Q: If a real estate licensee lists a property at a below market price he knows the seller probably won’t accept, is the licensee in violation of Florida real estate license law?
A: FAR’s General Counsel Randy Schwartz answers: “While a violation of the Florida real estate license law is a matter to be determined by the Florida Real Estate Commission, in my opinion, if a licensee lists a property for a price the licensee and the seller know is not acceptable, a case of misrepresentation and false advertisement can be made under Chapter 475.25(1)(c) Florida Statutes. It would not make any difference if the listing indicated that the selling price was subject to a third party lender or not; it is more a matter of advertising something that is known to not be acceptable.”
Q: Is the seller in violation of any law if he states he would sell a property at a certain price even though he knew it would not actually sell at that price?
A: Randy Schwartz: “I do not believe the seller would be violating any license law because Chapter 475, Florida Statutes, does not regulate the public. However, Chapter 817, Florida Statutes, might come into play for the licensee and a member of the public. Whether the seller could be held accountable for civil damages, due to his or her misrepresentation, would be completely determined by the individual facts of the case.”
Q. Does Florida’s new Foreclosure Rescue Fraud Prevention Act (F.S. 501.1377) prohibit real estate licensees from being involved in short sales?
A. According to Florida Attorney General Bill McCollum, the answer is no, provided the only compensation sought by the licensees is the commission on the sale. The new law, which took effect Oct. 1, 2008, seeks to protect homeowners who face the threat of foreclosure from individuals who would prey on them.
McCollum’s interpretation is based on the following scenario: A licensee secures a listing agreement on a home for sale, ascertains that the fair market value of the home is less than the loan amount, and lists the property at the lower amount. If a buyer agrees to pay less than the loan amount, the licensee then asks the lender to accept the lesser amount in order to avoid foreclosure.
“As long as there is no upfront or other fee for the negotiating service other than the normal real estate fee charged for the sale of the property, that activity [participating in a short sale] would not appear to fall under the provisions of F.S. 501.1377,” according to McCollum.
Q. Does a non-licensed assistant meet IRS rules for independent contractor status?
A. It depends on the amount of control, according to IRS Publication 15a. Here are three areas the IRS uses to sort out the question:
1. Behavioral control. Facts that show whether the business has a right to direct/control how the worker does the task for which he/she is hired include the type and degree of instructions provided, how results are achieved and training provided.
2. Financial control. Facts that show whether the business has a right to control the business aspects of the worker’s job include unreimbursed business expenses, worker’s investment, worker’s availability, how wages are paid and profit/loss from business activity.
3. Type of relationship. The parties’ relationship can be defined by written contracts, worker benefits (i.e. insurance, pension plan, vacation/sick pay) and permanency of the relationship.
Q: A woman wants a broker to list and sell her mobile home located on a lot she rents from a mobile home park. Can the broker list and sell her mobile home?
A: No. A real estate licensee may sell a mobile home and the land on which the mobile home is located without having a mobile home dealer’s license. Here, since the seller does not own the land, the broker would first need to obtain a mobile home dealer’s license issued by the Department of Highway Safety and Motor Vehicles (DHSMV). Contact information, including application forms required for licensure as a Mobile Home Dealer, can be found at the DHSMV’s Web site located at www.hsmv.state.fl.us.