FREC Case Study: Unlicensed real estate corporation
Thursday, February 7, 2013
By Leigh Matchett
Florida Department of Business and Professional Regulation
In 2008, a licensed real estate broker was registered with the division of corporations as the sole officer of an unlicensed real estate corporation. During a real estate transaction involving a sale and purchase agreement, the licensee operated as an agent for the unlicensed real estate corporation. The unlicensed real estate corporation was listed as the cooperating broker for the transaction and expected to receive a commission for real estate services. Additionally, the contract indicated that a total of $9,600 would be held in escrow by the unlicensed real estate corporation.
After a complaint concerning the transaction was filed with the department in 2009, the department requested the licensee’s brokerage business records in accordance with Section 475.5015, Florida Statutes. However, the licensee refused to provide the department with the records.
Based on the subsequent investigation, the department filed an administrative complaint against the licensee alleging violations of Section 475.25(1)(e), and 455.227(1)(j), Florida Statutes. Specifically, the department alleged that the licensee violated the statutory requirement to keep and make available to the department such books, accounts, and records as will enable the department to determine whether such broker is in compliance with statutory provisions. Additionally, the department alleged that the licensee violated Section 455.227(1)(j), by acting as an agent for her unlicensed real estate corporation, therefore aiding and abetting an unlicensed real estate corporation.
After being served with the administrative complaint, the licensee requested a formal hearing, which was held at the division of administrative hearings before an administrative law judge. Ultimately, the judge found that the licensee violated Section 455.227(1)(j), by acting on behalf of the unlicensed real estate corporation during a real estate transaction. Furthermore, the judge found that the licensee violated Section 475.25(1)(e), by violating Section 475.5015, Florida Statutes, by failing to provide brokerage business records as requested by the department. The licensee’s broker license was revoked and she was fined $2,000.
Leigh Matchett is the assistant general counsel for the Florida Department of Business and Professional Regulation.