1. Florida Real Estate Principles, Practices & Law 39th Edition
Unit 6: Violations of License Law, Penalties, and Procedures

2. Legal Terms to Know Breach of trust Commingle Concealment Conversion
Breaking of a promise
Commingle
To mix money
Concealment
Withholding information
Conversion
Licensee’s use or misuse of client (or customer) monies
Culpable negligence
Failing to use care or attention to duties

3. More Legal Terms Failure to account for and deliver Fraud
Failing to pay money to the person entitled to it
Fraud
Intentional deceit
Material fact
Relevant information
Misrepresentation
Untrue statement
Moral turpitude
Conduct contrary to honesty or good morals
Crimes including embezzlement, larceny, and robbery

4. Complaint Process (Overview)
A complaint is filed
Investigation of the complaint
Probable cause determination
Formal complaint is issued
Informal or formal hearing is conducted
Final order is issued
Judicial review (appeal) of final order

5. Step 1: Filing the Complaint
An alleged violation of law or rule
Uniform Complaint Form - DBPR
Legally sufficient if a violation of
Florida statute
DBPR rule
FREC rule

6. Anonymous Complaints
DBPR may investigate anonymous complaints or one made by a confidential informant provided
The complaint is in writing and legally sufficient
Alleged violation is substantial
The DBPR has reason to believe the alleged violations are true

7. Step 2: Investigation Complainant
Person who files the complaint
Copy of complaint sent to the subject of investigation
Licensee may submit a written response
DBPR conducts investigation
DBPR issues an investigative report
Submit report to the probable-cause panel
The complaint and information obtained during investigation is confidential until 10 days after probable cause is found

8. Summary Suspension
If investigation reveals public is endanger, the DBPR or FREC may decide not to allow licensee to continue to work during the disciplinary process
DBPR Secretary can issue a summary suspension (also called emergency suspension)

9. Step 3: Probable Cause Reasonable grounds for prosecution
Probable Cause Panel
2 FREC members
1 current member and 1 professional member
“Grand jury” arrangement
Determination, by majority vote, as to whether probable cause exists
Complainant and subject of complaint are sent written notification of outcome
May dismiss the case or dismiss with a letter of guidance

10. Step 4: Formal Complaint
Formal (Administrative) Complaint
Probable cause exists
DBPR files a formal complaint
Outline of facts and charges against the licensee
Copy sent to sales associate’s broker
Licensee is also sent an Election of Rights

11. Election of Rights Respondent is entitled to
Not dispute the allegations and waive the right to be heard
Dispute the allegations and request a formal hearing
Not dispute the allegations and request an informal hearing
Respondent may agree to a stipulation

12. Settlement Stipulation
Licensee-respondent can meet with a DRE attorney prior to a hearing to discuss a settlement
Stipulation is an agreement as to the facts of the case and the penalty reached
Stipulation must be approved by FREC

13. Voluntary Relinquishment for Permanent Revocation
Used to avoid a disciplinary hearing
Licensee relinquishes the license in lieu of discipline

14. Step 5: Informal or Formal Hearing
Informal Hearing
No disputed facts
Licensee presents case to the FREC at a Commission meeting
The FREC (probable cause panel excused) decides the case and imposes the penalty
No response to formal complaint – waived rights to be heard

15. Formal Hearing Licensee may request a formal hearing
Formal hearing required if there are disputed facts
F.S. 120
Division of Administrative hearings
Administrative law judge

16. Recommended Order Submitted by administrative law judge
Findings of fact
Conclusions of law
Recommended penalty (in accordance with the FREC’s range of penalties)

17. Step 6: Final Order FREC issues the final order
Final decision as to innocence or guilt and penalty
Probable cause members are excused
FREC considers law judge’s report and recommended order and filed exceptions
Copy mailed to all parties

18. Step 7: Judicial Review (Appeal)
Licensee may appeal the order
30 days to file appeal
Filed with the DBPR and the district court
Licensee may request stay of enforcement (stops enforcement of a suspension or revocation in final order pending appeal)
To obtain a stay court issues a writ of supersedeas (supersedes the FREC order licensee continues to practice until appeal is heard)

19. Types of Penalties Administrative penalties (FREC)
Civil penalties (court)
Criminal penalties (court)

20. Administrative Penalties
Denial of an application (or refusal to renew)
Letter of reprimand or guidance
Administrative fine up to $5,000
Suspension (up to 10 years)
Revocation
Probation while completing terms of penalty

21. Revocation Without Prejudice
In the case where a license was issued through an error of the FREC or DBPR
If the license is later revoked, such action will not be held against any later application for licensure

22. Notice of Noncompliance
Issued for a first-time offense of a minor violation established by rule
Does not result in economic or physical harm to a person
15 days to take corrective action
Failure to timely comply with the notice of noncompliance results in a citation or disciplinary proceedings

23. Citation Issued by DBPR/DRE for minor violations
30 days to accept/reject alleged violation
No action – case closed
File written objection within 30 days
Penalty – fines $100 to $500

24. Criminal Penalties Criminal penalties are issued in a court of law
FREC must report criminal violations to state attorney’s office

25. Third-Degree Felonies
Falsifying an application
Unlicensed practice of real estate
Theft of license exam
Fine up to $5,000 per count
Referred to state attorney’s office

26. First-Degree Misdemeanor Penalty
Failing to provide accurate and current rental information for fee
Penalty is a fine of up to $1,000 and/or up to one year in jail

27. Second-Degree Misdemeanors
Criminal violations of F.S. 475 are second degree misdemeanors (except 3 third-degree felonies and 1 first-degree misdemeanor)
Criminal fine maximum of $500 and/or
60 days imprisonment
Issued by a court of law

28. Real Estate Recovery Fund
To compensate for monetary (compensatory) damages as a result of an act committed by a licensee
Must be an active licensee acting as a licensee
Plaintiff awarded a judgment and attempted to collect
Claim made within 2 years of the act or discovery of the act (maximum 4 years)

29. Monetary Limits of Claims
Maximum amount paid from fund
$50,000 per transaction
$150,000 against one licensee
Amount of the fund
Funded by license fees and fines
Additional license fee charged if fund drops below $500,000
Additional fee dropped when fund reaches $1,000,000

30. Mandatory Suspension
Licensee’s license is suspended upon payment of money from the fund
License will not be reinstated until fund is repaid with interest

31. Claim Resulting From an EDO
When a broker is sued for complying with an EDO
FREC authorized to reimburse broker for amount of judgment against broker up to $50,000
No disciplinary action against broker
Broker must notify FREC of the court case and diligently defend in court the disputed actions concerning transaction
FREC may reimburse broker reasonable attorney fees and court costs

32. Money Paid From Recovery Fund
Only compensatory damages may be paid from the fund
Claims for punitive damages, triple damages, or interest will not be paid from the fund

33. Individuals Who Cannot Make A Claim
Spouse of offending licensee
Licensee who acted as single agent or transaction broker in subject transaction
Claim filed against licensee who was owner of the property
Claim against a licensee who did not have a valid or current license
Claim against a brokerage entity