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28. Jurisdiction

40 DOS 94 Matter of DOS v. Hearl - attempt to surrender license while charges are pending does not divest DOS of jurisdiction; amendment of pleading to conform to the proof granted; no additional evidence would be forthcoming and essential issue was litigated; conversion of deposits warrants revocation; violation of 175.1 if balance in escrow account falls below aggregate deposits to be held

47 DOS 94 Matter of DOS v. Carroll - DOS jurisdiction after expiration of license if applicant for renewal or eligible to automatically renew under two-year provision of RPL §441(2); salesperson who sues client for commission violates RPL §442-a; failure to cooperate with investigator violates RPL §442-e(5)

57 DOS 94 Matter of DOS v. Sbarra - DOS jurisdiction continues during two-year renewal period after license expiration; individually licensed broker who worked under the name and as representative of a firm acted as unlicensed associate broker (RPL §440-a); broker must be licensed in the capacity in which he conducts business

45 DOS 94 Matter of DOS v. Sturdevant - failure to prove "availing," as a necessary element is lack of supervision; uncharged misconduct (regarding unlicensed name and escrow funds) was not fully litigated and is not grounds for discipline; accordingly, do not reach issue of reliance upon advice of counsel

53 DOS 94 Matter of DOS v. Bennett - DOS has jurisdiction to determine charges brought during 2-year period during which licensee may renew; DOS bears burden of proof; failure to establish that monies not paid were required deposit; licensee had right to raise claim of valid reason for not paying promissory note and have bona fideadjudication in court (even if loses in court; licensee not untrustworthy for failure to pay judgment where complainant failed to establish he was able to do so; licensee not untrustworthy because of discharging judgment in bankruptcy

113 DOS 94 Matter of Carroll - DOS has jurisdiction to determine fraud or fraudulent practice or untrustworthiness and incompetence as to activity which could be violation of other law, such as Labor Law; no jurisdiction of respondent who was unlicensed when alleged unlawful acts occurred and not licensed when notice of hearing and complaint served; DOS fails to prove fraud or misrepresentation in disclosure notices; failure to prove time correlation of work as salesperson and collection of unemployment insurance; failure to prove false statement to collect unemployment insurance; fraudulent practice doesn't require intent; General Business Law §349(a) deceptive act or practice; failure of proof of violation of RPL §443(e)(5)

118 DOS 94 Matter of Fusco - DOS retains jurisdiction to adjudicate violations occurring during licensure; attorney who is licensed as broker does not need to post a sign unless he actually engages in the real estate brokerage business

13 DOS 95 Matter of Skydell - jurisdiction to adjudicate after expiration of license where eligible to renew; collateral estoppel as to fact findings by Division of Housing and

Community Renewal; liability of broker for actions of partnership in which he was general partner irrespective of actual knowledge of wrongful acts; DOS not empowered to order restitution of illegal rent overcharges; failure to pay a fine may be challenged only in a subsequent disciplinary hearing; no direct liability for non-participation and un-involvement in corporate acts; no vicarious liability of corporate officers, directors or shareholders for wrongful acts of corporation; actual knowledge required for vicarious liability; broker presumed to know the law; failure to establish representative broker was directly responsible or vicariously liable for failure to disclose ownership interest in violation of 19 NYCRR §175.6; failure to deliver duplicate original of lease in violation of 19 NYCRR §175.12; retaining an unearned fee in violation of RPL §441-c; financial inability to pay judgments is good defense to charge of willful failure to satisfy judgment; efforts to meet obligations and refusal to file for bankruptcy demonstrate willingness to attempt to pay debts; pleading not conformed to change availing or failure of supervision, as these charges were not with in the broad composition of complaint and not actually litigated

15 DOS 95 Matter of Gafni - jurisdiction of DOS; deposit money continues to be property of prospective buyer until contract condition is achieved; unlawful retention is larceny; fraudulent practice of illegal retention of deposits, but no proof of criminal intent essential to prove fraud; failure of proof of retention of unlawful commission; vicarious liability of corporation for acts of representative broker; no authority to award damages; restitution with interest is required ($2,500; $3,000; $1,250 and $2,500)

24 DOS 95 Matter of Seplow - disciplinary charge jurisdiction where licensee's renewal has been previously denied; proof of service of process; agency relationship and duties; fraud in sale of cooperative apartment, including false information about particular sale and willful non-disclosure of material information; failure to obey buyer's obvious intent to have deposit treated as funds to be held in escrow as payments to seller; conversion; rules applicable to supplemental pleadings - absent surprise or prejudice, motion to file and serve could be granted on day of hearing, but here respondent doesn't appear, so supplemental complaint dismissed without prejudice; DOS fails its burden of proof as to extortion and retention of unlawful commission and unauthorized practice of law; when respondent became optionee to purchase subject matter, agency relationship ceased to exist; fiduciary duty precludes respondent from acting simultaneously as agent and principal in a transaction; restitution of $35,000 deposit plus interest at legal rate for judgments

87 DOS 95 Matter of DOS v. Desgranges, et al. - due process requires due notice; failure to obtain jurisdiction; invalid substituted service; unlicensed persons not required to advise DOS of change in location (RPL §441-a[5])

214 DOS 97 Matter of DOS v. Laymon - accounting to client; bad check; deposits; failure to pay judgments; proper business practices; jurisdiction; DOS retains jurisdiction after expiration of license (for failure to pay renewal fee) where acts occurred during licensure; violation of 19 NYCRR 175.1 by depositing clients’ funds into operating account and failing to maintain special bank account; violation of 19 NYCRR 175.2 for failing to account to client; broker engaged in fraudulent practices by accepting monies he was required to retain in escrow, depositing said monies into his operating account, failing to return same to its rightful owner and by purporting to make refunds by issuing bad checks; in light of broker’s financial inability to do so, failure to promptly satisfy judgments was not a demonstration of untrustworthiness; there was no violation of 19 NYCRR 175.3(b) where broker was not managing rental properties; real estate broker’s license revoked; reapplication for broker’s license conditioned upon proof of payment of restitution with interest and proof of satisfaction of judgment with interest

263 DOS 97 Matter of DOS v. Viking Realty, Ltd. - due process; jurisdiction; vicarious liability; ex parte proceeding may proceed where proper service made; proper service against corporate broker by certified mail to last known business address; improper service on a representative broker by certified mail to residence address; DOS has jurisdiction over party not licensed at the time of hearing when the party properly served is eligible to automatically renew the prior license under the two year limitation provision of RPL §441(2); Article 12 - B (Apartment Information Vendors) does not require licensure of employees of licensed vendor; charging a fee for residential apartment listing which is obsolete and available publicly without cost is fraudulent business practice; corporate broker may not retain the benefits, profits or proceeds of a transaction wrongfully negotiated; corporate broker not vicariously liable without actual knowledge of unlawful conduct; restitution of $125.00 plus interest; dismissal of allegations under Article 12-B and dismissal of claim against representative broker

358 DOS 97 Matter of DOS v. John - improper business practices; due process; personal jurisdiction; ex partehearing is permissible upon proof of proper notice of hearing; single notice of hearing sent to two individual respondents at last known business address of only one fails to obtain personal jurisdiction over respondent to whom the notice was not sent; each respondent must be served with his or her own individual notice of hearing and complaint; failure by broker to file change of association form for new salesperson; $500 fine

107 DOS 98 Matter of DOS v. Sosis - subject matter jurisdiction; due process; failure to appear at hearing; proper business practices; deposits; fraudulent practice; DOS fails its burden of proof; DOS has subject matter jurisdiction if at the time the disciplinary proceeding was commenced by proper service of a notice of hearing and complaint the party was (i) licensed to engage in regulated real estate activities, or (ii) an applicant for either a license or for the renewal of a license to engage in regulated real estate activities, or (iii) eligible to automatically renew the prior license under the two-year limitation provision of RPL §441(2); ex parte hearing is permissible upon proof of proper notice of hearing; DOS has subject matter jurisdiction where party was licensed at the time proceeding was commenced and, where at time of hearing, although not licensed was eligible to automatically apply to renew pursuant to RPL §441(2); licensee operated a real estate brokerage business under an unlicensed name; licensee unlawfully retains deposit funds after deposit monies were delivered on the condition that same were to be disbursed only on the principal’s consent and approval and said consent and approval was not given; licensee’s illegal exercise of right of ownership over his principal’s funds spawns conversion and constitutes a fraudulent practice; DOS fails its burden of proof to establish licensee failed to deposit trust funds in a segregated escrow account, engaged in fraud and changed business location without notice to DOS; restitution ordered in the amount of $1,900 plus interest, fine of $1,000 and any further application for licensure shall not be considered until applicant pays said fine and provides proof of payment of restitution

287 DOS 98 Matter of DOS v. Uqdah Realty & Management Corp. -- deposits; jurisdiction; fraudulent practices; failure to pay judgment; vicarious liability; notary public; disclosure of agency relationship; broker violated 19 NYCRR 175.1 when he deposited escrow funds into his operating account; broker committed conversion when his operating account fell below deposit amount; broker engaged in fraudulent practices when he illegally retained buyer’s trust funds and attempted to qualify prospective buyer for mortgage by falsely stating their employment; broker failed to disclose his agency relationship to his client; failure to pay judgment; corporate real estate broker vicariously liable and charged with actual knowledge of violation of law because of representative broker’s cognizant misconduct as corporate officer; broker is not required to deposit a refundable commission in an escrow account unless contractually demanded; corporate broker and representative broker’s license revoked; restitution of deposit of $12,000 plus interest; notary public commission revoked based on misconduct as a real estate licensee

172 DOS 98 Matter of DOS v. E.F. Realty Inc. -- due process; failure to appear at hearing; deposits; complaint dismissed as to licensee not properly served; DOS retains jurisdiction against party not a licensee at the time of the hearing if, when the proceeding was commenced the party was properly licensed, was an applicant for either a license or renewal, or was eligible to automatically renew under the two year provision of RPL §441(2); commission checks are properly deposited in broker’s operating account and may be immediately deposited for the protection of broker; depositing commission check in escrow account would constitute commingling funds; retention of two commissions after contractual, conditional payment provisions failed and demand for return of deposits is illegal; commission unlawfully retained may be ordered to be refunded; unlawfully retained commissions ordered refunded with interest

12 DOS 99 Matter of DOS v. Yasrebi - automatic revocation upon felony conviction; failure to appear at hearing; jurisdiction; ex parte hearing permissible upon proof of proper service; DOS retains jurisdiction over respondent where license has expired but disqualifying acts occurred while respondent was entitled to renewal of license during two year renewal period; conviction of federal felony bars respondent from holding a license as a real estate salesperson; salesperson’s license revoked

13 DOS 99 Matter of DOS v. Shahkohi - automatic revocation upon felony conviction; failure to appear at hearing; jurisdiction; ex parte hearing permissible upon proof of proper service; DOS retains jurisdiction over respondent where license has expired but disqualifying acts occurred while respondent was entitled to renewal of license during two year renewal period; conviction of federal felony bars respondent from holding a license as a real estate salesperson; salesperson’s license revoked

23 DOS 99 Matter of DOS v. Baratian - automatic revocation upon felony conviction; failure to appear at hearing; jurisdiction; prior misconduct; ex parte hearing may proceed upon proof of proper service; DOS retains jurisdiction where respondent is eligible to automatically apply to renew license; felony conviction without executive pardon, certificate of good conduct or certificate of relief from disabilities is statutory bar to licensure; salesperson’s license revoked

24 DOS 99 Matter of DOS v. Eliyahv - automatic revocation upon felony conviction; failure to appear at hearing; jurisdiction; prior misconduct; ex parte hearing may proceed upon proof of proper service; DOS retains jurisdiction where respondent is eligible to automatically apply to renew license; felony conviction without executive pardon, certificate of good conduct or certificate of relief from disabilities is statutory bar to licensure; salesperson’s license revoked

79 DOS 99 Matter of DOS v. Pagano - disclosure of agency relationships; failure to appear at hearing; proper business practices; unauthorized practice of law; unearned commissions; vicarious liability; fraudulent practice; jurisdiction; ex parte hearing may proceed upon proof of proper service; DOS has jurisdiction after expiration of respondents’ licenses as acts of misconduct occurred and the proceedings were commenced while the respondents were licensed; licensee fails to timely provide seller client with agency disclosure form prior to entering into listing agreement and fails to timely provide agency disclosure form to buyer upon first substantive contact; broker fails to make it clear for which party he is acting; broker violates 19 NYCRR 175.24 by using exclusive right to sell listing agreement without mandatory definitions of “exclusive right to sell” and “exclusive agency”; broker breaches fiduciary duties to seller clients by misleading them as to buyer’s ability to financially consummate the transaction; broker breaches his fiduciary duty to seller by referring seller to the attorney who represented the buyers when he knew or should have known such attorney could not properly protect seller’s interests; improper for broker to use listing agreements providing for broker to retain one half of any deposit if forfeited by buyer as such forfeiture clause could, by its terms, allow broker to retain part of the deposit when broker did not earn a commission; broker must conduct business under name as it appears on license; broker engaged in the unauthorized practice of law in preparing contracts for purchase and sale of real estate which did not contain a clause making it subject to the approval of the parties’ attorneys and were not a form recommended by a joint bar/real estate board committee; broker demonstrated untrustworthiness and incompetency in using sales contract which purported to change the terms of the listing agreement to include a higher commission; broker demonstrated untrustworthiness and incompetency in using contracts of sale which were unclear, ambiguous, vague and incomplete; broker failed to amend purchase agreement to reflect amendment to increase deposit amount; broker demonstrated untrustworthiness in back-dating purchase agreements; broker demonstrated untrustworthiness in participating in scheme to have seller hold undisclosed second mortgage and to mislead first mortgagee about the purchaser’s financial ability to purchase; broker demonstrated untrustworthiness by claiming unearned commission and filing affidavit of entitlement for unearned commission; DOS fails to establish by substantial evidence that respondent acted as undisclosed dual agent; corporate broker bound by the knowledge acquired by and is responsible for acts committed by its licensees within the actual or apparent scope of their authority; corporate and individual brokers’ licenses revoked, no action taken on application for renewal until proof of payment of sum of $2,000.00 plus interests for deposits unlawfully retained

84 DOS 99 Matter of DOS v. Woodland - failure to appear at hearing; jurisdiction; mortgage applications; failure to pay judgment; ex parte hearing may proceeding upon proof of proper service; DOS has jurisdiction over respondents for acts of misconduct which occurred during licensure even though the licenses expired on their own terms; DOS fails its burden of proof to establish broker failed to obtain signature on agency disclosure form; DOS fails its burden of proof to establish that a broker has an obligation to “pre-qualify” a potential purchaser; broker breached duty to deal honestly with the public when advised purchaser he would assist in obtaining financing and failed to do so; DOS fails its burden of proof that broker wrongfully failed to hold a $500.00 deposit in escrow as deposit was remitted to seller with the permission of buyer; failure to pay judgment without a showing that broker is unable to do so is a demonstration of untrustworthiness; no action to be taken for reapplication for broker’s license until payment of $1,000.00 fine and proof of satisfaction of judgment

145 DOS 99 Matter of DOS v. Reles - jurisdiction; proper business practices; unearned commissions; surrender of license by broker does not divest DOS of jurisdiction; broker pleads no contest to charge that he conducted regulated real estate transactions under an unlicensed name; fees charged while conducting activity under an unlicensed name are unearned; broker fails to execute written Consent Order and make restitution in accordance with no contest plea; license revoked, no action on further licensure until proof submitted of payment of restitution

1 DOS 00 DOS v. Ogunleye - deposit; failure to appear at hearing; jurisdiction; unlicensed activity; ex parte hearing may proceed upon proper notice; DOS retains jurisdiction where the broker was licensed when (i) the disciplinary action was commenced and when the hearing was held, and (ii) when the broker was eligible to automatically renew the prior license; retention of deposit monies after principal demands refund constitutes a larceny and constitutes a fraudulent business practice; $1,000.00 fine

7 DOS 00 DOS v. Flagship Marketing Group - availing of license; failure to cooperate with DOS investigation; jurisdiction; proper business practices; ex parte hearing may proceed upon proof of proper service; DOS retains jurisdiction over party not licensed at the time of the hearing where, at that time the complaint was served, the party was (i) licensed, (ii) an applicant for a license or renewal, or (iii) was eligible to automatically renew; salesperson is prohibited both from owning, directly or indirectly, singly or jointly, any shares of voting stock in and from being an officer of any licensed real estate brokerage corporation with which the salesperson is associated; representative real estate broker availed the corporate broker license to an associated salesperson where the office was operated by the salesperson without the direct supervision of the representative broker and the salesperson conducted business as a broker for his own benefit; representative real estate broker engaged in fraud by availing the corporate real estate broker license to a salesperson; representative broker’s availing of corporate broker’s license for which the corporate broker is vicariously liable; failure to provide business records constitutes failure to cooperate with DOS investigation; DOS fails to establish fraud, ignorance or negligence is not sufficient to prove mistake; pressure, regardless of how severe, is not undue influence; restitution denied where funds sought were received by an entity not named or charged in the complaint; corporate broker fined $3,000.00, representative broker’s license revoked and fined $3,000.00 and salesperson fined $5,000.00

415 DOS 00 DOS v. Deppoliti - jurisdiction; prior misconduct; DOS has jurisdiction over non-licensee where non-licensee was eligible to automatically apply to renew prior license on the date on which the disciplinary action was commenced; automatic bar to licensure where applicant has been convicted of a federal felony (bankruptcy fraud and theft of funds) without having obtained an executive pardon, certificate of good conduct or a certificate of relief from disabilities; salesperson’s license revoked

287 DOS 01 DOS v. Mulwitz - failure to appear at hearing; jurisdiction; listing agreement; DOS has jurisdiction where broker is licensed at time of alleged unlawful conduct and where the disciplinary hearing was held during the two year period where broker was eligible to automatically apply to renew license; ex parte hearing may proceed upon proof of proper service; Reg. 175.10 prohibits the offering of property for lease without the authorization of the owner; DOS fails to prove failure to cooperate with DOS investigation as DOS was unable to contact broker and thereby broker did not fail to supply requested information; DOS may order restitution for unearned commissions but may not order damages; restitution in the amount of $825.00; further application request will not be considered until proof of payment of restitution

13 DOS 01 Matter of DOS v. Parkin - forgery; fraudulent practices; jurisdiction; mortgage application; notarization; licensee demonstrates untrustworthiness by causing a deed bearing a forged signature to be recorded; licensee demonstrates untrustworthiness and incompetency by using various social security numbers other than his own on various documents prepared by him including license application, mortgage application and various bankruptcy petitions; failure to cooperate with DOS investigation by failing to supply requested and agreed to documents and lying to investigator about his knowledge of a fraudulent notary public; DOS retains jurisdiction where, although license has expired, two applications are pending, one for renewal and one for a new license; broker’s license revoked and pending applications denied

481 DOS 01 DOS v. Harris - deposits; failure to appear at hearing; failure to cooperate with DOS investigation; fraudulent business practice; jurisdiction; notary public; unearned commissions; ex parte hearing may proceed against non-appearing respondent upon proof of proper service; in the absence of an agreement to the contrary, rental broker is entitled to compensation only after procuring a rental agreement between tenant and landlord; broker fails to deposit $950.00 lease deposit in special escrow account; broker commingled funds and converted deposit; broker failed to cooperate with DOS investigation by failing to truthfully answer all questions put to him, by providing DOS with misleading statements and by failing to provide requested documents; providing DOS with untrue and misleading statements indicates broker lacks sufficient honesty to be entrusted with duties of a notary public; DOS fails to prove that broker was unauthorized to show apartment; DOS retains jurisdiction after license expires where renewal may be had merely by submitting application and paying applicable fees; the claim of the right to retain and the retention of an unearned commission is a fraudulent business practice; broker receiving money to which he is not entitled may be required to return it; broker fined $1,000.00 and required to refund $950.00 deposit; broker’s commission as a notary public revoked; charges against non-appearing salesperson dismissed for DOS’s failure to provide proof

745 DOS 01 Matter of DOS v. Vasquez - jurisdiction; DOS fails its burden of proof; unlicensed activity; duty to supervise sales associates; DOS retains jurisdiction over salesperson during automatic renewal period after salesperson’s license expired; DOS fails its burden of proof where it provides no evidence regarding one count in the complaint and where the evidence is equivocal and unclear with respect to another count; salesperson engages in unlicensed activity after license expired; broker fails to supervise salesperson where he allows the salesperson to engage in regulated real estate activity without a license; broker is not entitled to a commission for any real estate transaction effectuated by a salesperson who is not properly licensed in association with the broker; broker may be required to return commission as a condition of retention of his license where broker receives money to which he is not entitled; salesperson to be fined $250 if he reapplies for a license; broker fined $500 and license suspended until such time as he refunds $1,000 commission

920 DOS 02 DOS v. Simmons – failure to appear at hearing; proper business practices; failure to cooperate with DOS investigation; jurisdiction; ex parte hearing may proceed upon proof of proper service; DOS has jurisdiction after license has expired where conduct occurred while individual was licensed; broker does not file termination of association forms when salespersons cease working for him; broker fails to supply documents or appear for interview after DOS requests; broker fails to cooperate by making false statements to DOS investigators; DOS fails its burden of proof; salesperson not liable for return of unearned commission where commission money was already in possession of broker; broker is not entitled to commission for real estate transaction effectuated by a salesman who is not properly licensed in association with that broker; real estate broker’s license revoked and broker ordered to refund $900.00 commission and $40.00 application fee; charges against salesperson are dismissed

888 DOS 03 DOS v. Lee - jurisdiction; DOS fails to properly serve complaint and therefore personal jurisdiction over respondent was not obtained; DOS mailed notice of hearing to broker at his prior address which notice was returned to DOS and DOS thereafter made no additional effort to serve broker; complaint dismissed

515 DOS 05 DOS v. Duroseau - failure to appear at hearing; fraudulent business practices; deposits; commissions; unlicensed activity; disclosure of agency relationships; jurisdiction; DOS retains jurisdiction where alleged unlawful acts occurred during licensure and where after license expired licensee was eligible to automatically renew his license; salesperson engaged in fraudulent business practices by failing to refund deposit monies to a principal, illegally retaining deposit funds, retaining an illegal commission, failing to provide agency disclosure form to principal and by acting as an unlicensed real estate broker; DOS fails to prove non-cooperation with investigation where salesperson submitted two written responses to DOS’s requests; salesperson ordered to refund $2,300.00 plus interest, any future application for licensure will not be considered until refund made

701 DOS 05 DOS v. Rose - prior misconduct; jurisdiction; material misstatement on application; surrender of license; broker fails to disclose on two applications for licensure convictions for distributing or possessing controlled dangerous substances within 1,000 feet of school property or bus and cruelty and neglect of children; surrender of license does not divest tribunal of jurisdiction as the acts of misconduct occurred and the proceedings were commenced while the respondent was licensed; jurisdiction would continue even had license expired of its own terms; broker’s conduct demonstrated a lack of trustworthiness; broker’s license revoked.

4 DOS 07 Matter of Gutriman – cease-and-desist, expired license, due process, failure to serve complaint at last known business address, dismissal without prejudice

2136 DOS 07 Matter of Cherry- broker; felony charges pending under indictment (fraud and larceny); license granted without prejudice to revocation proceeding if convicted

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