1027 DOS 09
STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
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In the Matter of the Complaint of
DEPARTMENT OF STATE
DIVISION OF LICENSING SERVICES,
Complainant, DECISION
-against-
TILMAN BRYANT and MJ MADISON REALTY
GROUP LLC,
Respondents.
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The above noted matter came on for hearing before the undersigned, Roger Schneier, on October 28, 2009 at the office of the Department of State located at 123 William Street, New York, New York.
Tilman Bryant having been advised of his right to be represented by an attorney appeared pro se.
The complainant was represented by staff attorney David Mossberg, Esq.
COMPLAINT
The complaint alleges that respondent Bryant improperly failed to determine with a rental which he brokered in a new building had a Certificate of Occupancy, retained an unearned commission, and co-brokered a real estate transaction with an unlicensed person.
FINDINGS OF FACT
1) Notice of hearing was served by certified mail (State’s Ex. 1).
2) At all times hereinafter mentioned Tilman Bryant was duly licensed as a Real Estate Broker representing MJ Madison Realty Group LLC. That license expired on May 16, 2009 and was not renewed (State’s Ex. 2).
3) In October 2008 Mr. Bryant showed Hilda Valdez a model apartment located in a newly constructed building located at 792 Sterling Place, Brooklyn, New York managed by New Start LLC (hereinafter “New Start”). Ms. Valdez liked the model apartment and agreed to rent apartment 4M in the building for a two year term commencing on November 1, 2008 (State’s Ex. 3). On October 21, 2008 she paid Mr. Bryant a brokerage commission of $1,872.00 cash (State’s Ex. 4), half of which Mr. Tilman shared with one Larry Tate, a person whom he had met in a real estate brokerage office and who had assisted in the rental, but with whom he had not previously dealt and whom he incorrectly believed to be a licensed as a Real Estate Salesperson or Broker (State’s Ex. 5 and 6).
4) Ms. Valdez moved into the apartment, only to discover that there was no heat or hot water and, because the building had not yet been granted a Certificate of Occupancy, utilities could be turned on. That situation persisted, and she moved out by the end of the year. A temporary Certificate of Occupancy was issued on March 23, 2009 (State’s Ex. 7).
5) Mr. Bryant did not inquired about a Certificate of Occupancy for the subject building prior to offering apartments in it because he had previously rented newly constructed apartments for New Start, which assured him that rentals could proceed, and had not experienced any problems with those previous rentals.
6) Ms. Valdez asked Mr Bryant to refund her commission, but he refused. He offered to find her another apartment for no fee, but she did not accept that offer.
OPINION AND CONCLUSIONS OF LAW
I- The expiration of the respondents’ license does not deprive the Tribunal of jurisdiction over actions which occurred when the license was in effect. Albert Mendel & Sons, Inc. v N.Y. State Department of Agriculture and Markets, 90 AD2d 567, 455 NYS2d 867 (1982); Main Sugar of Montezuma, Inc. v Wickham, 37 AD2d 381, 325 NYS2d 858 (1971).
II- When Mr. Bryant agreed to assist Ms. Valdez in renting an apartment he became her agent. The relationship of agent and principal is fiduciary in nature, "...founded on trust or confidence reposed by one person in the integrity and fidelity of another." Mobil Oil Corp. v Rubenfeld, 72 Misc.2d 392, 339 NYS2d 623, 632 (Civil Ct. Queens County, 1972). Included in the fundamental duties of such a fiduciary are good faith and undivided loyalty, and full and fair disclosure. Such duties are imposed upon real estate licensees by license law, rules and regulations, contract law, the principals of the law of agency, and tort law. L.A. Grant Realty, Inc. v Cuomo, 58 AD2d 251, 396 NYS2d 524 (1977). The object of these rigorous standards of performance is to secure fidelity from the agent to the principal and to insure the transaction of the business of the agency to the best advantage of the principal. Dubbs v Stribling & Assoc., 96 NY2d 337, 728 NYS2d 413 (2001); Department of State v Short Term Housing, 31 DOS 90, conf'd. sub nom Short Term Housing v Department of State, 176 AD 2d 619, 575 NYS2d 61 (1991); Department of State v Goldstein, 7 DOS 87, conf'd. Sub nom Goldstein v Department of State, 144 AD2d 463, 533 NYS2d 1002 (1988).
III- Ms. Valdez retained Mr. Bryant to assist her in renting an apartment in which she could legally reside, something which he failed to accomplish. Mr. Bryant knew that he was dealing with new construction, yet he neglected to inquire as to the status of the Certificate of Occupancy. While there is no evidence of any ulterior motive on his part, his failure to make such an inquiry was a demonstration of incompetency. Then, when he learned that the building was not ready for occupancy and that Ms. Valdez had to move out, he refused to refund her the commission which she had paid because, he testified, he believed that he had done what he had been paid for. That refusal was a further demonstration of incompetency, as well as a demonstration of untrustworthiness. His offer to assist Ms. Valdez in finding another apartment without an additional fee does not lessen his wrongdoing, as Ms. Valdez had paid him for locating a specific apartment and had no obligation to consider any other locations.
IV- It is unlawful for a Real Estate Broker to share a brokerage commission with an unlicensed person. Real Property Law §442. Mr. Bryant violated that statute when he shared the commission paid by Ms. Valdez with Larry Tate. While Mr. Bryant may have thought, as he testified, that Mr. Tate was licensed because he met him in a fully staffed brokerage office, that belief does not excuse the violation. He made no effort to confirm Mr. Tate’s status as a licensee, which he could have easily done by asking to see his license or by doing a license search on the Department of State’s web site.
V- Where a Broker has received or retained money to which he is not entitled, he may be required to return it, together with interest, as a condition of retention of his license. Donati v Shaffer, 83 NY2d 828, 611 NYS2d 495 (1994); Kostika v Cuomo, 41 N.Y.2d 673, 394 N.Y.S.2d 862 (1977); Zelik v Secretary of State, 168 AD2d 215, 562 NYS2d 101 (1990); Edelstein v Department of State, 16 A.D.2d 764, 227 N.Y.S.2d 987 (1962). Thus, Mr. Bryant may be required to make such a refund to Ms. Valdez, and he is not entitled to a set-off for the part of the commission which he unlawfully shared with Larry Tate.
VII- In setting the penalty for Mr. Bryant’s violations I have taken into consideration the lack of any apparent venal intent on his part.
DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT Tilman Bryant violated Real Property Law §442 and demonstrated untrustworthiness and incompetency, and accordingly, pursuant to Real Property Law §441-c, should he ever apply for a license as a Real Estate Broker or Salesperson such license shall not be granted until he has produced proof satisfactory to the Department of State that he has refunded $1,872.00 plus interest from October 21, 2008 at the legal rate for judgements (currently 9% per year) to Hilda Valdez and until he has paid a fine of $1,000.00 to the Department of State.
Roger Schneier
Administrative Law Judge
Dated: November 2, 2009