Chapter 06 - Violations of License Law: Penalties and Procedures (P12) Flashcards
Penalty that can be imposed by the FREC
Administrative Penalty
Penalty that can be imposed by the courts
Civil or Criminal Penalties
Criminal penalty imposed for violation of rental list requirements
First-Degree Misdemeanor
Criminal penalty imposed for acting as a broker or sales associate without a license
Third-Degree Felony
Penalty, imposed by a court, that imposes a fine or other financial payment, typically as compensation for harm or wrongful conduct
Civil Penalty
Criminal penalty imposed for disseminating false or misleading advertising
Second-Degree Misdemeanor
Criminal penalty imposed for knowingly giving false information when applying for or obtaining a license
Third-Degree Felony
Criminal penalty imposed on a sales associate who collects money in connection with a real estate transaction other than in the name of the employer
Second-Degree Misdemeanor
Criminal penalty imposed for stealing or reproducing a DBPR Examination
Third-Degree Felony
Range of penalties for a second-degree misdemeanor (i.e. false advertising or sales associate collecting money directly from a member of the public)
A criminal fine of up to $500 and/or imprisonment for up to 60 days
Range of penalties for a first-degree misdemeanor (i.e. rental list violation)
A criminal fine of up to $1,000 and/or imprisonment not to exceed one year
Range of penalties for a third-degree felony (i.e. acting as a broker without a license, false information on a license application, stealing or reproducing an exam)
A criminal fine of up to $5,000 and/or imprisonment of up to five years
Timeframe within which an administrative complaint must be filed
Within five years of the time of the act causing the complaint, or within five years from the discovery of the act with due diligence
Circumstances that could add injury caused by an act, possibly increasing the penalty
Aggravating Circumstances
Circumstances that might reduce a penalty
Mitigating circumstances
Misstatement or omission of facts that could lead to fraud
Misrepresentation
Actions of a broker who violates his or her fiduciary duties to the principal in an agency relationship
Breach of Trust
Agent’s failure to disclose information to his or her principal that could materially affect the principal’s decision
Concealment
Action required by a broker when a question relating to the title of property arises
Advice the prospective purchaser to obtain title insurance or to obtain an attorney’s title opinion
Actions of a broker who uses escrow funds for his or her personal use
Conversion
Conversion that occurs when a broker is unable or unwilling to produce money or property that belongs to another
Failure to Account
A broker who operated in a reckless, careless, and excessively negligent manner
Culpable Negligence
Actions of two or more licensees acting together to defraud a third party
Conspiracy
Fraud that a sales associate may be charged with who forgets to collect an escrow deposit as specified in a sales contract
Culpable Negligence
Condition under which a broker may be able to use a lottery to induce a person to buy real estate
When no purchase is required to participate
Action required by a broker who knows of the existence of a lien encumbering a property
Broker must disclose the existence of any and all liens
The maximum administrative fine that may be imposed by the FREC for a violation of a law or rule
$5,000 per violation
Maximum FREC imposed penalty for misrepresentation, concealment, or obtaining a license by fraud
License revocation, plus a maximum fine of $5,000 per violation
Impact of license revocation on the licensee’s ability to practice real estate
Revocation permanently removes the license, preventing further practice of real estate in Florida
The maximum penalties administered by the FREC
License Revocation or Denial of License
The minimum penalty administered by the FREC
Reprimand (criticism from the FREC that notes the licensee’s unsatisfactory conduct)
Term that refers to a conditional arrangement in which the FREC allows a licensee to continue to practice real estate services if the licensee completes specified requirements
Probation
Typical term of probation
90 days, unless otherwise stated
Type of FREC-imposed penalty that temporarily prevents a licensee from practicing real estate for specified period of time, depending on the seriousness of the violation
Suspension
Maximum period of suspension
10 years
Possible consequence of a second suspension
License Revocation
Licensee action required upon being convicted or found guilty of, or having pred nolo contendere or guilty of a crime in any jurisdiction
Report to the DBPR within 30 days (“Criminal Self-Reporting Document”)
Penalty range for failure to self-notify the FREC in writing within 30 days of being convicted or found guilty of, or having pled nolo contendere to, or guilty of a crime in any jurisdiction
Suspension to revocation and an administrative fine of $500 to $2,500 (for first offenses) or $1,000 to $5,000 (for subsequent offenses)
FREC use for a Notice of Noncompliance
Handling first time minor violations that do not result in economic or physical harm to persons or adversely affect the public health, safety, welfare, or create a significant threat or harm
Time period within which a licensee must correct a violation after receiving a Notice of Noncompliance
Within 15 days after receiving the Notice
Individual who is the subject of a formal complaint
Respondent
Provided by the respondent to indicate whether he or she disputes the allegations in a formal complaint
Election of Rights form
Consequence of failing to correct a violation within 15 days of receiving a Notice of Noncompliance
Issuance of a Citation (or full disciplinary proceedings)
Steps in the FREC disciplinary process
1- Complaint
2- Investigation
3- Probable cause panel
4- Administrative/Formal complaint
5- Formal/Informal hearing
6- Final order
7- Appeal
Conditions under which a citation can be issued by the FREC
For specific violations when no substantial threat to the public health, safety, and welfare exists or if the potential for harm has been removed prior to the issuance of the citation
Actions that take place as part of the Probable Cause Panel investigation (Step 3)
- Review of the investigator’s report by panel of 2 current FREC members or past members to determine the probability of guilt
- Within 30 days, dismissal of case or recommendation for formal complaint
Term that refers to the person who files a complaint that a violation of a law or rule has occurred
Complainant
Options for licensee who has been issued a citation that requires payment of a fine as a penalty
Accept the penalty and pay the fine or dispute the citation within 30 days and go through the formal hearing process
Time period after which an undisputed citation becomes a final order
30 days
Type of complaint that alleges that a violation of law or rule has occurred and contains sufficient supporting evidence
Legally Sufficient Complaint
Actions that take place as part of processing of a complaint (Step 1)
- Investigation of written complaints against licensed and unlicensed persons
- Complaint review to determine if they are legally sufficient, requiring investigation (Mediation may be used to resolve some complaints that are economic in nature)
Type of order that may be issued by the Secretary of the DBPR for a complaint that is found to be of an extremely serious nature that poses an immediate and serious danger to the safety and welfare of the public
Summary (or Emergency) Suspension (license is immediately suspended by the Secretary of the DBPR
Type of informal dispute resolution that may be used for the resolution of violations that are economic in nature or that can be remedied by the subject of the complaint, such as failure to maintain an office sign
Mediation
Type of FREC power that is exercised by the Probable Cause Panel
Executive Powers
Actions that take place as part of a complaint investigation (Step 2)
- Investigation and determination of probable cause
- Report submission to the DRE (without personal opinion or recommendations) (Crease and desist order may be issued for unlicensed individual; Complaints of a serious nature may be forwarded for possible legal action and/or result in a summary suspension order)
Time when the Probable Cause Panel’s information and deliberations cease to be confidential
10 days following a finding of probable cause (filing of a formal complaint)
Time period within which a respondent must file an Election of Rights form
Within 21 days of the formal complaint (Failure to file results in a hearing)
Term that refers to a negotiated settlement agreement between respondent and DBPR attorneys in which the respondent, in most cases, neither admits guilt nor denies the complaint allegations, but agrees to the imposition of a negotiated disciplinary action instead
Stipulation (similar to a plea bargain)
Type of FREC power that is exercised by the issuance of a formal complaint
Quasi-Judicial Powers
Condition under which a Writ of mandamus is issued by the District Court of Appeals to restore the licensee’s privileges
If the appeal reverses the final order of the FREC
Actions that take place as part of the Formal Complaint handling (Step 4)
- Administrative (Formal) Complaint is filed and served against the respondent
- Respondent has 21 days to file Election of Rights form
- Final order entered for FREC-approved stipulation or if not approved, case proceeds to hearing
Document filed with the Florida District Court of Appeals within 30 days of the final order by a licensee who does not agree with the final order of the FREC
Petition for Review
Condition under which an informal hearing is conducted
Respondent does not dispute the facts of the allegations in the complaint (respondent can present testimony to explain mitigating circumstances that could reduce the punishment)
Actions that take place as part of a Formal Hearing (Step 5)
- Formal hearing (licensee disputes facts) before an administrative law judge (ALJ) from the DOAH with possible subpoena of witnesses
- ALJ submits a recommended order to the FREC within 90 days after formal hearing
- Parties have 15 days to file exceptions to the recommended order
Actions that take place as part of the Final Order of the Commission (Step 6)
- FREC Final Order Panel (FREC members who were not on the Probable Cause Panel), reviews the ALJ recommended order
- Final Order Panel can accept the ALJ recommended order or amend it
- Final order is made by FREC and becomes effective in 30 days
Condition under which a licensee may continue to practice real estate during the appeal process of a final order
Stay of Enforcement is issued and a Writ of Supersedeas is granted by the District Court of Appeals (will not be granted if a threat of probable danger to the welfare of the public is shown)
Licensee’s final appeal option if the District Court of Appeals affirms the action of the FREC
Appeal to the Florida Supreme Court
Purpose of the Florida Real Estate Recovery Fund
Reimbursing members of the public who have lost money as a result of fraudulent actions of licensees
Conditions under which reimbursement from the Recovery Fund may be made
- Member of the public must file a civil suit first against the licensee and receive a judgment
- Licensee’s personal assets were used first but were insufficient to satisfy the judgment
Reimbursement limitation amounts from the Recovery Fund
- Single judgment limited to $50,000
- Multiple judgments limited to $150,000
- May collect unsatisfied portion of judgment only, not court costs or attorney fees
License status of licensee whos actions resulted in a disbursement from the Recovery Fund
License is automatically suspended until the money plus interest has been repaid (bankruptcy does not relieve licensee of this obligation)
Method by which the FREC can enforce repayment by the licensee
FREC has lien against all property owned by the licensee, which can be foreclosed if the money is not voluntarily repaid
Source of funds to maintain the Recovery Fund
Funded by fees and fines paid by licensees
- $3.50 per year added for new and renewal broker licenses
- $1.50 per year added for new and renewal sales associates licenses
Conditions under which a licensee is eligible to receive reimbursement from the Recovery Fund
Licensee is acting in capacity of buyer or seller only, loses money as a result of fraudulent actions of another licensee, and meets the same eligibility requirements as members of the public
