958 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-

REYNALDO A. CABRERA,

Respondent.

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The above noted matter came on for hearing before the undersigned, Roger Schneier, on October 7, 2009 at the office of the Department of State located at 123 William Street, New York, New York.

The respondent did not appear.

The complainant was represented by staff attorney David Mossberg, Esq.

COMPLAINT

The complaint alleges that the respondent Real Estate Broker: Retained an unearned commission; failed to provide agency relationship disclosure forms to the parties to a rental transaction; conducted business under an unlicensed name; relocated his business premises without properly notifying the complainant; and failed to cooperate with the complainant’s investigation.

FINDINGS OF FACT

1) Notice of hearing calendared for July 28, 2009 was served by certified and regular mail addressed to the respondent at both his current and his prior licensed business addresses and posted on April 23, 2009. The prior licensed address is the respondent’s home. The certified mailings and the regular mailing to the prior licensed address/home were returned by the Postal Service but the regular mailing to the current licensed address was not returned. In response to a July 20, 2009 request by the respondent the matter was adjourned to October 7, 2009 and a notice of adjournment was sent to the respondent by regular mail addressed to him at his current licensed business address (State’s Ex. 1). The notice of adjournment has not been returned.

2) From sometime prior to March 7, 2002 to March 7, 2004 the respondent was licensed

as a Real Estate Broker in his individual name at his home located at 248 Audubon Avenue, New York, NY. From March 7, 2004 to March 7, 2006 he was licensed as an Associate Broker associated with City Realty at 2112 Broadway, suite 309, New York, NY. From March 7, 2006 to March 7, 2008 he was licensed as a Real Estate Broker in his individual name at 659 West 179^th Street, New York, NY. Since March 8, 2008 he has been licensed as a Real Estate Broker in his individual name at 615 West 179^th Street, New York, NY (State’s Ex. 2).

3) As of December 3, 2008 there was no record of RC World Realty LLC , a domestic limited liability company with an address for service of process identical to the respondent’s current licensed address, the certificate for which was filed on November 29, 2005, being licensed as a Real Estate Broker from at least December 3, 2006 (State’s Ex. 2).

4) Sometime in 2007 the respondent assisted Altagracia Estrella in locating an apartment to rent in a legal two family house located at 3036 Kingsbridge Terrace, Bronx, NY 10463 (State’s Ex. 9). It was understood that the rental was contingent on the rental being approved for Section 8 subsidy.

Ms. Estrella gave the respondent a $1,300.00 security deposit, $1,300.00 rent, and a broker’s commission of $1,800.00, and he gave her a receipt on the letterhead of RC Worldwide Realty, LLC (State’s Ex. 4).

5) A lease for the apartment was executed by Ms. Estrella and the landlord, Robert S. Rubin (State’s Ex. 5). However, because the apartment did not pass the Section 8 inspection the transaction was cancelled. Ms. Estrella received a partial refund from the landlord but the respondent, in spite of having promised to do so (State’s Ex. 6), has not refunded the commission

6) The respondent never gave either Ms. Estrella nor Mr. Rubin an agency relationship disclosure form.

7) By letter dated December 3, 2008 License Investigator Monet Adams requested that the respondent provide her with a written statement confirming his prior oral statement to her that disclosure forms were not provided (State’s Ex. 7), but he failed to comply.

8) On October 4, 2008 the respondent relocated his office to 248 Audubon Avenue, New York, NY, but he failed to notify the complainant of that move until he sent a letter dated October 21, 2008 (not a change of address form or request for permission to relocate) to Investigator Adams (State’s Ex. 8). The tribunal was unaware of the move until the date of the hearing.

OPINION AND CONCLUSIONS OF LAW

I- The holding of an ex parte quasi-judicial administrative hearing was permissible, inasmuch as there is evidence that notice of the place, time and purpose of the hearing was properly served. Patterson v Department of State, 36 AD2d 616, 312 NYS2d 300 (1970);Roy Staley v Division of Licensing Services, 14 DOS App 01; Matter of the Application of Rose Ann Weis, 118 DOS 93.

II- The respondent was retained to assist Ms. Estrella in obtaining housing which was qualified for Section 8 subsidy. When it developed that the housing was not eligible for Section 8 subsidy he demonstrated untrustworthiness by failing to immediately return the commission which he had received from her.

III- Pursuant to Real Property Law §443 a Real Estate Broker or Salesperson must provide the owner or potential renter of a one to four family residential property with an agency relationship disclosure form at the first substantive contact with the owner or potential renter. The respondent failed to provide such a form to either Ms. Estrella or Mr. Rubin, thereby violating the statute and further demonstrating untrustworthiness and incompetency.

IV- A Real Estate Broker may do business only under the name in which he or she is licensed. Real Property Law §441[1][a]. Division of Licensing Services v Cucci, 65 DOS 95; Division of Licensing Services v Perry, 57 DOS 95; Division of Licensing Services v Morse, 12 DOS 95; Division of Licensing Services v Scala, 38 DOS 94; Division of Licensing Services v Feld, 147 DOS 93; Division of Licensing Services v Cruz, 8 DOS 93; Division of Licensing Services v Fishman, 153 DOS 92; Division of Licensing Services v Selkin, 47 DOS 92; Division of Licensing Services v Tripoli, 96 DOS 91; Department of State v Prater, 29 DOS 88; Department of State v Lombardo, 30 DOS 86. The respondent’s operation of his brokerage business under the name of an unlicensed LLC was a violation of RPL §441[1][a] and a further demonstration of incompetency and untrustworthiness. The fact of his operating under an unlicensed entity is also further grounds for a finding that he is not entitled to retain the commission from the subject transaction.

V- Pursuant to 19 NYCRR 175.20[d] a Real Estate Broker may not relocate his/her/its office without the prior approval of the Department of State. The respondent moved his office to Audubon Avenue without such prior approval. I find, therefore, that he violated the regulation and thereby further demonstrated incompetency.

VI - Real Property Law §442-e[5] states:

"The secretary of state shall have the power to enforce the provisions of this article and upon complaint of any person, or on his own initiative, to investigate any violation thereof or to investigate the business, business practices and business methods of any person, firm or corporation applying for or holding a license as a real estate broker or salesman, if in the opinion of the secretary of state such investigation is warranted. Each such applicant or licensee shall be obliged, on request of the secretary of state, to supply such information as may be required concerning his or its business, business practices or business methods, or proposed business practices or methods."

Pursuant to RPL §442-j the Secretary of State has the authority to delegate to employees of the Department of State the above powers to compel a licensee to supply information. The respondent failed to respond to the complainant’s request for a written statement regarding his failure to provide agency relationship disclosure forms, and thereby further demonstrated untrustworthiness.

VII- Where a Broker has received 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).

DETERMINATION

WHEREFORE, IT IS HEREBY DETERMINED THAT Reynaldo A. Cabrera has violated Real Property Law §§441[1][a] and 443, and has demonstrated untrustworthiness and incompetence, and accordingly, pursuant to Real Property Law §441-c, he shall pay a fine of $2,000.00 to the Department of State on or before October 30, 2009, and should he fail to pay the fine his license as a Real Estate Broker, UID #35CA0832067, shall be suspended for a period commencing on October 31, 2009 and terminating three months after the receipt by the Department of State of his license certificate and pocket card. Upon payment of the fine or termination of the suspension in lieu thereof his license shall be further suspended until he has produced proof satisfactory to the Department of State that he has refunded the sum of $1,800.00 plus interest from January 1, 2008 at the legal rate for judgements (currently 9% per year) to Altagracia Estrella. He is directed to send a certified check or money order for the fine, or his license certificate and pocket card, and proof of payment to Ms. Estrella, by certified mail addressed to Norma Rosario, Department of State, Division of Licensing Services, P.O. Box 22001, Albany, New York 12201-2201.

Roger Schneier

Administrative Law Judge

Dated: October 7, 2009