder, the broker-owner of Century 21 St. Augustine Properties. “They (some realtors) tend to get sloppy and they do not put the name of their company in their ads. And, some individual agents and broker associates working for a brokerage company owned by someone other than themselves will advertise as if they are the broker.”
The recent days of “flipping” also produced problems.
“One of my customers was offering $500 to anyone who brought him a buyer,” said Carol O’Donoghue of All Real Estate Options. “I explained that he was acting as a Realtor without a license. He said he read it in a book and that tons of ‘flippers’ were doing it.”
Following a complaint
You have a complaint filed against you to the Florida Real Estate Commission. What happens next?
• The complaint is forwarded to a “complaint analysis,” who determines if it is “legally sufficient.”
If it is, a case number is assigned and the case is forwarded to the Investigative Field Office in this area.
If it is not, a case number is assigned, and a letter is sent to the person making the complaint explaining that no case will be opened. The case remains in the FREC records but is kept confidential.
• The investigator determines the facts, as best they can, by talking with all sides of the issue and files a report to the FREC legal department.
• If the legal department determines that there has been a possible violation, the case is referred to the Probable Cause Panel of the commission. This is a committee of commission members who are not employed by the state.
• If the panel determines there is Probable Cause, it is remanded to the legal department, which negotiates a settlement with the person involved based on standard penalties.
• If the person accepts the penalties, the case goes back to the Comission for approval.
• If the person and the attorneys cannot agree on penalties, or if the person maintains innocence, the case goes before the board for a decision.
The Commission’s Disciplinary Action Report is on the state’s Web site at www.myfloridalicense.com/dbpr/re/FRECDARs.html.
And yes, you’ll know some of the people who have gotten in trouble.
The North Florida area is relatively error free, certainly compared to the rest of Florida. Of the 175 listed to date on the report, only five are from this area.
Checklist
Here are some of the most common violations that real estate professions seem to ignore, or be unaware of:
Escrow accounts
• Withdrawals from an account can be made only with written permission from “all interested parties.”
• A broker may “place and maintain” no more than $5,000 of personal or brokerage funds in the broker’s property management escrow account, and no more than $1,000 in personal or brokerage funds in the broker’s sales escrow account.
• Escrow accounts may be established only in Florida-based banks, trust companies, title companies, credit unions or savings and loan institutions.
• Deposit of escrow monies much be made no later than the third business day following receipt of the money.
Records
• Brokers must keep records for five years.
• If records have been used as evidence in a litigation, they must be kept two years after the case has been closed.
• Escrow accounts must be reconciled at least once a month.
Licenses
• If a licensee changes companies, he must file a “Change of Status” form with the Division of Real Estate in order to become active.
• A broker must file a “Change of Status” form when a sales associate leaves his company.
• A license that is delinquent for more than 24 months is null and void.
• All brokers in a company are equally responsible for actions within the company.
• The commission must be notified of a change of address within 10 days.
• Florida does not recognize licenses from other states. However, the state has “Mutual recognition” with Alabama, Arkansas, Connecticut, Georgia, Indiana, Mississippi, Nebraska, Oklahoma and Tennessee, and licensees from those states only need to take an exam to get a Florida license.
• Completing the continuing education requirement is not an option; it is mandatory.
Offices
• Branch offices must have the same name as the corporate name.
• The broker’s name must be “on or about” the entrance of offices along with the words “Licensed Real Estate Broker.”
Advertising and signage
• All real estate ads must include the licensed name of the real estate firm.