FREC cases Archives - Demetree School of Real Estate

Florida Sales Associate License Revoked For Property Management Violations

At a recent FREC meeting, Case 2025-078209* was an interesting case that I enjoyed listening to.

The Facts Of the Case

Katie, the homeowner, signed an Exclusive Right to Lease Listing Agreement with Agent Brad. The agent found a tenant, and was paid a commission for finding the tenant. The commission was paid to Brad’s broker who then paid Brad. All good so far.

A lease was signed between Agent Brad and the tenant. The actual property owner never even signed the lease. It lists Agent Brad as the landlord/property manager. The lease states that Agent Brad will manage the property. Brad’s broker was unaware of this property management agreement. Because this arrangement was not through the brokerage, Brad is acting as a broker without a license.

It gets worse. The tenant paid a $2,100 security deposit. Brad did not properly put the security deposit in the broker’s escrow account. Instead, he put it in his personal account. Now Brad is also mishandling escrow money. There are very specific laws about handling residential security deposits. These laws apply to all landlords and tenants, not just licensees.

A month later, Brad’s real estate license was suspended for failing to pay child support.

Ultimately, Katie, the owner, was unable to get the rent or security deposit from Brad. That is the point where she filed a complaint with the DBPR.

Brad was charged with acting as a broker without a license. Also charged with collecting monies not in the name of his employer.

His license was revoked, a fine of $3,000 plus the investigative cost of $412.50 paid within 90 days.

Sales Associates Cannot Practice Property Management On Their Own

Real estate agents dabbling in property management is a major problem in Florida. It is legal for an agent to manage their own real estate property. It is also legal for a real estate agent to manage property on behalf of another person, if it is done through their broker. It is even legal for a property owner to hire someone to manage their property and pay them a salary.

What’s not legal is to manage property on behalf of another person for commission – without going through the broker. That’s what happened in this case.

Respond To Complaints in a Timely Manner

Another thing that happened, which is too common, is that Agent Brad took 10 days to respond to the complaint. He said the email went into his spam account. The DBPR uses email to communicate with licensees. Be sure your email is correct. Check your spam as well. This is one email that you don’t want to ignore.

Be Sure To Stay Up To Date On Child Support

The last thing that was a learning opportunity from this case is that Agent Brad’s license was suspended for about seven months because he failed to pay child support. A lot of people don’t realize that this can happen. Pay your child support if you owe it.

It’s unfortunate that Agent Brad got his license revoked, although I believe that FREC made the correct call. If Brad wanted to handle transactions outside of his brokerage, he could get his own broker’s license and own his own small brokerage. That way, he could do things the way he wanted to and keep the entire commission. It’s also unfortunate that this consumer lost money in the transaction. Hopefully, they will be able to recover it through the court system.

*The case number is accurate. Names of people and brokerages have been changed. The goal is education, not embarrassment. If you want more details about the case, the case number is accurate, so you can request the information from the DBPR.

Please note that Karen Climer has no affiliation with Climer School of Real Estate. Her father, Ron Climer, sold Climer School of Real Estate in 2014. It has since been involved in several mergers and acquisitions and is owned by a large investment company. Karen owns Demetree School of Real Estate in Orlando, Florida.

Sales Associate Punished By FREC For Listing A House

Sales Associate David* was registered with Old Brokerage. He decided to leave that brokerage and move to New Brokerage.

Before David left, but once he had made the decision to leave Old Brokerage, a former client contacted him about listing his house. Naturally, David wanted to secure the listing.

David signed a listing agreement with New Brokerage two days before they were registered as his employer. The property was not listed in the MLS until after he was registered with New Brokerage.

To reiterate, here is the timeline…

David is with Old Brokerage.
David plans to move to New Brokerage, but hasn’t move yet.
Client contacts David and signs a listing agreement.
David uses New Brokerage as the name on the listing agreement.
Two days later, David transfers his license from Old Brokerage to New Brokerage.
David lists property in the MLS under New Brokerage.

David was charged with operating as a sales associate other than with his registered broker. He was fined $250, the $594 cost of the investigation, and must take a three-hour ethics class. The three-hour ethics class does not count towards any continuing education. It is in addition to his required C.E.

In prelicensing class, when I talk about cases like this, people often say, “Who would file a complaint like that?” It’s simple – just follow the money. The broker at Old Brokerage is the one who filed the complaint. This broker was losing out on a commission, so he filed a complaint. Was there more to it than the money? I don’t know.

At the FREC meeting, David’s attorney mentioned that the Old Broker and David had settled regarding the commission. They split it 50-50. FREC cannot order one party to pay the other party. The Florida Real Estate Commission can issue a fine, but that money goes to the state of Florida.

So David’s real punishment was paying $844 to the state, hiring an attorney, taking some classes, and the time and emotion involved in this. Plus he lost half of the commission to Old Broker. It is unknown whether the broker of Old Brokerage also filed a Realtor complaint.

Ideally, David could have waited to sign the listing agreement until he was actually registered with New Brokerage. Maybe that wasn’t feasible, for some reason. If David had attended my class on How To Make The Best Deal With Your New Broker, his employment contract with Old Brokerage would discuss abandoned listings, and the terms would be favorable to David.

I attend the FREC meetings almost every month. There is at least one interesting case per month. I’m going to start to write more about them.

*The names of licensees and brokerages have been changed. My goal is education, not embarrassment. The actual case number is DBPR 2021-056033. For those interested in learning more, you can look it up and get the full information.