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Complaint, Investigation and Hearing Procedure for Real Estate Licensees

Terms in this set (19)

Anyone can file a complaint with the Department against a licensee. A complaint is filed with the Department of Business and Professional Regulation. If the complaint is in writing and signed by the complainant, the DBPR is charged with the responsibility of investigation. When the investigation is complete, it is the responsibility of the FREC to determine the guilt or innocence of a licensee or potential licensee.
The DBPR may also investigate on its own or investigate an anonymous complaint if the circumstances dictate (meaning that an immediate danger to the public exists). A complaint must be legally sufficient to be investigated. This means that the complaint must allege that a violation of Florida Statute, DBPR rule or FREC rule has occurred. Occasionally, a complaint may be withdrawn by the person making the original charges: the DBPR may stop the investigation or may pursue it and the Commission will take appropriate action. If criminal activity is suspected, the Department may proceed with the investigation without notifying anyone who is under investigation.
In some cases for a minor violation the Department may issue a Notice of Noncompliance for a first time offense, providing that this offense does not endanger the public. If the violation is not corrected or the licensee does not comply in a timely manner, a Citation is issued with a fine, if warranted. If the violation is not listed in the citation rules, disciplinary hearings will proceed. (See screen 14 for more information on Citations and citation rules.)
A summary suspension is an emergency suspension order. It is issued by the Secretary of the DBPR when the public is in immediate danger from the actions of the licensee. The suspension must be followed by action by the FREC.
Violations of Ethics do not fall under the DBPR's investigation criteria (this is settled by the local association of REALTORS®) nor do items which are considered to be scruples or morals as they cannot be enforced either. Suffice it to say, a Law or Rule must have been violated.
Two members of the FREC are appointed by the Chairperson to review the investigator's report and receive the investigation of the DBPR. Only one of the FREC can be a lay member (one of the non-licensed members of the Commission) of the two and it may include the Chairperson or Vice Chairperson. The panel could also include former commissioners, with one of the panel being current. All the information obtained is considered confidential until 10 days after probable cause is found.
These two members act as a grand jury: they determine if they believe there is a law violation- not guilt or innocence. They must act in a 30 day period. They recommend whether to take further action or dismiss the case to the DBPR. Other members of the FREC do not attend these hearings since they will be called upon at a later date to make judgment on the case if it advances. The hearing is not open to the public and its only purpose is to decide if a probable cause (a law violation) has occurred. The panel reviews all the evidence and listens to Department staff attorney's recommendations.
The panel is required to meet and make a decision within 30 days. If it does not meet within this time, the Department may make the decision.
If the panel does not believe probable cause exists, the Department has ten days to override the decision and file its own charges. The Department may also refer the case to the FREC and the FREC may obtain its own independent counsel and continue the investigation. If the panel does not believe probable cause exists, the panel may dismiss the case or it may issue a letter of guidance about the matter to the person charged.
If the panel believes there is probable cause, the panel tells the Department to file a formal complaint against the licensee. The licensee (with his legal counsel) is entitled to a formal or informal hearing.
The Real Estate Recovery Fund was designed to serve as consumer protection for those consumers who were harmed in a real estate transaction and who seek compensatory (compensation) damages. Punitive damages (punishment) are never awarded.
The fund is financed through money received from administrative fines and a surcharge on each new and renewing license. The maximum the fund can have is $1 million dollars and when it reaches that level, surcharges on licenses are suspended until the fund drops to $500,000 when the charge will again be levied. The surcharges are $3.50 per year for both the new and renewing license for brokers and $1.50 for the new and renewing sales associates' license. The FREC authorizes the funds to be disbursed by the State Treasurer.
To obtain the funds, a civil suit must be filed against a broker or sales associate claiming a violation of Chapter 475. The individual who has brought the lawsuit must claim that by reason of an act committed, as part of a real estate transaction, he suffered monetary damages. The suit goes to the civil courts of any competent civil jurisdiction in the state. Three things must have been in place at the time of the transaction:
the broker or sales associate must have held a valid, active real estate license at that time,
the broker or sales associate was neither the seller, buyer, landlord or tenant in the transaction; nor an officer or member of a corporation or partnership, a member of a limited liability company or a member of a limited liability partnership,
the broker or sales associate was acting solely in the capacity of a real estate licensee in the transaction.
The injured party is awarded a judgment. The assets of the licensee are first used to satisfy the judgment. A search of the assets must be done to offset or satisfy the judgment. The maximum that can be claimed is $50,000 per single transaction or a maximum of $150,000 for multiple transactions or the unsatisfied portion of the judgment, whichever is less. A notice by certified mail must be sent by the injured party to the FREC of the intent to file a claim against the Recovery Fund. The recovery fund does not pay for legal fees or for punitive damages against the licensee.
Once a payment has been made from the Real Estate Recovery Fund, the licensee's license is automatically suspended until full repayment to the fund has been made.