UNIT 6- Violations Of License Law, Penalties And Procedures Flashcards
The mixing of money or other personal property of a buyer or seller with a broker’s own money or property
And/or
Combining escrow money with personal or business funds is an illegal act known as…?
Commingling of Funds (Comingle)
Withholding of information or a material fact is known as?
CONCEALMENT
Conversion
Using earnest money (escrow) funds for personal use.
The failure of a broker, while unintentional, to give ordinary, careful attention to their brokerage and not exercise reasonable control over their agents is known as…?
Culpable Negligence
What is Fraud?
The intentional deceit for the purpose of inducing another person to rely on that deceitful information and part with something of value or surrender a legal right
Misrepresentation
An untrue statement of fact
I.e. Failure to indicate in a newspaper that a listed property is advertised by a licensee.
Moral Turpitude
Conduct contrary to honesty, good morals, justice, or accepted custom.
I.e. Writing bad checks
When does the “COMPLAINT” process begin?
When the complaint is filed IN WRITING with the DBPR.
What are the characteristics of a “complaint”
It must be LEGALLY SUFFICIENT and a fact that a violation of the following must have occurred…
FL STATUTE
DBPR RULE
FREC RULE
Who may file a complaint?
Anyone may file a complaint against a licensee, applicant, or an unlicensed person believed to be in violation of chapter 475 F.S
The violation DOES NOT NEED o pertain to real estate or take place in FL.
Investigation of the complaint
All information obtained must be treated as confidential until 10 DAYS after probable cause has been found to exist OR The subject of the investigation waives the privilege of confidentiality
⭐️⭐️Summary Suspension
Issued by the DBPR…NOT THE FREC
No hearing is required.
Issued when the DBPR or the DRE uncover something so serious that they cannot allow the licensee to continue to endanger the public welfare
How is probable cause determined?
After review of the facts and determined by a majority vote to the FREC’s PROBABLE CAUSE PANEL.
What is the composition of the probable cause panel?
Composed of 2 individuals
1 member must be a member of the FREC
Other member may be a former or current commissioner.
How long after receipt of the final investigative report does the probable cause panel have to make its decision?
30 DAYS
unless granted an extension by the secretary (of the DBPR)
What is a “Breach of Trust”
The violation or omission of a legal or moral duty
Describe a Settlement Stipulation
when the Licensee/Respondent and their attorney meet with a DRE attorney BEFORE a hearing to discuss a possible settlement and enter a STIPULATION
Stipulation
FREC APPROVED. It is an agreement as to the facts of the case and the penalty reached b/t attorneys for the DRE and the Licensee ot the Licensee’s attorney
An INFORMAL HEARING is characterized by the following…
1-There is NO DISPUTE of material fact
2-it is Presented before the FREC and at FREC held meeting
3-Licensee is given an opportunity to explain the details of the case w/supporting evidence and/or witnesses
4-any commissioners who served on the probable cause panel MAY NOT participate
A FORMAL HEARING is characterized by the following…
1-Licensee/Respondent DISPUTES the alleged facts and is given 14 DAYS notice of the hearing.
2-MUST BE HEARD by an ADMINISTRATIVE LAW JUDGE
Division of Administrative Hearing ( DOAH)
Employs Full time administrative LAW JUDGE to conduct formal hearings.
the Administrative law Judge must be a member of the FL BAR in good standing for 5 years prior to assignment.
Once the administrative law judge is assigned, the DBPR may take no further action except as litigating party.
Describe the difference between a RECOMMENDED ORDER and a FINAL ORDER.
THE RECOMMENDED ORDER is prepared by the administrative law judge that conducted the formal hearing. it will contain the judge’s facts and conclusions of law and the RECOMMENDED penalty, if any, in accordance with the FREC’s ‘range of penalties” as set forth in rule.
The FINAL ORDER is the FINAL DECISION issued by BY THE FREC after reviewing the RECOMMENDED ORDER of the judge.
When does a final order become effective?
30 DAYS after it has been entered.
May a LICENSEE continue to practice during the complaint process?
YES. The Licensee may practice up until the final order has become effective
May the LICENSEE challenge the FINAL ORDER and how is this done?
YES. They may file an appeal with the DBPR within 30 DAYS.
They must request a stay of enforcement which stops the suspension or revocation in the FINAL ORDER
To obtain a “stay” of the final order, the DISTRICT COURT OF APPEALS must issue a WRIT OF SUPERSEDEAS
What is a WRIT OF SUPERSEDEAS
Supersedes the action of the commission and allows the licensee to continue to practice until the case can be heard.
Name the 3 Types of administrative penalties issued for violation of LICENSE LAW
1-Letter of Reprimand** (Letter of Guidance) placed in licensees file regarding a minor INCDENT of misconduct that resulted in NO disciplinary action.
2- Notice of NON COMPLIANCE
warning for a minor VIOLATION that allows a licensee 15 DAYS to correct the minor infraction w/out consequence
3-CITATION**
issued for a violation that posed a substantial threat to the public.
involves a fine b/t $100-$500
**What is the MAXIMUM amount of time the FREC may suspend a License
10 YEARS
How long does a licensee have after receipt of a Citation to accept of reject the allegations?
30 Days
Describe the procedures when a licensee DOES NOT dispute the allegations
the citation penalty will become effective with FINAL ORDER and case will be closed
Describe the procedure when a licensee does dispute the allegations
Must file a WRITTEN objection w/in 30 days
What is the most severe form of administrative penalty?
REVOCATION
What happens when a BROKER’s license is suspended or revoked
All license’s filed under that broker are placed on involuntary-inactive status
What are the options for the licensee’s who were employed under a brokerage operating as a PARTNERSHIP or CORPORATION?
They may request registration with a new employer or within the same partnership/corporation IF it re-organizes to qualify under FL Statutes and FREC rules.
Revoke without Prejudice
when a license is revoked or cancelled because it was issued by mistake or inadvertence of the FREC
What happens when a license is placed on Probation?
1- FREC sets a timeframe for certain conditions to be met. These conditions may include:
- Require the licensee to attend the pre-license or post-license course or other educational offerings
- Attend 1 or more FREC meetings
- Submit to and successfully complete state exam OR be subject to periodic inspections by the DBPR investigator.
Falsifying a license application and the unlicensed practice of real estate is classified as this and punishable by up to 5 years in prison and/or 5K fine.
a THIRD DEGREE FELONY
What is the classification for failure to provide accurate or current rental information and what are penalties?
a FIRST DEGREE MISDEMEANOR and punishable by up to 1 yr in prison and/or 1K fine
The SECOND DEGREE misdemeanor of providing “false and misleading” advertising is a violation of this statute and these penalties
CH 475 F S
Fine of not more than $500 and/or up to 60 days in jail.
**What is the purpose of the Florida Real Estate Recovery Fund?
To reimburse an individual or business entity judged by the FLORIDA COURT to have suffered monetary damages as a result of an act committed by a broker or sales associate
**What is the MAXIMUM amount of disbursement from the fund for 1 judgment?
$50,000
**What is the MAXIMUM amount of disbursement from the fund against 1 License
$150,000
What is the time limit to file for a claim against the recovery fund?
2 years.
how are monies allocated to the fund?
By a yearly collection from both brokers and associates.
Brokers $3.50/yr
Associates $1.50/yr
Are there any limits on the fund?
Yes. Collections to the fund stop when the fund reaches $1M and begin again when the fund falls below $500K
What is the penalty associated with any payment from the fund for judgment against any licensee?
Mandatory suspension which begins on the date of payment from the fund and will not be restored until the licensee repays the full amount plus interest.
Claims resulting from an EDO when the broker complies with the order
If the broker who complied with the Escrow Disbursement Order is later required BY A COURT to pay damages as a result of legal actions taken by the buyer or seller, the FREC is authorized to order reimbursement to the broker for the amount of judgment against him/her up to $50K
There is NO DISCIPLINARY ACTION taken against the broker and no re-payment to the fund is required.
