A: Once a complaint has been filed with the DBPR, it is assigned to a complaint analyst for review to determine if there is a potential violation of real estate licensing law. If the analyst concludes there is no violation, no action will be taken.
However, if the analyst concludes that there is a potential violation of real estate licensing law, the complaint will be assigned to an investigator. The investigator can conduct interviews and gather additional evidence. You are entitled to a copy of the complaint, and you may submit a written response to the information contained in the complaint within 20 days from the date of service.
When the investigation is complete, the investigator will turn over the file to the Division of Real Estate’s legal department. The case is then assigned to an attorney. The attorney will review the investigator’s report and determine if there is legal sufficiency for a formal administrative complaint.
If so, the attorney will draft a proposed administrative complaint and present this to the probable cause panel along with a copy of the report. If you submitted a written response, it will be presented to and considered by the probable cause panel.
Q: Should I hire an attorney if a complaint is filed?
A: An administrative complaint can have a significant negative effect on your real estate license and your wallet. If you are found to have violated real estate licensing law, your real estate license could be suspended, or even revoked. Additionally, you could be fined up to $5,000 per count. An attorney may be able to resolve the complaint before it becomes public or reduce the impact of the complaint. Therefore, we recommend consulting with an attorney who has experience successfully handling complaints submitted to the FREC.
Q: What happens to a debtor’s property during and after bankruptcy?
A: With a growing number of property owners filing bankruptcy, there is an uncertainty as to what happens to a debtor’s property during and after bankruptcy. All assets and debts must be listed in a bankruptcy, including a debtor’s homestead. When a debtor files bankruptcy, all of his assets become property of the estate. A trustee is assigned to distribute the assets amongst the creditors. The debtor would be able to have the mortgage discharged and walk away from the home. In addition, a debtor is able to protect some of his assets, based on the state mandated exemptions. Florida allows complete protection of a homestead. However, the property cannot be larger than half an acre in a municipality or 160 acres elsewhere. This would mean, if the debtor had equity in the home, he would be allowed to keep it if it qualified for homestead.
Q: Can a homeowner list their property while in bankruptcy?
A: It usually doesn’t make sense to list a property when the debt will be discharged in a bankruptcy. However, you may have the rare situation when there is equity in a homestead and the owner wants to sell his home in hopes of recovering the profits.
If a homeowner is in the middle of a bankruptcy and decides to list his property he will need to get permission from the Bankruptcy Court to list it. This must be done by his bankruptcy attorney. The debtor/seller should have language in the contract notifying the buyer that final acceptance of the contract will be contingent on the Bankruptcy Court’s approval.
The proceeds from the sale of the home will be property of the bankruptcy estate and the trustee will distribute the money to any creditors. If there is a remaining balance, the debtor would receive it.
Q: What are the circumstances requiring a Notice of Adverse Action in a landlord/tenant transaction?
A: The Fair Credit Reporting Act (FCRA) requires a Notice of Adverse Action in certain circumstances, including when a landlord takes any action that is unfavorable to the interests of a prospective tenant.
Some examples of an “adverse action” in a landlord/tenant transaction follow: denying an application; requiring a co-signor on the lease; requiring a larger deposit than would be required for another applicant; and raising the rent. Although the landlord as decision maker has the legal obligation to provide the notice to the applicant, this topic impacts Realtors who act as property managers because of the brokerage record retention law, Chapter 475.5015, Florida Statutes (2013).
Any time a landlord’s decision is in any way based on information contained in a consumer report, a broker’s records should contain the Notice of Adverse Action that a landlord provided to the prospective tenant.
Q: I am a property manager. The landlord I represent is going to approve the tenant who applied; however, because the credit report we obtained shows that the tenant’s credit score is lower than the landlord prefers, the landlord decided to approve at a higher rental rate than advertised. Is the notice of adverse action required? The tenant was approved, after all.
A: Yes. Denial of an applicant is not the only “adverse action”; in fact, the landlord in this scenario made a decision “adverse,” or unfavorable, to the tenant by raising the rent. Because that decision was based in part on information contained in a consumer report, the decision triggers the Notice of Adverse Action under the FCRA. This notice should be included with the brokerage records for this transaction according to Fla. Stat. 475.5015.
Q: What are ‘testers,’ and how does that apply to fair housing laws?
A: The Fair Housing Act of 1968 prohibits “any preference, limitation or discrimination because of race, color, religion, sex, handicap, familial status or national origin, or intention to make such preference, limitation or discrimination” in connection with any aspect of a residential real estate transaction.
The Florida Civil Rights Act of 1992 “secures all individuals within the state freedom from discrimination because of race, color, religion, sex, national origin, age, handicap or marital status.”
The Fair Housing Act has been applied by courts across the country to “individuals, corporations, associations and others involved in the provisions of housing and residential lending, including property owners, housing managers, homeowners and condominium associations, lenders, real estate agents and brokerage services.”
There has been a recent wave of lawsuits filed against Realtors by “testers,” which are groups that call Realtors just to see if the Realtor will violate a provision of the Fair Housing Act, even though the tester has no relationship with the Realtor and is not interested in buying or renting the listed property.
Courts have found that these testers have standing to sue as they have suffered injury so it is imperative that Realtors have awareness and comprehension of the Fair Housing Act, in addition to The Florida Civil Rights Act, so that they aren’t facing lawsuits.