RENTAL LISTS AND REPRESENTING LICENSEE EXPERTISE

Rental lists and rental companies / Offering an opinion of title / Offering a representation of value / Misrepresentation of value / Unauthorized practice of law

RENTAL LISTS AND RENTAL COMPANIES

Requirements              

Rental information fee and receipt. If a licensee charges a prospective tenant a fee for a list of rentals, the licensee must also provide the prospective tenant with a written contract or receipt. The contract or receipt must be printed on one side of one page no bigger than 8 ½ x 11 inches. The type size must be 8 point or larger, except for the notice language shown below. The licensee must submit a copy of the contract or receipt to the DBPR within 30 days of signing.

Required language. The rental list contract or fee receipt must contain the following language in 10 point or larger type:

NOTICE PURSUANT TO FLORIDA LAW:

If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. If you do not obtain a rental you are entitled to receive a return of 75% of the fee paid, if you make demand within 30 days of this contract date.

Rental advertising penalties                       

Advertising obsolete or inaccurate rental lists. In addition to being required to refund the fee charged for an inaccurate rental list, the licensee can be disciplined as follows:

• first degree misdemeanor penalty 
  
  If a licensee fails to comply with any of the requirements for providing a contract or receipt or with the refund requirements, he or she is guilty of a misdemeanor of the first degree, punishable by up to 1 year in prison and/or up to $1,000 fine.
  
• license suspension or revocation 
  
  In addition to the punishment for committing a misdemeanor of the first degree, the licensee’s license can be suspended or revoked by the FREC.

Offering an opinion of title

In Florida, real estate licensees are seen as experts in the field of real estate. Consequently, their clients rely on them to provide expert opinions. However, there are some opinions that licensees are not qualified or permitted to provide. For example, an opinion of title is to be provided by an attorney and not by a real estate licensee. The attorney will use the abstract of title to give an opinion of the condition and marketability of the property’s title. It is indeed an opinion and not a guarantee or proof of a clear title.

Under Florida law, no one with a real estate license is allowed to give any opinion on the title to real estate. Instead, a Florida licensee is required to advise the property buyer to consult with an attorney or a title company for an opinion of title and/or to purchase title insurance. Licensees may obtain the opinion from an attorney and then provide information on the title to the buyer.

Offering a representation of value

There are several ways to derive an opinion of a property’s value. Real estate licensees are qualified and permitted to perform comparative market analyses, broker price opinions, and opinions of value and then provide the resulting information to their buyers and sellers. They may not represent any of these methods as an appraisal, which is performed only by a licensed or certified appraiser.

Opinions of value are not subject to regulation nor required to follow any specific professional standards. As a result, licensees who are motivated to obtain a listing may be led to distort the estimated value or price of the property. However, licensees must comply with their duty of honest and fair dealings with their customers and represent the value as accurately as possible with no exaggerations or misrepresentations.

Misrepresentation of value

Again, licensees have a duty to deal honestly and fairly with their customers and clients. They are required to disclose all known facts that materially affect the value of property even when the facts are not readily observable. Omitting a material fact may result in the value of the property being misrepresented. Other ways the value may be misrepresented include the following:

• listing a lower value for the property so as to obtain a quick sale
• overvaluing the property resulting in the buyer paying too much
• misrepresenting the comparable properties to induce a buyer to offer higher than is justified
• misrepresenting the square footage of the property

Misrepresenting the property’s value can constitute fraud, breach of contract, or breach of trust and can result in lawsuits and disciplinary action against the licensee. When a buyer or seller is harmed because of the misrepresentation of value, his or her only real remedy is to file a lawsuit to either rescind the transaction or to seek financial recovery of damages.

The injured party can sue the other party, the licensee, and the brokerage that employs the licensee. Even if the misrepresentation was a mistake, Florida law allows the offending party(ies) to be held liable for negligent misrepresentation.

Unauthorized practice of law

The Supreme Court of Florida established the Unlicensed Practice of Law (UPL) program to protect the public against harm caused by individuals practicing law without a law degree and license. The Florida Bar will investigate and take legal action against anyone practicing law without a license to do so. The unlicensed practice of law is a third-degree felony in Florida, punishable by up to 5 years of probation, up to 5 years in prison, up to $5,000 in fines, and restitution paid to the victim(s).

Practicing law in Florida involves giving advice that requires the legal knowledge of someone who is licensed to practice law. Real estate law is complex, making it easy for innocent people to get hurt by licensees who give advice when they are not educated and licensed to do so.

While licensees need to be familiar with real estate laws, at no time is the licensee allowed to give legal advice. It is common for clients to ask licensees legal questions, but answering those questions could result in the licensee being held liable if the answers are incorrect.

Further, when completing contracts, such as a purchase contract, licensees must not make additions or modifications to the contract itself. To do so is considered the unlicensed practice of law.