Chapter 5-6 Key Concepts Flashcards Preview

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Flashcards in Chapter 5-6 Key Concepts Deck (41):

7 Steps to complaint process (quasi-judicial procedure)

  1. A complaint is filed
  2. Investigation of the complaint
  3. Probable cause determination
  4. Formal complaint is issued if probable cause is found
  5. Informal hearing or formal hearing is conducted
  6. Final order is issued
  7. Judicial review (appeal) of the final order


Complaint is filed with the DBPR

  • Complaint must be legally sufficient
  • DBPR may issue a notice of noncompliance for a first-time offense of a minor violation
  • FREC rule lists violations for which a notice of noncompliance may be issued


Investigation of the complaint

  • Complaint must be in writing and legally sufficient
  • Anonymous (unsigned) complaint is accepted if complaint is substantial
  • DBPR/DRE investigates (not the FREC)
  • Summary suspension issued by DBPR Secretary in serious cases to suspend licensee immediately (also referred to as an emergency suspension order, or a final summary order)


Probable Cause Panel

  • Composed of 2 current members or 1 current and 1 former member of the FREC
  • Closed to the public
  • Decision as to whether probable cause exists is made by majority vote of the panel or by the DBPR, if the profession does not have a board.
  • If probable cause not found, may dismiss case or dismiss with letter of guidance


Formal Complaint is issued if probable cause is found

  • Also called an administrative complaint
  • Specifies the alleged violation



Licensee-respondent and DRE may reach a possible settlement prior to a hearing and enter into a stipulation

  • The agreement as to the facts of the case and the penaly reached between the attorneys for the DRE and the licensee is a stipulation
  • The terms of the stipulation are approved or denied by the FREC during a Commission meeting


Informal Hearing

  • Licensee signs election of rights and does not dispute alelgations of material fact and request an informal hearing before the FREC for final action of the complaint
  • Held during regular Commission meeting
  • Probable cause members do not participate in informal hearing
  • Licensee must agree that there is no dispute of the material fact to choose informal hearing


Formal Hearing

  • Respondent/licensee signs election of rights disputing allegations of material fact and requests a formal hearing to determine the facts
  • Formal hearing is mandatory if licensee/respondent disputes the allegation
  • Administrative law judge (ALJ) hears testimony
  • ALJ has power to sear witnesses, take testimony under oath, and issue subpoenas
  • ALJ prepares and submits a recommended order to the DBPR that includes judge's findings and conclusions, and the recommended penalty based on range of penalties in FREC rule


Final Order

  • Probable cause members do not participate
  • Commission may accept, reject, or modify the conclusions of law in the administrative law judge's recommended order
  • Effective 30 days after final order is issued
  • Licensee may operate during complaint process and during 30-day period


Rights to appeal (judicial review) 

Rights to appeal (judicial review) must be filed within 30 days with District Court of Appeals

  • Licensee may request appeals court to stop (stay) enforcement of penalty
  • Writ of Supersedes stops (stays) enforcement of penalty


Penalties that may be imposed by the DBPR

  • Notice of noncompliance as first responde to a minor violation by a licensee
  • If a licensee fails to take corrective action within 15 days, the licensee may be issued a citation
  • If the violation is not listed in the citation rule, the licensee may be subjected to other disciplinary penalties


Administrative Penalties that are imposed by the FREC

  • Deny an application
  • Letter of reprimand
  • Probation
  • Administrative fine of up to $5,000 per count or separate offense for violating Chapter 475 and Chapter 455
  • Suspension for up to 10 years
  • Revocation with prejudice (Revocation without prejudice applies to license issued in error)


The FREC must report criminal violations

The FREC must report criminal violations to the state attorney

The FREC must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes of disciplinary action taken against a real estate licensee


First-degree misdemeanor

First-degree misdemeanor is a criminal penalty punishable in a court of law by a fine of not more than $1,000 and/or by imprisonment for not more than 1 year

  • Failing to provide accurate and current rental information for a fee


Second-degree misdemeanor

Second-degree misdemeanor describes all otehr violations of Chapter 475

  • $500 fine and/or 60 days imprisonment


Unlicense practice of real estate for compensation 

Unlicense practice of real estate for compensation is a felony of the third degree

  • The criminal penalty is a fine of not more than $5000 and/or up to 5 years in jail
  • DBPR issues cease and desist order, or it may issue an injuction or a writ of mandamus ordering unlicensed activity to stop


Recovery Fund

  • Separate account used to reimburse an individual or business entity judeged by a Florida court to have suffered monetary damages as result of license law violations by a licensee
  • Licensee must hold an active license at the time of the alleged act
  • Claim limited to $50,000 per transaction
  • Claims agains 1 licensee may not exceed in total $150,000
  • Fee collected from licensee when fund drops bellow $500,000; collection is discontinued when the fund exceeds $1 million
  • License is automatically suspended upon payment from the fund until the fund is reimbursed (including interest)
  • A broker who complies with an escrow disbursement order (EDO) and is later sued may be reimbursed from the fund without penalty


Person not eligible to seek reimbursement from Recovery Fund

  • Spouse of the offending license
  • Licensee who acted as a single agent or a transaction broker in the transaction may not make claim for unpaid commission
  • Anyone who bases the claim on a real estate transaction in which a licensee owneed or controlled the property and was dealing for his or her own account (not acting as a licensee)
  • Anyone who makes a claim against a licensee with an inactive real estate license at the time of transaction
  • Judgement was issued against a business entity and not an individual


Civil Rights Act of 1866

  • Prohibits racial discrimination
  • Applies to all real estate transactions without exception


Civil Rights Act of 1964

  • Prohibits discrimination based on race, color, religion, or national origin
  • Applies to public accommodations
  • Applies to public facilities operated by state or municipal governments


Fair Housing Act (Title VIII of the Civil Rights Act of 1968, as amended)

Established protected classes

  • Race
  • Color
  • Religion
  • Sec
  • National Origin
  • Familial Status
  • Handicap Status
  • No protection is given to individuals based on age, occupation, marital stauts, or sexual orientation


Housing under Fair Housing Act

Includdes sale or rental of housing, financing of housing, and brokerage services, specifically

  • Government-owned residential property
  • All privately owned residential property if real estate licensee is employed
  • Residential property owned by a person who owns four or more residential units
  • Residential property when owner, during the past 2 years, sells 2 or more houses in which the owner did not reside.
  • Multifamily dwellings of 5 or more units
  • Multifamily dwellings of 4 or fewer units if the owner does not reside in 1 of the units


Prohibited Activities

  • Refusing to rent to, sell to, negotiate with, or deal with a member of a protected class
  • Quoting different terms or conditions for buying or renting
  • Advertising that housing is available only to people of certain race, color, religion, sex, national origin, handicap status, or familial status
  • Steering
  • Blockbusting
  • Redlining
  • Denying membership in or use of any real estate service, broker's organization, or MLS
  • Making false statements concerning the availability of housing for inspection, rent or sale


Certain Housing for older person

Exempt from familial status protection under the Fair Housing Act provided one of 2 situations exists:

  1. All units must be occupied by persons 62 years of age or older
  2. At least 80% of the units are occupied by 1 or more persons 55 years of age or older


Real Estate transactions exempted under the Fair Housing Act

  • 2 conditions must be met: (1) real estate licensee not involved and (2) no discriminatory advertising
  • Seller owns 3 or fewer single-family dwellings and sells or rents the property
  • Seller was not living in the single-family house and was not the most recent resident when the property was sold or rented (one sle is exempt within a 24 month period)
  • Rentals in multifamily dwellings of 4 or fewer units, and the owner lives in one or the units
  • Although these transactions are exempt under the Fair Housing Act, if racial discrimination occurs, the individual can be sued under the Civil Rights Act of 1866


Special exemption under the Fair Housing Act

  • Religious organizations may restrict dwellings units they own or operate to members of their religion provided the organization does not discriminate in accepting its membership
  • Private clubs may restrict rental or occupancy of its units to its members


Fair Housing Act Poster

Fair Housing Act requires use of equal opportunity poster

  • Poster features housing logo and statement pledging adherence to the Fair Housing Act
  • Must be displayed in real estate offices
  • Failure to display poster may be considered evidence of disrimination in the event of a discrimination complaint is filed
  • Burden of proof to prove no discrimination has occured is on a broker who fails to display the poster


Who prosecutes Fair Housing Complaints?

HUD prosecutes Fair Housing Complaints

  • If seller or landlord asks licensees to violate Fair Housing Laws, licensee must refuse to list the property, or terminate the existing listing
  • The FREC may institute and administrative proceeding against a licensee found guilty of a discriminatory act


American with Disabilities Act of 1990

  • Purpose is to ensure that persons with disabilities have access to public transportation, commercial facilities, and public accommodations
  • ADA requirements implemented for new construction
  • Broker office must complay with ADA provisions
  • If the broker's office is in a private residence, the accessibility standards apply to that portion used exclusively as an office and to portions available to customers, including bathrooms


Interstate Land Sales Full Disclosure Act

  • Federal law that regulates the sale and lease of land
  • Developers of 25 or more lots must provide each purchaser with a property report before the signing of the contract
  • Purchasers who receive the property report prior to signing the contract may cancel the contract within 7 days
  • Contract must state purchaser's right to cancel contract
  • Developers must register subdivisions of 100 or more lots by filling a statement of record with HUD


Truth In Lending Act

  • Implemented by Federal Reserve Regulation Z
  • Requires lenders to disclose the annual percentage rate and all costs associated with credit


Advertisments containing Triggering terms must disclose

  • Amount or percentage of down payment
  • Terms of repayment
  • Annual percentage rate


Three-day right to rescission

  • Does not apply to first mortgages
  • Applies to most consumer loans, including home equity lines of credit, second mortgages, and refinance loans


Equal Credit Opportunity Act (ECOA)

  • Enforcec by the Federal Trade Commission
  • Requires financial institutions engages in extending credit to make credit available without discrimination on the basis of race, color, religions, national origin, sex, marital status, age, or receipt of public assistance


Real Estate Settleemtn Procedures Act (RESPA) purpose

Enacted to ensure buyers are informed regarding the amount and type of charges they will pay at closing



RESPA disclosures

  • Settlement statement (HUD-1) at or before closing
  • If requested by borrower, closing agent must provide a copy of HUD-1 statement 1 business day before the actual settlement
  • Information booklet concerning costs at time of loan applicaiton or within 3 business days
  • Good-faith estimate (GFE) of settlement costs at time of loan application or within 3 business days
  • Limits the amount lenders can require borrowers to place in escrow to pay property taxes and hazard insurance


Coastal Zone Management Act

  • Administered by the Enivronmental Protection Agenty (EPA)
  • Designed to protect coastal areas
  • Participation by states is voluntary (federal funds available for states that do participate)
  • Attempts to reduce nonpoint source (NPS) pollution


Florida Residential Landlord and Tenant Act purpose

Too put landlord and tenant on a more equitable basis


How must Landlord maintain security deposits and advance rent

Landlord must maintain security deposits and advance rent

  • Separate non-interesting-bearing escrow account
  • Separate interest-bearing account and pay tenant 5% interest or 75% of interest earned
  • Separate account is not required if the landlord posts a surety bond for the lesser of the amount of the fund or $50,000 (pay tenant 5% interest)


What is the requirement if a Broker hold's the security deposit and rent advancements for the landlord?

If a real estate broker holds the funds on behalf of a landlord, the broker must abide by real estae license law concerning escrowed funds


What codes must a residential landlord comply with?

Residential landlord must comply with

  • Building codes
  • Housing codes
  • Health codes