09-000441PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Anthony Alexander Status: Closed Recommended Order on Wednesday, August 26, 2009.

Summary: Petitioner proved that Respondent violated a Section 8 HAP Contract by entering into a verbal side agreement with a tenant to pay extra rent, and therefore engaging in dishonest dealings. Recommend revocation of license.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-0441PL

)

ANTHONY ALEXANDER, )

)

Respondent. )

)

RECOMMENDED ORDER

A final hearing was held before Daniel M. Kilbride,

Administrative Law Judge, of the Division of Administrative

Hearings, between Orlando and Tallahassee, Florida, by video

teleconference on June 2, 2009.

APPEARANCES

For Petitioner: Jennifer Leigh Blakeman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite N-801

Orlando, Florida 32801

For Respondent: Anthony Alexander, pro se

1135 Calanda Avenue

Orlando, Florida 32807

STATEMENT OF THE ISSUE

Whether Respondent committed fraud, misrepresentation,

concealment, false promises, false pretenses, dishonest dealing

by trick, scheme or device, culpable negligence, or breach of

trust in any business transaction as alleged in the

Administrative Complaint in violation of Subsection

475.25(1)(b), Florida Statutes (2006). 1

PRELIMINARY STATEMENT

On or about November 26, 2008, Petitioner filed a one-count

Administrative Complaint against Respondent alleging that

Respondent violated the statute set forth above. Respondent

denied the essential factual allegations and requested an

administrative hearing. This matter was then referenced to the

Division of Administrative Hearings (DOAH) for a formal hearing.

The final hearing was originally scheduled for March 23,

2009. The final hearing was continued to June 2, 2009, upon

Respondent’s Motion. The final hearing was held on June 2,

2009. At the hearing, Petitioner called three witnesses:

Investigator Debbie C. Terry, Jacqueline Danzer and Lois Henry.

Petitioner also offered nine exhibits into evidence. Exhibits 1

through 5, 8, and 9 were admitted in their entirety, and the

first two pages of Exhibit 6 were admitted. Official

recognition was taken of Chapters 120 and 475, Florida Statutes.

Respondent testified in his own behalf, but offered no

additional exhibits.

A two-volume Transcript was filed on June 19, 2009. Each

party was advised at the hearing that they could submit proposed

findings of fact and conclusions of law within ten days of the

filing of the transcript. Petitioner filed its proposal on

June 25, 2009. Respondent has not filed his proposal as of the

date of this Recommended Order.

FINDINGS OF FACT

1. Petitioner is the state agency charged with the

responsibility and duty to prosecute administrative complaints

pursuant to Section 20.165 and Chapters 120, 455 and 457,

Florida Statutes.

2. Petitioner has jurisdiction over disciplinary

proceedings before the Florida Real Estate Commission (FREC) and

is authorized to prosecute administrative complaints against

licensees within FREC’s jurisdiction.

3. At all times material, Respondent was a licensed

Florida real estate broker, license number 684990, under

Chapter 475, Florida Statutes.

4. The last license issued to Respondent was as a broker

at Florida’s Best Buy Realty & Mortgage Lender, LLC, Post Office

Box 551, Winter Park, Florida 32793.

5. On or about February 15, 2007, Respondent entered into

a contract to manage the single-family dwelling owned by

Jacqueline Danzer. The property is located at 2979 Krista Key

Circle, Orlando, Florida 32817 (Subject Property). The

agreement was for the period February 15, 2007, until

February 15, 2008.

6. Respondent was authorized, under the management

agreement, to seek a tenant for the property. Said management

agreement authorized Respondent to be compensated at the rate of

10 percent of the rent due during each rental period.

7. On or about March 27, 2007, Respondent negotiated a

lease agreement with Veronica Valcarcel to rent the Subject

Propery.

8. The tenant applied through the federal Section 8

program, administered by the Orange County Housing and Community

Development Division (Agency), for rental assistance in order to

rent the Subject Property.

9. Section 8 assists low-income families with their rent.

A tenant who qualifies for Section 8 assistance is prohibited

from paying more than 40 percent of his or her income for rent

and utilities.

10. On April 26, 2007, Respondent, acting on behalf of the

landlord for the Subject Property, entered into and signed a

Agency as part of the Section 8 program. The HAP contract

provided that for the initial lease term for the Subject

Property (for the period April 1, 2007, until March 31, 2008),

the initial monthly rent was $1,150 per month. This was

determined to be the maximum payment the tenant could pay

without exceeding 40 percent of her income.

11. The HAP contract explicitly provides in its terms that

“[d]uring the initial lease term, the owner may not raise the

rent to tenant.”

12. Respondent knew that he was prohibited from charging

more than the monthly rent stated in the HAP contract.

13. Respondent has had experience in the past with other

tenants who participated in the Section 8 program. Respondent

has previously signed other HAP contracts which contained the

same restrictive language.

14. Under the lease contract that the tenant Veronica

Valcarcel signed with the property owner Jacqueline Danzer, the

monthly rent would be $1,150 per month.

15. The signature page in the lease contract is not the

same page on which the monthly rental amount is written.

16. The property owner Jacqueline Danzer asserts that the

initials in the lease contract reflecting a monthly rental of

$1,150 were not all her initials.

17. Under the terms of the Exclusive Property Management

Agreement, Respondent was being compensated at the rate

of 10 percent per month after the first month.

18. A monthly rental amount of $1,500 indicates that the

property owner would receive a net of $1,350 per month.

19. The property management agreement provided that

Respondent would make payments to the property owner by direct

deposit.

20. The property management agreement lists a 12-digit

bank account number, with the last four digits of “6034,” into

which Respondent was to make direct deposits.

21. At the hearing, property owner Jacqueline Danzer

testified that she had received payments from Respondent for the

Subject Property to her Bank of America savings account, with

the account number ending in “6034.” The last four digits of

the account number on the Bank of America Statement match the

last four digits on the account number found on the Property

Management Agreement.

22. According to the Bank of America records, Respondent

made the following payments to the property owner:

a) $1,550 on May 9, 2007

b) $1,000 on May 9, 2007

c) $850 on June 12, 2007

d) $1,350 on July 11, 2007

e) $1,350 on September 10, 2007

23. On September 12, 2007, property owner, Jacqueline

Danzer went to see Lois Henry, the manager of the Section 8

department for the Agency. During the course of that meeting,

Dnazer advised that Respondent was collecting $1,500 a month

rent from the tenant instead of $1,150 a month.

24. On September 12, 2007, during the course of a

telephone conference with Jacqueline Danzer and Lois Henry,

Respondent admitted that he had been collecting $1,500 monthly

rent for the Subject Property, retaining a commission of $150

and depositing the balance in Danzer’s account.

25. Respondent denied making an admission during the

telephone conference on September 12, 2007. He also denied that

he was collecting $1,500 from the tenant, and further denied

that he was violating Section 8 regulations. Respondent’s

testimony is not credible.

26. The witness Danzer’s testimony is credible.

27. Petitioner has proven by clear and convincing evidence

that Respondent violated the Housing Assistance Payments

Contract.

28. The total amount of investigative costs for the

Petitioner for this case, not including attorney’s time, were

$874.50.

CONCLUSIONS OF LAW

29. DOAH has jurisdiction over the parties and subject

matter of this cause pursuant to Subsection 120.57(1) and

Sections 120.569 and 120.60, Florida Statutes (2008).

30. Petitioner is the state agency charged with regulating

the practice of real estate, pursuant to Section 20.165 and

Chapter 475, Florida Statutes.

31. The Florida Real Estate Commission is empowered to

revoke, suspend or otherwise discipline the license of a real

estate broker who is found guilty of any of the grounds

enumerated in Subsection 475.25(1)(b), Florida Statutes.

32. Petitioner has the burden to prove that relevant and

material findings of fact are supported by clear and convincing

evidence of record. Department of Banking and Finance v.

Osborne Stern & Company , 670 So. 2d 932 (Fla. 1996); Ferris v.

Turlington , 510 So. 2d 292 (Fla. 1987).

33. Subsection 475.25(1)(b), Florida Statutes, states in

pertinent part:

1. The commission . . . may place a

licensee . . . on probation; may suspend a

license, registration, or permit for a

period not exceeding ten years; may revoke a

license, registration, or permit; may impose

an administrative fine not to exceed $5,000

for each count or separate offense; . . .

if it finds that the licensee . . .

* * *

(b) Has been guilty of fraud,

misrepresentation, concealment, false

promises, false pretenses, dishonest dealing

by trick, scheme, or device, culpable

negligence, or breach of trust in any

business transaction in this state or any

other state, nation, or territory; has

violated a duty imposed upon her or him by

law or by the terms of a listing contract,

written, oral, express, or implied, in a

real estate transaction; has aided,

assisted, or conspired with any other person

engaged in any such misconduct and in

furtherance thereof; or has formed an

intent, design, or scheme to engage in any

such misconduct and committed an overt act

in furtherance of such intent, design, or

scheme. It is immaterial to the guilt of

the licensee that the victim or intended

victim of the misconduct has sustained no

damage or loss; that the damage or loss has

been settled or paid after discovery of the

misconduct; or that such victim or intended

victim was customer or a person in

confidential relation with the licensee or

was an identified member of the general

public.

34. Petitioner has presented clear and convincing evidence

that Respondent is guilty of violating Subsection 475.25(1)(b),

Florida Statutes.

35. The credible evidence is clear and convincing that at

the same time Respondent signed an agreement with the Agency, in

regard to a Section 8 HAP Contract with a monthly rental amount

of $1,150, he entered into a verbal side agreement with the

tenant that the rent for that same property would be $1,500 per

month. The mere fact that he had two different rental

agreements at the same time for the same rental property is

probative of dishonest dealings, violation of a contractual

duty, and conspiracy to engage in such misconduct.

36. In addition, the HAP contract was clear that the rent

could not be raised above $1,150 per month. The purpose of the

HAP Contract was that the rent would not go above 40 percent of

a tenant’s income. Anything above that amount would defeat the

purpose of the Section 8 program.

37. The clear and convincing evidence supports the fact

that Respondent was actually charging the tenant $1,500 a month

rent for the Subject Property.

38. Property owner Danzer’s testimony is credible that

Respondent told her the monthly rent would be $1,500 a month for

the Subject Property. Henry’s testimony is also credible that

Respondent confessed to her that he had been charging $1,500 a

month on September 12, 2007. The details of this phone

conversation on September 12, 2007, were corroborated by Danzer,

who was present at the time.

39. Additionally, the testimony of Danzer and Henry are

supported by Danzer’s bank records. For a monthly rent of

$1,500 with Respondent receiving 10 percent commission, Danzer

should have received $1,350. According to Danzer’s bank

records, she did receive a couple of payments in the amount of

$1,350, which is consistent with a $1,500 a month rental

payment.

40. There were no payments received by Danzer that were

consistent with an $1,150 per month rental figure.

41. Respondent misrepresented the amounts he was charging

for rent. To the property owner, he misrepresented how much the

Section 8 program was allowing him to charge for rent on the

property. To the Section 8 program, he misrepresented how much

rent he was actually charging the tenant.

42. In regard to the above-statutory prohibitions, the

Commission’s disciplinary guidelines are codified in Florida

Administrative Code Rule 61J2-24.001(1). These rules provide

that the usual penalty for committing fraud, misrepresentation

or dishonest dealing is revocation. The usual penalty for

committing concealment, false promises or false pretenses is a

three-to-five-year suspension and an administrative fine of

$1,000. The usual penalty for committing culpable negligence or

breach of trust is a $1,000 fine to a one-year suspension.

43. Although there was no evidence that Respondent had

been previously disciplined, Petitioner’s proof, being clear and

convincing, is therefore sufficient to justify the imposition of

a penalty within the range of those provided for in the above-

cited authority.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the Department of Business and

Professional Regulation, Florida Real Estate Commission, enter a

final order:

1. Finding Respondent guilty of violating Subsection

475.25(1)(b), Florida Statutes;

2. Revoking Respondent’s license, and imposing an

administrative fine of $1,000.00; and

3. Requiring Respondent pay fees and costs related to the

investigation in the amount of $874.50.

DONE AND ENTERED this 26th day of August, 2009, in

Tallahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of August, 2009.

ENDNOTE

1/ All references to Florida Statutes are to Florida Statutes

(2006), unless otherwise indicated.

COPIES FURNISHED :

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Thomas W. O’Bryant, Jr., Director

Division of Real Estate

400 W. Robinson Street, Suite 802N

Orlando, Florida 32801

S. W. Ellis, Chairman

Real Estate Commission

Division of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Florida 32801

Jennifer Leigh Blakeman, Esquire

Department of Business and

Professional Regulation

400 West Robinson Street, Suite 801N

Orlando, Florida 32801

Anthony Alexander

1135 Calanda Avenue

Orlando, Florida 32807

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.