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FREC COMPLAINTS/Users/adamp/Desktop/Stuff for FAR/Magazine Assets/OCT08/images/LawEthics
Defend Your Reputation

What you need to know if you’re investigated by the Florida Real Estate Commission (FREC).

“If there’s a FREC complaint, your firm needs to have a process for dealing with it,” says Daniel Villazon, former FREC counsel and now a principal at Daniel Villazon PA, a law firm in Celebration.

“Once a complaint has been filed, FREC complaint analysts determine whether there’s a basis for it,” explains Villazon. “There’s a basis if it involves a real estate licensee and a potential violation of the Florida Business and Professional Regulation Act.”

Responding to the Complaint
FREC will notify you that it’s investigating a complaint about you and provide a copy of the filings. “That’s all confidential,” says Villazon, “and that’s the best time to get an attorney and prepare a defense because if we can resolve the complaint without formal action, much of that information will stay confidential.”

You have 21 days to respond to the complaint, after which the investigator will prepare a report and submit it to the FREC legal department. “You’re entitled to receive the investigator’s report and make a rebuttal that must be presented to the probable cause panel,” explains Villazon. “The panel has three options. It can determine there’s nothing to the case and dismiss it, or it can issue a letter of guidance. Those two actions are confidential.” The third option is for the panel to file an administrative complaint alleging violations of the law. If that happens, within 10 days that information becomes public record.

Formal or Informal Hearing?
If you become the subject of an administrative complaint, you again have 21 days to respond. “You can dispute the facts and request an informal hearing,” explains Villazon. “Or you can dispute the facts and request a formal hearing, where the state has the burden of proving the facts by clear and convincing evidence.” If you don’t respond at all, you’re considered in default, and all the facts against you will be considered true. Then there will be a hearing to determine whether there’s been a violation of the law
and what the penalty will be.

“When I worked at FREC, I’d see people defending themselves and getting burned,” says Villazon. They just didn’t know their rights. You have to compare the cost of an attorney versus the cost of losing your license and livelihood or paying substantial fines.”

Permission to Market Listings a Must

Yvette chose a target market and sent to each house a newsletter with area events, recipes and a list of homes in the area that were for sale, pending and sold. Within days of her mailing, Yvette heard from a Realtor®, who said he was filing a complaint against Yvette with the local Realtor Association because she had advertised listings that didn’t belong to her or her broker. Yvette was stunned. She assumed every broker would want additional listing promotion though her newsletter. 

Why It’s a Violation: Unknowingly, Yvette violated the Realtors Code of Ethics Standard of Practice 12-4, which states that she must have authority to advertise other brokers’ listings, including those that are under contract.

Yvette should have contacted the listing brokers to seek permission to include their listings in her newsletter. While a property is under an exclusive listing, the listing broker controls the rights to advertise and market. 

The code (SOP 12-7) also has provisions for advertising sold or closed properties. Only Realtors who participated in the transaction as the listing broker or cooperating broker may claim to have sold the property. 

However, Yvette could have run an item in her newsletter called, “Recently Sold,” provided that she didn’t state that her firm had listed or sold the properties. If she did run a recently sold column, as suggested in Case 12-13 in the NAR Code of Ethics and Arbitration Manual, Yvette should have included a statement, “Properties have been listed and sold by various MLS participants and were taken from the Sugartown MLS from Jan. 1 through Sept. 30, 2008.”