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2. Accounting to Client

35 DOS 95 Matter of Gooding - jurisdiction; amendment of complaint as of right (CPLR 3025[a]); second amendment of complaint by permission; plea of guilty with explanation; commingling of deposits in violation of 19 NYCRR §175.1; conversion of escrow funds; failure to render account is violation of 19 NYCRR §175.2; retention of unearned management fee; restitution of $28,233.85 plus interest at judgment rate

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

336 DOS 97 Matter of DOS v. Reyes - accounting to client; deposits; DOS fails its burden of proof; licensee violates 19 NYCRR 175.1 by depositing rents in the management of client’s business into his operating account; licensee fails to fully account for insurance proceeds and pays himself management fees well in excess of amount agreed to; DOS fails to prove licensee wrongfully closed client account, improperly monitored charges assessed in the operation of client’s apartment business and failed to pay insurance premiums; broker required to refund excess commissions earned plus interest and to fully account for monies claimed expended for maintenance and repair; broker’s license is suspended for 6 months and until such time as proof submitted of refund of excess commissions and accounting

371 DOS 97 Matter of Meriwether - prior misconduct; applicant has burden to establish entitlement to license; license may be denied based upon prior criminal conduct where there is either (i) a direct relationship between the criminal offense and the specific license or (ii) where granting the license would involve an unreasonable risk to persons or property; there is a direct relationship between the crimes of robbery and attempted robbery and a license as a real estate salesperson; applicant establishes granting license would not involve unreasonable risk to person or property; applicant was granted a certificate of good conduct, over six years have passed since commission of the most recent crime, applicant continues to participate in therapy and has had a good employment record since crime; license as a real estate salesperson is granted

375 DOS 97 Matter of Valdez - prior misconduct; automatic revocation upon felony conviction; burden is upon applicant to establish entitlement to license; licensee convicted of a felony (importation of heroin) and has not been granted a certificate of relief from disabilities, certificate of good conduct or an executive pardon; license as a real estate salesperson is denied

120 DOS 98 Matter of DOS v. Resil -- due process; accounting to clients; deposits; ex parte hearing is permissible upon proof of proper service; notice of hearing may be served by sending it certified mail to the last known business address; violation of 19 NYCRR 175.1 and 175.2 for commingling broker’s and client’s funds and failure to account for trust funds; accepting deposit monies under pretext that it would be applied to purchase of real property and then applying it differently constitutes fraudulent practices; failure to pay judgment without showing an inability to do so is demonstration of untrustworthiness; salesperson’s licensed revoked; relicensure conditioned upon proof of satisfaction of judgment and return of deposit monies with interest

314 DOS 98 Matter of DOS v. Eng - due process; failure to appear at hearing; accounting to client; bad checks; fraudulent practice; ex parte hearing is permissible upon proof of proper notice of hearing; broker acting in capacity as managing agent for a rental building violated 19 NYCRR 175.2 and engaged in fraudulent practice when he failed to account to his principal for money collected; issuance of bad checks pursuant to settlement agreement demonstrates untrustworthiness and incompetency; failure to respond to or claim from post office letters from investigator constitutes failure to cooperate with DOS investigation; broker’s license revoked, reapplication conditioned upon proof of payment of restitution with interest

112 DOS 99 Matter of DOS v. Dorfman - adjournments; proper business practices; failure to appear at hearing; failure to cooperate with DOS investigation; accounting to client; ex parte hearing may proceed upon proof of proper service; individually licensed broker seeking to conduct brokerage business under a name other than his own must apply for a license under such new name; broker engaged in the leasing of real property through an unlicensed corporation; broker failed to cooperate with DOS investigation by failing to respond to DOS letters and telephone calls; complaint alleges broker failed to provide an accounting or copies of records of management for owner’s property; broker may be required to return commissions and fees received which he is not entitled to; $1,000.00 fine and suspension of broker’s license until such time as broker establishes he has fully complied with DOS’s investigation and made a full and satisfactory accounting to owner, shall have paid to owner all money due and owning to him as established by the accounting, with interest, and shall have refunded to owner all commissions and other fees, with interest, paid

101 DOS 00 DOS v. Re/Max All-Pro Realty - accounting to clients; disclosure of agency relationships; listing agreements; vicarious liability; broker fails to provide RPL §443 agency disclosure notice; one co-tenant in a tenancy in common can execute a valid agency employment contract with a broker where either (i) prior to the achievement of the agency purpose, the broker lacks actual knowledge of the joint ownership (liability to the broker is circumscribed only to the joint owner who hired the broker), or (ii) where the non-assenting co-owner subsequently ratifies or acquiesces in the action of the other co-owner; broker fails to follow his principal’s instructions with respect to the collection of rents and deposits; broker negligently prepares purchase and sale contract and occupancy agreement (unauthorized practice of law not alleged in complaint); broker fails to provide accounting to client upon client’s request; corporate broker is vicariously liable for the unlawful acts of its representative broker; corporate broker’s license and representative broker’s license are suspended for six months

741 DOS 03 DOS v. Mi Casa II Realty Corp. - accounting to client; deposits; disclosure of agency relationship; dual agency; broker failed to discuss or execute agency disclosure forms with client; broker represented both landlord and tenant in a regulated, real estate transaction acting as an undisclosed dual agent; broker deposited security deposit into his operating account, commingling trust funds; broker committed an act of conversion by using principle’s trust funds without principle’s knowledge or consent; broker failed to deliver security deposit to principal; broker breached fiduciary duty to account to client; broker ordered to refund $725.00 security deposit and $700.00 commission and ordered to pay $500.00 fine

772 DOS 03 DOS v. Home General Realty Corp. - accounting to client; deposits; disclosure of agency relationships; dual agency; DOS fails its burden of proof; DOS fails to prove broker acted as an undisclosed dual agent and that broker failed to cooperate with DOS investigation where numerous written demands were not delivered to broker and were returned to DOS; broker failed to present to and obtain a signed agency disclosure form from its principles; broker failed to maintain an escrow account; broker deposited trust funds into its operating account; broker gave deposits to a “mortgage loan officer” without verifying the individual’s identity and business status; broker was unable to obtain return of monies paid to “mortgage loan officer”; broker ordered to refund $26,391.00

1009 DOS 06 Matter of Younge – salesperson managed real estate and collected rents without broker knowledge (RPL §440[3]), request for or on behalf of broker, failure to account, restitution, 6-month suspension

2 DOS 07 Matter of Pinger – appraiser, incorrectly measurement, gross overestimate of value, failure to appear, revocation

136 DOS 07 DOS v. Burkhardt- Failure to provide agency disclosure; property offered without consent of owner; failure to refund deposit; failure to cooperate with DOS investigation; restitution as condition to relicensure

1517 DOS 07 Matter of Bizzari- Broker; fraud and breach of fiduciary duty re deposit; bad check; commingling (19 NYCRR §175.1) unauthorized demand for 50% down payment; fraud and misrepresentation as registered HUD agent; false statement that purchase would be owner-occupied; failure to disclose broker ownership interest in listed property (19 NYCRR 175.6); failure to deliver duplicate original (19 NYCRR 175.12); agency disclosure notice (RPL § 443[3][b]); use of unlicensed name (RPL § 440-a; 441 [1][a]); incompetency; revocation

1683 DOS 07 Matter of Scott- broker; unauthorized practice of law; gross untrustworthiness in inducement to execute deed; failure to account; false denials; revocation and required to make restitution if reapply for licensure

1955 DOS 07 Matter of Hannays- broker applicant; improper rental practices (security deposit, escrow account, commission); unlicensed name; dishonesty; fraud and misrepresentation with intent to injure; commingling funds; escrow account violation 19 NYCRR 195.1; credible respondent testimony re: lack of good faith by complainant; unlicensed brokerage activity; must refund $1,600 deposit and pay fine of $1,000 before consideration of application for brokerage license

1956 DOS 07 Matter of Martinez- broker and attorney; supervision due to escrow violation; unlicensed practice of real estate brokerage; availing notary public commission; unearned commissions; revocation

1434 DOS 08 Matter of Zackson – broker; property management; failure to provide RPL 443 agency disclosure; issue check with insufficient funds; bad checks not reimbursed; failure to account (175.2); failure to cooperate; revocation

593 DOS 09 Matter of Orlando – failure to manage property; failure to account funds; failure to cooperate with DOS investigation; $300 fine and refund $1,200 with interest

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Third quarter Legal Lines now available

The third quarter 2018 edition of NYSAR’s Legal Lines is now available online at NYSAR.com. This edition covers what a broker's agent actually is, the legal issues related to social media use, conditional approval for financing is not a mortgage commitment and more. Learn more

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