Chapter 6: Violations of License Law: Penalties and Procedures Flashcards Preview

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Flashcards in Chapter 6: Violations of License Law: Penalties and Procedures Deck (52)
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1

What are the 3 separate entities capable of imposing discipline?

• Criminal courts
• Civil courts
• Administrative agencies
They operate separate and apart from one another. Any one of the three may impose a penalty for a given offense, but all three could impose a penalty for the same offense.

2

A violation of F.S.475

475 by a real estate licensee or an unlicensed person may result in criminal, civil, and administrative penalties.

The Commission can impose an administrative penalty against a licensee,

The courts may impose criminal and civil penalties against both licensed and unlicensed persons. A member of the public may file civil action against either a licensee or an unlicensed party. The civil penalty imposed for the unlicensed practice of real estate is a minimum fine of $500 and maximum of $5,000.

The Department has certain civil authority as well.

The Department and the Commission may also refer suspected violations of law discovered during an investigation to the State Attorney’s office for investigation and possible prosecution.

3

Criminal Penalties

Are imposed by criminal courts. A violation of F.S. 475 may be a first or second-degree misdemeanor or a third-degree felony
Corporations cannot be imprisoned, although a criminal fine may be levied. Imprisonment is possible for officers and directors of corporations who are guilty of violations.

4

First-Degree Misdemeanors

is punishable by a fine of up to $1,000 and/or imprisonment not to exceed one year
• Violating the requirements concerning rental lists, information, and contracts.

5

Second-Degree Misdemeanors

may be punishable by a criminal fine of up to $500 and/or imprisonment for up to 60 days. Examples:
• Disseminating false or misleading advertising
• Any sales associate who collects money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent of the employer.

6

Third-Degree Felonies

are subject to criminal court proceedings, and punishable by a criminal fine of up to $5,000 and/or imprisonment of up to 5 years.
• Acting as a broker or sales associate without being the holder of a valid and current active license
• Knowingly giving false or misleading information in the course of applying for or obtaining a license.
• Stealing or reproducing an examination administered by the Department

7

Civil Penalties

are fines or other financial payments imposed by a state or federal agency for violation of laws or regulations. A civil fine is not considered to be criminal punishment since it is primarily imposed to compensate for harm or wrongful conduct.
If a licensee commits fraud in a transaction or an unlicensed person performs a real estate service, a commission is not owed; therefore, a civil suit for collection of a commission in court would not be successful. If a commission had already been paid, a suit to recover the money paid to anyone not entitled to the commission would be successful.
Occasionally, the Commission uses its administrative powers to assist citizens in the event of fraud by a licensee. The Commission may make the return of an improperly collected commission part of the order of suspension with a stipulation that the order of suspension will not be removed until the money is voluntarily repaid.

8

Administrative Penalties

The Commission can impose administrative penalties. F.S. 455, “Business and Professional Regulation: General Provisions,” provides the Commission with the legal authority under which investigations and hearings are conducted. Hearing procedures are established by F.S. 120; the Administrative Procedure Act.

The Commission can give consideration to either mitigating or aggravating circumstances. Mitigating circumstances are considered to be extenuating, and reduce the degree of culpability. Aggravating circumstances add to the injury caused by the act. Violations that involve mitigating circumstances will generally carry a lesser penalty than those of aggravating circumstances. If the charge against a licensee includes multiple counts or a combination of violations, the Commission can impose a higher penalty.

9

Division of Real Estate Responsibilities

The Division of Real Estate (DRE) within the Department serves as intermediary between the Commission and the Department. The Division handles administrative functions; investigations, and prosecution of complaints in disciplinary proceedings against licensees. Administrative responsibilities include ministerial services such as filing, record keeping, and other clerical functions pertaining to real estate licensees. The offices of the Division and the Commission are located in Orlando. The Division routinely inspects and audits licensed real estate professionals to ensure compliance with rules and regulations. It determines if complaints made against licensees should be investigated for alleged violation.

10

F.S.455.2273 requires licensing agencies to adopt

guidelines under which disciplinary actions may be imposed on those persons and entities under their jurisdiction.
Administrative complaints must be filed within 5 years of the time of the act giving rise to the complaint, or within 5 years from discovery of the act with due diligence.

11

Licensees Must Report Convictions

All licensees are required to report to the Department within 30 days of being convicted or found guilty of, or having pled nolo contendere or guilty to a crime in any jurisdiction. Licensees who fail to report this information are subject to disciplinary action. Completion of the “Criminal Self-Reporting Document” must be mailed to the Department. Failure in doing this can result in suspension to revocation and an administrative fine of $500 to $2,500 (for first offenses) or $1,000 to $5,000 (for subsequent offenses).

12

Breach of trust

when a broker violates their duties to the principal in an agency relationship.

13

Concealment

when a broker fails to disclose information to a party, to whom the broker has such a duty, and that is material to his or her decision.

14

Conspiracy

when a broker forms a scheme or design with another person with the intent to defraud a third party.

15

Conversion

when a broker uses the funds or other property that belongs to another for his or her personal or personal business use.

16

Culpable Negligence

if a broker operates in a reckless, careless, and excessively negligent manner. Can be held legally accountable.

17

Failure to account

is a form of conversion that occurs when a broker is required to produce money or property that belongs to another in the normal course of business and either cannot or will not produce the money or property.

18

False or misleading advertising

no one may disseminate or cause to be disseminated any false or misleading information by any means for the purpose of offering for sale, lease, or rent any real estate located in this state.

19

Filing false documents

occurs if a broker clouds the title to real estate by filing false, void, or unauthorized documents in the public record such as liens, contracts, or deeds. The broker is guilty of fraud.

20

Misrepresentation

is the misstatement or omission of facts. Misrepresentation can lead to fraud if statements are intentional and relied upon. Misrepresentation of value by a licensee could be considered fraud and might lead to breach of contract or breach of trust. Misrepresentation also includes exaggeration in an opinion of value.

21

Moral turpitude

is conduct that is considered contrary to standards of justice, honesty, or good morals. The idea of inherent baseness or depravity in the private social relations or duties owned by man to man or by man to society. The courts also held crimes such as bookmaking or selling fake licenses as crimes of moral turpitude.

22

Rendering an opinion of title

could be considered as practicing law, which is beyond the scope of a real estate license. If a question relating to the title of property arises, a broker is required by law to advise a prospective purchaser to obtain title insurance or to insist upon procure an abstract and obtain an attorney’s title opinion.

23

Promise to resell

when a broker makes a promise to resell or repurchase property at a future date. The broker must abide by the promise or be guilty of fraud.

24

Properties with liens

the broker must inform a prospective buyer of any liens against the property prior to the payment of any portion of the sales price. It is fraudulent and dishonest dealing for a broker to offer a property knowing that the title is un-merchantable.

25

Using Lotteries

a broker who uses lotteries or trading schemes that involves the selling of certificates or chances to induce any person to buy real estate is guilty of fraud. Contests where no purchase is required may be permissible.

26

Range of penalties from lowest to highest

1. Reprimand
2. Administrative fine
3. License suspension
4. License revocation or denial

27

Reprimand

criticism from the Commission that notes that the conduct of the licensee is not considered satisfactory. May be given with or without a letter of guidance that advises the licensee.

28

Administrative fine

may be imposed by the Commission for violations of laws or rules. The maximum administrative fine per violation of F.S. 475 is $5,000.

29

Probation

a conditional arrangement in which the Commission allows a licensee to continue to practice real estate service if the licensee completes specified requirements. The term of probation is 90 days, unless otherwise stated.

30

License Suspension

considered to be a temporary penalty. The Commission may suspend the license for a maximum period of ten years. The seriousness of the violation determines the length of suspension. A second suspension for a violation can result in revocation of a real estate license.