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41. Proper Business Practices

81 DOS 91 Matter of DOS v. Affordable Dreams Real Estate - maintenance of business address and business sign; change of address

92 DOS 91 Matter of DOS v. Resource Realty of New York - suspended for failure to provide change of association card

102 DOS 91 Matter of DOS v. Ratan - discipline for failure to maintain trust account and commingling deposit

Declaratory Ruling 91-34 Matter of Kaplan departure of sales associate, whose continuation was implicit condition of contract, relieves seller of obligation to listing broker

47 DOS 92 Matter of DOS v. Selkin - use of unlicensed name by broker - $500 or 1-month suspension

122 DOS 92 Matter of DOS v. Johnson - failure to furnish duplicate original to consumer (19 NYCRR 175.12) $500 fine or 3-month suspension

137 DOS 92 Matter of DOS v. Maldon - failure to file change of association card; no excuse to rely on employee to file

123 DOS 92 Matter of DOS v. Lopez - salesperson who executes change of association card and furnishes it to broker with filing fee is not liable for broker's failure to file the form

47 DOS 92 Matter of Selkin - use of unlicensed name after Division of Licensing Services (allegedly unreasonably) refused to issue new license after stock purchase/asset transfer, upon ground that new name conflicted with that of existing licensee - $500 or 1-month suspension

DOS 93 Matter of Cruz - broker who relocates business without notifying DOS violating RPL §441-­a(5)

10 DOS 93 Matter of James - broker fails to file termination of association forms for two sales associates when broker ceased conducting business at address due to health problems; filing forms only after advised of violations by investigation is no defense - $750 or 2-month suspension

23 DOS 93 DOS v. Kassorla - failure to file change of association and termination of association forms and surrender of license doesn't divest DOS of jurisdiction; $1,500 fine as condition to re-­licensure

24 DOS 93 Matter of DOS v. Huber - attorney/broker obligated to post signs §441-a[3]); not obligated to attendcontinuing education

26 DOS 93 Matter of DOS v. Stabile - attorney/broker obligated to post signs

32 DOS 93 Matter of DOS v. Mustari - acting as salesperson after expiration of license - failure to take qualifying course and to note term of license

42 DOS 93 Matter of DOS v. Larson - failure to post broker's license; failure to timely file change of association card; use of unlicensed name; refusal to show investigator requested documents; $1,000 fine; dismissal of unlicensed branch office charge (2 offices, DOS failed to show which was main office)

60 DOS 93 Matter of DOS v. Bon Chateau Realty - no failure to maintain escrow account where no client funds on deposit; may maintain un-negotiated check "in escrow" in accordance with agreement of parties; slight variation between licensed name and name utilized in business; company responsible for actions of representative broker

86 DOS 93 Matter of DOS v. Winograd - undisclosed dual agent for tenant and subtenant; failure to provide copy of sublease violates 19 NYCRR §175.1; no suspension of broker who has no knowledge at time of event or retention of proceeds, but liability for misconduct; refund unearned commission

Opinion Letter 93-19 (Thomas G. Mazzotta) - 5 member partnership of 1 attorney, 1 broker and 3 non-licensees;unlicensed persons can be members of partnership which is licensed as a real estate broker, just as unlicensed persons may be shareholders of a corporate real estate broker. However, salespersons may not be partners, just as they may not be shareholders in a corporation which is licensed as a real estate broker. Any partner who acts as a real estate broker under the name of the partnership (including the attorney) must be duly licensed as a broker

93 DOS 93 Matter of Piper - failure to timely file change of address card; use of unlicensed name; charge of improper location of §175.24 explanation (on front of listing) dismissed, as property was vacant land; failure of proof re: disclosure of agency status; acting as associate broker without proper license; employment of salesperson whose license had expired

103 DOS 93 Matter of Cipriani Lewis - individually licensed broker fails to obtain associate broker's license when acting under the name of the corporation; must get relicensed as associate broker, can't merely file salesperson's change of association form; pleadings amended to conform to the proof; reprimand

105 DOS 93 Matter of DOS v. Jacob - inadequate "EXPLANATION" violates 175.24(b); insufficient evidence of failure to give list of MLS members 175.24(c)(1); dismissal of charge of false advertising where broker substantially performed obligations and owner did not give reasonable opportunity to cure alleged defaults and suffered no damage; inadequate evidence of failure to supervise (175.21[a]); post-hearing submission not considered as no request for leave was made during the hearing

120 DOS 93 Matter of DOS v. Collins - broker fails to file timely change of association application for salesperson; violates RPL §442-b; broker fails to appear at hearing; $350 fine or three-month suspension

123 DOS 93 Matter of DOS v. Harrington - requests for adjournments must comply with 19 NYCRR §400.11; broker permits unlicensed salesperson to work; broker who fails to pay judgment without proof of inability is guilty of untrustworthiness, broker's failure to timely file termination of association notices not excused by claim of unhappiness with filing fee; prior discipline considered in imposing sanction; two-month suspension and continuing suspension until judgment is satisfied

CRC #276 Matter of Knobel, Consent Order - payment of commission to salesperson not associated with broker violates RPL §§442 and 442-a, 19 NYCRR §175.14; $3,500 fine

CRC #400 Matter of Pozzanghera, Consent Order - failure to supervise in permitting use of trade name before being licensed and in permitting use of unlicensed branch office; failure to supervise associate brokers; improper licensure as representative broker when not a corporate officer; failure to execute termination of association cards; $7,000 fine

135 DOS 93 Matter of Graham - (related case settled - CRC #276 [Knobel]) payment of commission to salesperson not associated with broker violates RPL §§442 and 442-c and 19 NYCRR §175.13; sales associate arranges payment via another broker due to fear that former broker would not pay her; absence of harm to public; salesperson cannot be officer of licensee corporation; DOS failure to prove that sales associate of one firm, who was corporate officer of another firm, was also licensed as a sales associate of that firm

128 DOS 93 Matter of DOS v. Vuksanaj - motion to conform pleadings to proof granted where (i) additional evidence wouldn't have been presented if the charge had been stated in the complaint and (ii) issue was actually litigated and was within the "broad framework of the pleadings"; broker's authorization to execute lease on behalf of landlord must be in writing to be valid (G.O.L. §5-703); no commission earned on void lease (due to lack of written authority for broker to sign for landlord); broker is undisclosed "double agent" - thus "fails to make clear" for which party he is acting (NYCRR 175.7); broker is not "managing agent" under NYC Rent Stabilization Code unless (i) broker has ownership or financial interest in property or (ii) performs managerial duties; separate escrow account (§175.1) not required when broker is not holding escrowed funds; holding funds overnight does not trigger requirement for escrow account (returned next day upon demand); unlicensed name used in commission agreement but lack of intent to mislead considered in mitigation; restitution of unearned commission

131 DOS 93 Matter of Sitterly - consolidate separate complaints where common questions of law and fact would serve the interests of justice and administrative economy; contracts are presumed to express parties' intention and effect is given to their plain words; broker can rely upon deposit clause providing for funds to be maintained in escrow or until mutual agreement of the parties; ALJ does not consider uncharged claim of use of form contract with mutually inconsistent provisions; unlicensed name (addition of franchiser's name to the licensed name) violation mitigated by absence of harm to public; reprimand and discontinue use of licensed name or obtain licensure of franchisee name; corporate broker vicariously liable for acts of representative broker


141 DOS 93 Matter of DOS v. Pozzanghera - salesperson can't own voting stock or be officer of licensed corporation (NYCRR 175.22); separate escrow account required (NYCRR 175.1); unlicensed name; illegal to claim or retain commission for services while not properly licensed; failure to pay judgment; failure to file termination of associate card; representative broker liable for illegal ads; revocation of broker's license discontinues salesperson's association per RPL §441-d

152 DOS 93 Matter of DOS v. Baird - individually licensed broker improperly conducts business under unlicensed name; failure to file termination of association card; complaint amended to conform to the proof; failure of proof of dual agency

CRC #413 Matter of DOS v. Jacabacci, Consent Order - payment of buyer's deposit to seller prior to agreement on terms of sale; failure to refund deposit in accordance with terms of binder; inadequate sales agreement; failure to provide RPL §443 disclosure notice; improper advertising of "possible mother/daughter" although permits for two-family use had not been obtained; $750 fine on sales associate

142 DOS 93 Matter of Tannenbaum - corporation which manages real property, collects rents and cooperative apartment building maintenance charges requires a license; unlicensed salesperson and unlicensed corporation precludes legitimate claim for brokerage fee; settlement of civil suit between tenant and unlicensed corporation is not a defense to charge of unlicensed activity; corporation's failure to pay judgment where individual respondent is not a party is not considered in disciplinary case against said individual; deposit monies should be returned, as no viable lease was entered into and no lawful brokerage commission could be claimed; restitution of entire deposit ordered (civil action settlement provided for return of $600 of $900), as no licensed real estate services were rendered; however, retention of deposit is not conversion or illegal retention of deposit monies, but is unlawful claim for commission by non-licensee; broker's failure to file termination of association notices violates RPL §441-a(5); respondent's cooperation during investigation considered, as is testimony that action resulted from lack of knowledge and negligent, not deliberate attempt to violate licensing law

9 DOS 94 Matter of DOS v. Shane - motion for pre-hearing discovery beyond SAPA 401(6) is denied; rules re:subpoenas in administrative proceedings reiterated; proper procedure of reserving right to file post-hearing memorandum of law; MLS form listing agreements are acceptable; individual license not sufficient to allow acting as representative of corporate licensee -need affiliated license; agreements procured by individual acting under name of firm but without affiliated license are illegal and unenforceable - no brokerage fee can be claimed; misrepresentation and execution of unauthorized extension; misrepresentation of law (distinction between canceling agency authority and abiding contract rights); RPL §443 controls the disclosures required of licensees; subsequently licensed corporation not vicariously liable; failure to provide copy of agreement (19 NYCRR 175.12); inadvertence considered in determining penalty

CRC #308 Matter of DOS v. Gomez, Consent Order - failure to place deposit in escrow account (19 NYCRR 175.1); conversion of rent, security deposit and commission; breach of fiduciary duty; restitution ($1,840) and $500 fine


94 DOS 94 Matter of DOS v. Pilato - conduct of business under unlicensed name (RPL §441[1]); confusingly similar name (19 NYCRR 175.18); change of association notice required regarding change from and to licensed broker, not an unlicensed entity; failure to prove by substantial evidence that corporate broker is liable for violations, as the representative broker was not acting as the agent of the corporation when the violation occurred and the corporate broker did not retain the benefit of the wrongful act

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 notconformed to change availing or failure of supervision, as these charges were not with in the broad composition of complaint and not actually litigated

Opinion Letter June 1, 1995 (Thomas Bailey) - DOS does not require continued use of specific, agency approved franchising and business documents. DOS will continue to require proof of right to acquire franchise name upon franchisee's application for licensure

65 DOS 95 Matter of DOS v. Dawns Horizon Realty, Inc. - advertising; zoning; did broker know or have reason to know of violation; broker's conduct effecting or encouraging violation of zoning and occupancy regulations demonstrates untrustworthiness and incompetency; refund deposit, suspension; relocation of office without filing change of address violates RPL §441-a[5]; merely taking phone calls does not require licensure, broker not required to file change of association for salesperson, RPL §441[1][a]; failure to give prospective tenant disclosure form, violation RPL §443, failure in such case to get acknowledgement of receipt not violation

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])

73 DOS 95 Matter of DOS v. Marotta - consolidation of actions; dual agency; disgorgement of broker commission; broker may act concurrently in a single transaction as an agent and a principal with informed consent of and full disclosure to principal; broker's agreement breached by broker where broker obtained property incompatible with client's stated needs; no broker's fee earned where brokerage agreement breached by broker; broker engaging in business under trade name acts as individual; agency created between broker and buyer by conduct of parties; dual agency allowed upon full disclosure and informed consent of both buyer and seller; no commission earned by broker where breach of fiduciary duty; refund unearned commissions

Consent Order 96-0004, Matter of Bernstein - Failure to notify DOS of change of principal business addressfailure to renew license after expiration; acting as real estate broker without licensefailure by licensee to disclose to seller licensee’s interest as a principal in corporate buyer client; $2,000.00 fine

89 DOS 96, Matter of DOS v. J.A.V. Realty Corp. - cease and desist; inadvertent violation; mailing one solicitation letter to one homeowner listed on cease and desist list without allegations of any further violation is not tantamount to untrustworthiness or incompetence; licensee’s office systems include specific procedures designed to prevent solicitation of listings on cease and desist lists; inadvertent act is technical violation of Reg. 175.17; licensee warned further determination of violation could result in assessment of penalty

25 DOS 97 Matter of DOS v. Costello - amendment of pleading to conform to the proof; proper business practices;failure to pay judgment; pleadings may be amended to conform to the proof so long as an issue has been fully litigated and is closely enough related to the stated charges that there is no surprise or prejudice to the respondent; broker conducting business under name other than on license demonstrates incompetency; failure by broker to satisfy judgment demonstrates untrustworthiness; broker may be held liable for failure to satisfy judgment against corporation where broker controls the corporation; $750 fine and license suspension until judgment satisfied

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

242 DOS 97 Matter of DOS v. Hinds - deposits; proper business practices; fraudulent practices; due process; exparte proceeding is proper where there is evidence of proper service of process; unlawful retention of deposit monies constitutes larceny; illegal exercise of right of ownership over principals’ funds is conversion; broker’s illegal retention of deposit monies of principals in four, separate real estate transactions is a fraudulent practice; broker’s failure to pay lawfully obtained judgments without a showing that he is unable to do so is a demonstration of untrustworthiness; license revocation; restitution with interest

CRC #96-0636 Matter of DOS v. Marolda Properties, Inc., Consent Order - failure to timely file change of association notices for salespersons; $500 fine; recital of restitution paid without stating offense

CRC #96-2757 Matter of DOS v. O’Campo, Consent Order - salesperson conducted a regulated transaction without the knowledge of her employing broker; $500 fine

CRC #97-2765 Matter of DOS v. Livingston, Consent Order - engaging in unlicensed activity as an apartment information vendor; ordered to cease and desist; broker to immediately comply with RPL §441-b(2) prohibiting salesperson from serving as an officer of corporate broker and with 19 NYCRR §175.22 prohibiting a salesperson from owning voting shares of stock

328 DOS 97 Matter of DOS v. Marie Ward Realty, Inc. - duty to supervise sales associates; due process; failure to appear at hearing; ex parte hearing is permissible upon proof of proper notice of hearing; representative broker allows salesperson to engage in regulated transactions prior to notifying DOS of salesperson’s association with broker; salesperson was not licensed to engage in regulated transactions; representative real estate broker is liable for participation in or authorization of illegal acts; representative broker’s violations are imputed to corporate broker; lack of knowledge that salesperson was not properly licensed and brokerage office failure do not excuse representative broker; lack of reasonable excuse coupled with failure to appear indicate pattern of neglect; $1,000 fine

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

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

1 DOS 98 Matter of DOS v. Fiumera - proper business practices; broker licensed in her individual name violates RPL §440-a when not also licensed as an associate broker while working under the name and auspices of another broker; broker not required to disgorge commission where individually licensed and additional associate broker’s license would be issued pro forma upon payment of licensing fee; broker did not engage in fraudulent practice when advised homeowner that radon report was acceptable when reasonably acted upon advice given to her by the party taking the test; broker’s offer to pay for remedial work indicates a good faith offer of settlement; $250 fine

38 DOS 98 Matter of DOS v. Hargrave - proper business practices; unlawful for real estate broker licensed in her individual name to operate under an assumed named without license under the assumed name; licensee immediately ceases to operate under assumed name upon being so advised by DOS investigator; no evidence presented of any harm to the public arising out of violation; broker reprimanded

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

199 DOS 98 Matter of DOS v. Wheeler -- due process; failure to appear at hearing; failure to cooperate with DOS investigation; deposits; proper business practices; ex parte hearing may proceed upon proof of proper service; broker improperly conducted business under name other than that on his licensed as evidenced by signs indicating a different name; broker fails to provide agency disclosure form to buyer prior to entering into agency relationship; broker failed to deliver duplicate original of instrument to client; broker commingled funds by depositing deposit check into operating account; untrustworthiness demonstrated by failure to return deposit when offer not accepted; failure to comply with DOS investigation; broker’s license revoked

122 DOS 98 Matter of DOS v. Hazor -- proper business practices; sales associate as officer of company; corporate broker dissolved by proclamation may only carry on business required for winding up its affairs; engaging in licensed activity and submitting license renewals after dissolution by proclamation constitutes fraudulent practices; failure to comply with DOS request to appear and for production of documents along with failure to comply with subpoena violates RPL §442-e (5); licensed salesperson violates RPL §441-b(2) when he serves as an officer of the corporation; brokers and salesperson’s licenses revoked

168 DOS 98 Matter of DOS v. Briggs-- due process; failure to appear at hearing; proper business practices; ex partehearing may proceed upon proof of proper service; licensee changed location of principal place of business without notice to DOS and operated a real estate brokerage business under an unlicensed name; real estate services rendered on behalf of an unlicensed entity are illegal; $500.00 fine, failure to timely pay fine will result in suspension

CRC #95-0248, 95-0356, 94-0087 Matter of DOS v. Sullivan, Consent Order - proper business practices; licensee pleads nolo contendere to conducting two separate regulated real estate transactions under an unlicensed name; $1,000.00

CRC #97-2741, 97-2742 Matter of DOS v. Greenblatt, Consent Order - licensees plead nolo contendere to failure to act in the best interests of their principal, retaining unearned commissions, splitting commissions with an unlicensed person, and failure to act in good faith in dealing with purchasers; $5,000.00 fine and restitution; attend and complete five hour course on broker’s responsibility to manage, administer and supervise an office; respondent directed to ensure individuals do not participate in ownership, operation or activities of real estate brokerage

CRC #97-3028 Matter of DOS v. Abrams, Consent Order - licensee pleads nolo contendere to altering the commencement date of a listing agreement, causing her principal’s name to be signed to a second listing agreement, and submitting improperly executed and altered listing agreements to the MLS; $1,000.00 fine and completion of three hour course on execution of legal instruments and documents

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

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

CRC #98-0504 Matter of DOS v. Freidman, Consent Order - salesperson ownership and operation of brokerage firm in violation of RPL §441-b(2); ownership of all voting shares of stock in violation of 19 NYCRR 175.22; commingling and converting funds; failure to supervise; voluntary surrender of licenses without right for application renewal for one year; restitution in the amount of $1,946.72 and $7,247.27

CRC #99-1209 Matter of DOS v. Santos, Consent Order - salesperson improperly owned and operated brokerage business and served as a corporate officer in violation of RPL §441-b(2) and improperly owned voting shares of stock in violation of 19 NYCRR 175.22; $2,000.00 fine, broker’s license to be issued upon payment of fine and satisfaction of all other license requirements

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

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

20 DOS 00 Godbout v. DOS - proper business practices; a non-judicially dissolved corporation ceases to exist as a legal entity and is prohibited from doing business in New York except for statutorily prescribed activities; corporate broker’s application for renewal denied

CRC #98-523 Matter of DOS v. Hazor, Consent Order - default decision (122 DOS 98) re-opened upon motion to vacate; license revocation for failure to disclose in renewal applications that corporate broker had been dissolved by proclamation and continued to operate for purposes other than winding up its corporate affairs is annulled; licenses reinstated upon payment of $2,000.00 fine

3 DOS APP. 00 (95 DOS 00) Peattie v. DOS - DOS determination to require salesperson to pay restitution to non-party complainants and retain license is reversed in part and modified; engaging in regulated real estate brokerage business in an unlicensed name and at an unlicensed business address; operation of business and business procedures designed to circumvent licensing law in the name of a “consulting business”; salesperson allowed toretain payment of fees for unregulated activity and required to disgorge fees for regulated services; all licenses revoked until such time as restitution is paid

CRC #00-0795 Matter of DOS v. Levy, Consent Order - broker unlawfully avails his real estate license to salesperson and fails to adequately supervise salesperson, $1,000 fine; salesperson demands and retains unearned commission and unlawfully owns all voting shares of stock in corporate broker; salesperson to pay $1,000 fine, broker and salesperson to pay restitution in the amount of $1,234.69 and salesperson to divest himself of ownership and corporate offices of corporate broker or terminate his salesperson association with corporate broker

594 DOS 01 DOS v. Walker - deposits; failure to appear at hearing; failure to pay judgment; failure to cooperate with DOS investigation; notary public; proper business practices; broker commingles funds by placing deposits in operating account; broker allows escrow account to be overdrawn on numerous occasions; broker uses deposit for separate, unrelated business investment; broker fails to pay judgment without presenting an explanation or excuse for failure to pay judgment; broker fails to cooperate with DOS investigation by failing to respond to and comply with letter directing him to appear for a conference and to provide certain documents; broker fails to notify DOS of new address upon closing office; DOS fails to prove that salesperson improperly held herself out to be real estate broker associated with corporate broker, that the broker made misrepresentations to the purchasers regarding payments they were required to make toward the purchase, that some checks were returned for insufficient funds, that the broker failed to make certain required payments, that the broker properly failed to make certain other deposits and that the broker gave a postdated deposit check which could not be cashed due to insufficient funds; representative broker’s and corporate broker’s licenses revoked, return of deposits in the amount of $400.00 and $3,173.83 ordered with interest, civil judgment to be fully satisfied; salesperson fined $1,000.00 and notary commission suspended for four months

4 DOS APP 02 Matter of DOS v. Hecht - business practices; commissions; broker’s past acts cannot be used against him as evidence of repeated misconduct on a charge of illegal business practices where such conduct is being now first reviewed for untrustworthiness; charging fees in excess of professional norms, absent a showing of unique services offered above and beyond those services normally rendered by a real estate broker, demonstrates untrustworthiness; broker’s current commission rates are far in excess of rates established by custom and usage; ALJ’s decision modified, license suspended until one month after broker refunds amount in excess of rates established by custom and usage

357 DOS 02 Matter of DOS v. Elias - failure to appear at hearing; failure to pay judgment; proper business practices; deposits; DOS fails its burden of proof; restitution; ex parte hearing may proceed upon proof of proper service; respondent failed to fully satisfy a judgment obtained against him without showing that he was unable to do so; a rental broker is entitled to compensation only after procuring a rental agreement between tenant and landlord; retaining part or all of the deposit without obtaining a rental agreement demonstrates untrustworthiness and incompetency; restitution may be ordered as a condition to retention of the broker’s license where he has received money to which he is not entitled; unlawful for broker to operate real estate brokerage business at an address other than that which was stated on his application; broker operated his real estate business out of an address prior to obtaining a license for that address; DOS failed to prove that respondent commingled and converted deposits; real estate brokers license suspended for four months and an additional period of time until respondent proves he has paid the balance of the judgment

445 DOS 02 Matter of Schuler – deposits; disclosure of agency relationships; proper business practices; unlicensed activity; salesperson engaged in licensed activity while not under the supervision of an employing broker; salesperson failed to follow the instruction of his employing broker to file change of association forms with DOS that broker provided to salesman; failure to pay judgment without showing that salesperson is unable to do so; failure to deposit rent deposit in escrow when salesperson is acting without the supervision of an employing broker; failure to provide agency disclosure form; application for renewal of salespersons license denied

649 DOS 02 DOS v. Holzbach – disclosure of agency relationships; proper business practices; sanctions; unauthorized practice of law; vicarious liability; broker fails to timely provide agency disclosure form to buyer although disclosure form could have been faxed to and received from buyer; broker back dated agency disclosure form demonstrating incompetency; use of designated agent form without the use of required agency disclosure form pursuant to RPL §443(4); use of “removal of contingency” addendum to contract which did not contain an attorney approval clause and was not on a form jointly approved by the County Bar Association and REALTOR Association constituted the unauthorized practice of law; corporate broker liable for the acts of its representative broker; proper to impose a higher fine after hearing than that which was offered in settlement (joint fine of $2,000.00 offered); associate broker fined $2,000.00, representative broker fined $1,000.00, and corporate broker fined $2,000.00

730 DOS 02 DOS v. New World Realty of New York, Inc. – availing of license; deposits; disclosure of agency relationships; duty to supervise sales associates; failure to pay judgment; proper business practices; DOS has jurisdiction where disciplinary action was started while individual was licensed as an associate broker and was eligible to automatically renew at the time of the disciplinary hearing; salesperson owned voting stock in licensed corporate real estate broker, failed to pay judgment and failed to present evidence of inability to do so, and engaged in unlicensed activity after license expired; representative broker availed corporate real estate brokers license to salesperson; representative broker failed to properly supervise salesperson by permitting and authorizing salesperson to act as a real estate broker; broker and salesperson failed to make agency disclosures and failed to deposit funds of principal in a special bank account; real estate transaction conducted was a fraudulent business practice; DOS fails to prove the unauthorized practice of law; salesperson’s license revoked and salesperson ordered to pay refund of $1,406.00 of illegal commission collected; representative broker’s license revoked and broker ordered to refund $74.00 of illegal commission collected; representative broker fined $5,000.00

861 DOS 02 DOS v. Birch – bad check; disclosure of agency relationships; deposits; failure to appear at hearing; failure to cooperate with DOS investigation; proper business practices; vicarious liability; ex parte hearing may proceed upon proof of proper service; broker was directed to hold deposit check until offer was accepted and by depositing check without the offer having been accepted she breached her fiduciary duties; broker issued bad checks drawn on her escrow account; broker commingled funds by not withdrawing her earned commissions from escrow account promptly and allowing the money to remain in the account; broker failed to cooperate with DOS investigation by responding to document requests; broker operated business at an unlicensed address; corporate broker is responsible for the acts of its representative broker; broker fails to deal honestly and fairly by failing to advise purchaser that her offer had been accepted by only one of two owners of the property; corporate broker’s and representative broker’s licenses revoked; salesperson fined $1,000.00

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

972 DOS 02 DOS v. Elstein – deposits; DOS fails its burden of proof; proper business practices; unearned commission; broker refused prospective tenant’s demand for return of $200.00 deposit when repairs were not completed to apartment and a lease was not executed; broker illegally retained and converted deposit monies; DOS fails to establish that broker retained an unearned commission; broker ordered to refund $200.00 deposit and to pay $1,000.00 fine

331 DOS 03 DOS v. Skarvelis – DOS fails its burden of proof; proper business practices; no licensed salesperson may own any voting shares of stock in any licensed real estate brokerage corporation with which the salesperson is associated; DOS fails to prove that salesperson was ever associated as a licensed real estate salesperson with broker at a time when she held voting rights and an ownership interest in the brokerage; complaint dismissed

887 DOS 03 DOS v. Bravo - deposits; disclosure of agency relationships; failure to cooperate with DOS investigation; proper business practices; vicarious liability; broker failed to provide agency disclosure form; broker continued to do business under prior firm’s name after association with that firm had been terminated; broker failed to deposit monies received by her into an escrow account; broker failed to respond to DOS letters; broker demonstrated untrustworthiness and incompetency by failing to follow up on the availability of an apartment in a rental transaction; broker failed to give a cash refund of a deposit received in cash upon tenant’s demand therefore; corporate broker bound by the knowledge acquired by its representative broker; corporate broker’s license and representative broker’s license suspended for six months

645 DOS 04 DOS v. Pellegrino - advertising; forgery; proper business practices; salesperson received two commissions directly from person for whom she had arranged rental transactions; salesperson failed to follow her broker’s direction to have check returned and properly paid to broker; salesperson concealed one transaction from her broker; salesperson placed an advertisement for an apartment rental without the approval of her broker; salesperson forged tenant’s signature on agency disclosure form and notice to tenant; DOS fails to prove that salesperson wrongfully held herself out to be a real estate broker merely by the use of the term “Broker” in unauthorized advertisement as 19NYCRR 175.25 does not prohibit the placing of advertisements by salespersons; salesperson’s license revoked

941 DOS 04 DOS v. Pohlig - proper business practices; failure to appear at hearing; ex parte hearing may proceed upon proof of proper service; broker licensed under one trade name conducted business under another trade name; broker relocated his business without notifying DOS, which results in automatic suspension of license; license suspended until compliance with notice to DOS on change of address and $1,000.00 fine for conducting business under an unlicensed trade name

863 DOS 05 DOS v. Goberdhan – disclosure of agency relationships; deposits; adjournments; proper business practices; failure to cooperate with DOS investigation; vicarious liability; broker’s request for an adjournment denied where broker appeared at hearing without counsel and for the first time requested an adjournment to obtain counsel; failure to make more timely request was nothing less than dilatory; corporate broker dissolved by proclamation due to nonpayment of taxes; broker failed to provide agency disclosure form to prospective buyer; broker failed to deal honestly with prospective buyer where broker introduced buyer to real property without disclosing that property was subject to foreclosure, had buyer make a deposit on the property without being able to inspect the interior and without knowing what the purchase price would be, told buyer that their money would be placed in an escrow account when no such account existed and by misleading buyer as to the need to have an attorney in the transaction; broker retained $20,000.00 cash deposit without depositing in an escrow account, broker having no such account; broker made numerous misstatements of fact to DOS’s investigator; broker failed to protect the interests of his client, the buyer, by failing to deposit $20,000.00 cash deposit in an escrow or by giving the money to the seller under circumstances in which the interests of the buyer were not properly protected; individual and corporate brokers’ licenses suspended for six months and additionally suspended until such time as broker provides proof of refunding the sum of $20,000.00 plus interest to buyer and corporate broker paying all franchise taxes and penalties due and being reinstated.

874 DOS 05 DOS v. Curanaj – disclosure of agency relationships; deposits; failure to cooperate with DOS investigation; signs; proper business practices; charge of failure to present purchaser with agency relationship disclosure form dismissed where evidence established only that purchaser did not recall whether she was presented with such a form; charge of failure to make a prompt refund is dismissed where purchaser did not make such a demand and when demand was made by DOS, it was complied with; broker failed to deposit client funds into segregated escrow account and commingled client’s funds with its own; broker submitted two applications for license renewal for corporate broker which was dissolved by proclamation and therefore nonexistent as a corporation at the time of renewal applications; broker failed to comply with DOS’s written request for information; broker failed to post and maintain a sign on its place of business; tribunal considers brokers’ prior history having previously admitted to mishandling and converting client funds, having failed to cooperate with an investigation and having consented to revocation of their licenses should they be found to have again violated Article 12-A or DOS’s regulations; brokers’ licenses revoked.

375 DOS 06 DOS v. Linsey- disclosure of agency relationships; deposits; proper business practices; broker failed to provide agency disclosure to clients in two separate transactions; broker held himself out and acted as a real estate broker under an unlicensed name; broker then failed to place and maintain deposit monies in an escrow account and then to timely return same to buyer after seller did not accept the buyer’s offer; broker failed to properly and accurately market the property and failed to act to the best advantage to its principal when he knew that his client’s circumstances demanded a quick sale of the property; broker’s license revoked

991 DOS 06 Matter of Levine – fraudulent practice, no business sign, unlicensed trade name, no place of business (RPL 441-a[3]), failure to cooperate, $3,000 fine

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

1021 DOS 06 Matter of Godard – fraudulent practices, altered check, unlicensed corporation, restitution, 6-month suspension

1 DOS 07 Matter of Ali – appraiser allowing appraiser assistant to affix signature to report which he did not review, settlement offers declined, no fine authorized, 3-month suspension

128 DOS 07 Matter of Martin- broker, license renewal, prior misconduct, inadvertent cease and desist violation; commission checks written after suspension, but no requirement to be licensed in order to write checks; inadvertent violation of continuing education requirement due to negligent signing of application; renewal granted

1416 DOS 07 Matter of Dickson- broker; demand for $3,000 “termination fee” is demand for an unearned commission; breach of fiduciary duty; offer of property not authorized 175.10; improper advertising without identifying broker 175.25; $3000 fine and requirement of unconditional release of seller

1668 DOS 07 Matter of Anzalone- broker; failure to deal honestly and fairly even when not acting as agent; untrustworthiness in failure to make agreed payments; self dealing as broker entering into purchase agreement; insufficient evidence of other charges of impropriety and failure to list property; six months suspension

1793 DOS 07 Matter of Chiu- broker; untrustworthiness in handling checks and stop payment orders; breach of duty of supervision regarding checks; $500 fine or two months suspension

1895 DOS 07 Matter of Veksler- unlicensed corporation; deposits; disclosure form; dual agents; fraud; failure to maintain records; forgery; revocation

1918 DOS 07 Matter of Thomas- Salesperson; deposit of commission in own account; failure to cooperate; failure to notify of change of association; $500 fine before any application to renew

1919 DOS 07 Matter of Rite Buy Homes- salesperson holds himself out as broker; failure to supply copies; failure to make disclosures; improper ownership of voting stock; 175.4, 175.7, 175.22; other salesperson avails license; revocation and prohibition on reapplication unless refund unearned commission of $11,056 plus interest; one year suspension of salesperson who availed license

2263 DOS 07 Matter of Giffin- broker; obligation to refund $7,400 commission when lease not effectuated; failure to provide copy of lease which complainant signed; partial rebate of commission is not improper commission splitting; 6 month suspension and until refund $7,400 plus interest

669 DOS 08 Matter of Friedman – salesperson; made unauthorized changes to the MLS listing; failure to schedule open houses and to post signs; prompt return of deposited check payable to broker; complaint dismissed

1412 DOS 08 Matter of Johnson – broker; DOS fails burden of proof of relocation to unlicensed location; no requirement that broker offer be open at any particular time or at all

870 DOS 08 Matter of David – salesperson; advertising on Craig’s List without broker consent; dismissal, as was office policy to do so and no showing of requirement of prior knowledge of broker; misrepresentation of rent in advertisement; improper direct receipt by salesperson (RPL 442-a); failure to use escrow account (RPL 175.1); unlicensed name (RPL §441[1][a]); revocation; no reapplication unless refund $300 plus interest

871 DOS 08 Matter of Rodriguez – broker; unlicensed salesperson; post dated check with insufficient funds; failure to maintain escrow account (175.1); unlicensed name (RPL §441[1][a]); relocation of office without approval (RPL §175.20[d]); 6-month suspension and refund $9,500 with interest

1177 DOS 08 Matter of Menesville – broker; not qualified under RPL 440-a as not citizen or lawful alien; 175.7 failure to make clear and not accept compensation from more than one party without consent; revocation; no reapplication until refund $2,356.50 plus interest

1293 DOS 08 Matter of Delly – unlicensed activity; insufficient evidence of collection of commission; improper advertising 175.25; fraud re: compliance with building code; fraudulent practices

1294 DOS 08 Matter of Chimber – salesperson; forgery and falsifying business records; unlicensed activity; insufficient evidence of failure to provide RPL 443 notice; revocation

1412 DOS 08 Matter of Johnson – broker; DOS fails burden of proof of relocation to unlicensed location; no requirement that broker offer be open at any particular time or at all

1485 DOS 08 Matter of Doty – broker; jurisdiction over expired licensee; requirement to maintain business records for three years §175.23(2); failure to refund deposit; relocation of offices without notice to DOS; revocation; no consideration of reapplication; refund $500 deposit plus interest

388 DOS 09 Matter of David – salesperson; failure of proof re: charge of failure to make refunds (testimony of cash refunds); improper holding out as licensed with former broker; dismissal of charge of unearned commission; restitution of deposits; $1,000 fine

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