2050 DOS 07
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-
CELINDA IABONI, Real Estate Broker,
and MARK 1027, INC.
Respondents.
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The above noted matter came on for hearing before the undersigned, Patrice M. Le Melle, on October 10, 2007 at the office of the Department of State located at 123 William Street, New York, New York.
The respondent failed to appear.
The complainant was represented by Attorney Trainee Davis Mossberg.
COMPLAINT
The complaint alleges that the respondents executed an improper agency disclosure form and improperly retained a commission for the lease of an apartment.
FINDINGS OF FACT
1) Notice of hearing together with a copy of the complaint was served by certified mail addressed to the respondents at their last known business address and posted on September 18, 2007 (State’s Ex. 1 and 2). I take official notice that there does not appear to be a return receipt from the post office in the file nor does it appear that the certified mailing was returned by the post office.
2) Since March 1, 2005 through March 1, 2007, Celinda Iaboni has been duly licensed as a Corporate Real Estate Broker representing Mark 1027, Inc., at a business address of 106 Southern Boulevard, Hauppauge, New York 11788. She renewed this license following a late renewal application, for a period commencing June 30, 2007 through June 30, 2009 (State’s Ex. 3).
3) On November 3, 2006, Tracey Cox filed a complaint with the complainant against the respondents. The nature of the complaint was as follows: In August, 2005, Ms. Cox requested that the respondents assist her in locating a house or apartment to lease. On August 20, 2005, the respondents executed a written agency disclosure form with Ms. Cox which erroneously identified her as “agent for the seller/landlord”. The respondents then contacted the listing agent, ReMax One, regarding a house that Ms. Cox subsequently agreed to lease. In addition to the monthly rental fee of $1,600, Ms. Cox signed a brokerage agreement that provided for payment of the brokers’ commission to “ReMax One/ Mark 1027" in the amount of $1,600. The agreement stated the commission was due and payable on the date the landlord signed that agreement (State’s Ex. 4 and 5).
4) After a period of time, the landlord determined that Ms. Cox was unable to pay the deposit and the advance rent so the landlord cancelled the agreement and no lease was signed by the parties and the landlord never signed the brokerage agreement (State’s 5).
5) ReMax One subsequently returned their portion of the commission, $800, to Ms. Cox and Ms. Cox obtained a money judgement against the landlord for return of her deposit in the amount of $1,600 pursuant to an arbitration proceeding. The respondents have refused to refund to Ms. Cox their portion of the commission in the amount of $800 (State’s Ex.4, 6 and 7) .
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. Real Property Law §441-e; 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- Being an artificial entity created by law, Mark 1027, Inc. can only act through it officers, agents, and employees, and it is, therefore, bound by the knowledge acquired by and is responsible for the acts committed by its representative broker, Ms. Iaboni, within the actual or apparent scope of her authority. Roberts Real Estate, Inc. v Department of State, 80 NY2d 116, 589 NYS2d 392 (1992); A-1 Realty Corporation v State Division of Human Rights, 35 A.D.2d 843, 318 N.Y.S.2d 120 (1970); Division of Licensing Services v First Atlantic Realty Inc., 64 DOS 88; RPL § 442-c.
III- Pursuant to Real Property Law §443 a real estate broker is required to provide a prospective buyer or tenant of real property with an agency relationship disclosure form in a statutorily mandated format and containing statutorily mandated information. That form must accurately describe the nature of the agency relationship. In the subject transaction, the respondents completed a disclosure form which was erroneous and by providing such a form to Ms. Cox, the respondents violated that statute and demonstrated untrustworthiness.
IV- “It is, of course, fundamental that in the absence of an agreement to the contrary, a broker is entitled to his commission when he produces a buyer ready, willing and able to purchase on terms acceptable to the seller (citations omitted).” Graff v. Billet, 101 AD2d 355, 475 NYS2d 122, 122 (2nd Dept. 1984), aff’d 64 NY2d 899, 487 NYS2d 733; AA Premier Realtu, Ltd. v. Cotillion Terrace, Inc., 294 AD2d 383, 741 NYS2d 734 (2nd Dept. 2002).
The terms of the brokerage agreement dictated that the commission was earned when the landlord signed that agreement. When the landlord cancelled the arrangement without having signed that brokerage agreement, the fee paid to the respondents became unearned commission. By refusing to refund her portion of the commission, the respondents collected an unearned commission and thereby demonstrated untrustworthiness. Where a broker or salesperson 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). Therefore, the respondents’ retention of their license as a corporate real estate broker may be conditioned upon their refunding $800 to Ms. Cox.
V- In setting the penalty for the respondent’s violation I have considered both its serious nature, depriving as it did the respondents’ client of her statutorily mandated right to be clearly and unambiguously informed of the nature of her relationship with the respondents, and the respondents’ failure to refund moneys after having agreed to do so in accordance with the terms of the brokerage agreement executed by the parties.
DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT Celinda Iaboni and Mark 1027, Inc. have violated Real Property Law §443 and demonstrated untrustworthiness, and accordingly, pursuant to Real Property Law §441-c, they shall pay a fine of $1000.00 to the Department of State on or before December 13, 2007 and provide proof that they have fully refunded Tracey Cox, and should they fail to pay the fine or provide proof of refund, their license as a corporate real estate broker, UID# 31IA1058136, shall be suspended for a period commencing on December 14, 2007 and terminating three months after the receipt by the Department of State of their license certificate and pocket card, and upon expiration of that three month period, their license shall be further suspended until such time as they shall provide proof satisfactory to the Department of State that they have fully refunded the amount of $800 due to Tracey Cox. They are directed to send a certified check or money order for the fine payable to “Secretary of State,” or their license certificate and pocket card, and proof of the refund, to Kathy Scarcella, Customer Service Unit, Department of State, Division of Licensing Services, 80 South Swan Street, P.O. Box 22001, Albany, New York 12201-2201.
Patrice M. Le Melle Administrative Law Judge
Dated: November 13, 2007