Source: https://www.nysar.com/legal/legal-counsel-compendium/disciplinary-offenses/54---vicarious-liability
Timestamp: 2019-11-20 12:38:42
Document Index: 639447984

Matched Legal Cases: ['§442', '§175', '§443', '§443', '§443', '§442', '§442', '§443', '§441', '§443', '§443', '§443', '§441', '§441', '§443', '§175', '§443', '§443', '§443', '§175', '§24']

54. Vicarious Liability
29 DOS 91 Matter of DOS v. Calamari - corporate licensee cannot utilize protection of Real Property Law §442-c. Although there is no evidence that the real estate broker had actual knowledge of the salesperson's wrongful act when committed, broker retained the fee until demand by Division of Licensing Services. (Note that this case raises possibility of escrow of funds in event of dispute cf. City of Chicago v. Matchmaker Real Estate Sales, U.S.D.C., N.D. Ill. 88-C-9695, vicarious liability imposed due to "knowledgeable inaction" with regard to alleged steering reversed on appeal, Nos. 91-2491 and 91-3861, by 7th Cir. (12/10/92) as to punitive damages
52 DOS 91 Matter of DOS v. Levenson - a corporate broker found vicariously liable for sales associate misconduct. Broker is liable for supervisory obligations and cannot assert that other representative brokers are responsible
71 DOS 92 Matter of DOS v. Century 21 Best, Inc. although insufficient evidence of representative broker involvement, corporation vicariously liable for sales associate conduct. (Note this is contrary to Matter of Roberts Real Estate v. DOS, 171 A.D.2d 217) now on appeal to the Court of Appeals
82 DOS 92 Matter of DOS v. Jacobson - no showing of broker's actual knowledge of sales associate's failure to make clear for whom acting per 19 NYCRR 175.9 - no vicarious liability
Matter of Roberts Real Estate v. DOS (80 N.Y.2d 116, October 20, 1992) - Court of Appeals rules no vicarious suspension or revocation of license due to sales associate misconduct where corporation's officers, directors or representative brokers did not have "actual knowledge"; matter remanded to DOS to consider lesser sanction
73 DOS 93 Matter of Roberts - on remand, failure to supervise reduced to sanction of $1,000 fine on corporate broker; fines for representative brokers remain as initially imposed [no discussion of the "failure to disclose" charge which was annulled by the Appellate Division. Under the Court of Appeal's restriction on the imposition of vicarious liability for fines (as opposed to suspension or revocation), only the "failure to supervise" charge was pursued on remand]
155 DOS 92 Matter of Estates Town Country - broker responsible for supervising its "agents" - here ad agency which failed to include broker's name and phone number in newspaper advertisement
158 DOS 92 Matter of Kramer & First American Realty Group - commercial broker not vicariously liable for sales associate misconduct in residential lease transaction: no evidence broker knew of and/or received and retained benefits; no evidence of failure to supervise (associate believed to be no longer active after suffering injury in accident)
CRC #253 (286, 273) Matter of DOS v. Gena DiDonato, Consent Order - representative broker fined for availing of license to unlicensed person; allowed conversion of escrow monies, allowed unlicensed person to serve as officer of licensee corporation - $4,000
51 DOS 93 Matter of DOS v. Florida Connection - consolidated bearings; broker fails to supervise sales associate and fails to use separate escrow account for deposits; representative broker had knowledge - both representative broker and firm failed to supervise
86 DOS 93 Matter of DOS v. Winograd - undisclosed dual agent for tenant and subtenant; failure to provide copy of sublease violates 19 NYCRR §175.11 no suspension of broker who has no knowledge at time of event or retention of proceeds, but liability for own misconduct; refund unearned commission
125 DOS 93 Matter of DOS v. Domovsky - DOS investigation spot checking for RPL §443 compliance, asks broker's son (who was licensee not affiliated with the office, but merely covering in his mother's absence) about use of disclosure notices and to see files; RPL §443 does not apply to apartment house with more than 4 units; charge of failure to use RPL §443 notice and failure to cooperate in investigation dismissed; no proof of demand for records per RPL §442-5[5] of a licensee affiliated with the respondent; no proof of vicarious liability under RPL §442-c
138 DOS 93 Matter of DOS v. 7119 Real Estate - non-solicitation order violated by free "Harmon Homes" publication; DOS fails to prove "take the oriental express" was violation of 175.17(a) blockbusting or an expression of an ethnic limitation; failure to supervise by representative broker; corporate licensee vicariously liable for acts of representative broker
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 control the disclosures required of licensees; subsequently licensed corporation not vicariously liable; failure to provide copy of agreement 175.12; inadvertence considered in determining penalty
94 DOS 94 Matter of DOS v. Pilato - conduct of business under unlicensed name (RPL §441[1]); confusingly similar name (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
86 DOS 94 Matter of DOS v. Lando - RPL §443 acknowledgement to be obtained by licensee involved in transaction; failure of proof that representative broker knew of RPL §443 violation or retained proceeds of transaction after knowledge, therefore no vicarious liability
12 DOS 95 Matter of Morse - respondents' testimony which is inconsistent with documentary evidence is rejected in its entirety; salesperson failed to advise tenant of landlord's credit verification requests, causing them to lose half of their deposits; dual agency without informed consent not established, as licensee signature in space for landlord's was only intended to show who the broker was in the transaction; no failure to make escrow deposit where tenant knew money was to be delivered to landlord; failure of tenant's agent to advise of material information that in delivering deposit to landlord the tenant might lose money; use of unlicensed name; vicarious liability of broker for salesperson misconduct, broker may be fined even in absence of knowledge of salesperson's misconduct; restitution required of broker
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)
54 DOS 95 Matter of DOS v. Bosco, et al. - Steering; reasonable explanation for differential treatment scrutinized; salespersons lying to black testers about advertised home and availability of houses constituted steering, revocation; broker not vicariously liable without actual knowledge or independent finding of untrustworthiness or incompetency; Roberts standard for revocation or suspension; lesser sanctions not automatic
75 DOS 95 Matter of DOS v. Vigilant Capital Corp., et al. - dual agency; vicarious liability; independent contractor; evidence; affirmative duty on broker to supervise associated salesperson - cannot be independent contractor; behavioral nexus between parties established agency relationship - acting as mortgage broker for buyer and real estate broker for seller; failure to disclose dual agency; vicarious liability requires actual knowledge or ratification by either directly or indirectly or retained proceeds; proof of agreements; include DOS investigators reports where no personal knowledge; consumer's complaint is not probative evidence until they testify
103 DOS 95 Matter of DOS v. Lana - fiduciary duty; vicarious liability; dual agency; breach of fiduciary duty where seller's agent advised buyer can purchase property for less than asking price; broker not liable without actual knowledge of misconduct or after notice retains proceeds therefrom; mutually dependent transaction did not arise creating improper double agency; amend pleadings to conform to proof; two month suspension
96 DOS 96, Matter of DOS v. Metro Federal Realty Corp. - Deliberate mailings of solicitation material to homeowners in a cease and desist zone are tantamount to untrustworthiness and incompetence; representative broker knowingly violated DOS Regulations 175.17 and 175.21 where he knew a cease and desist list existed, failed to obtain a copy of the cease and desist list, deliberately mailed solicitations to homeowners in the cease and desist zone, and did not advise associated salesperson of the existence of the cease and desist zone; respondent superior; vicarious liability; corporate broker liable for representative broker’s violations of licensing regulations where representative broker knowingly committed same within scope of regulated brokerage business; representative broker’s knowledge of the wrongful acts is imputed to the corporate broker; $3,000 fine ($500 for each violation)
160 DOS 96, Matter of DOS v. Werner - dual agency; vicarious liability; dependent transactions; unauthorized practice of law; violation of Reg. 175.24 by minor variations in language is de minimus; failure to provide RPL §443 disclosure to seller before entering into listing agreement demonstrates incompetency; representation of buyer and seller in separate but interrelated transactions consists of dual agency and requires informed consent of the parties after full and fair disclosure; licensee did not engage in unauthorized practice of law where contract used did not contain an attorney’s approval clause and was not recommended by a joint bar/Realtors committee where contract was completed by licensee at instruction of buyer’s attorney, licensee instructed seller to consult their attorney and final contract was the product of negotiations between the parties’ attorneys; failure to advise principal when entering into agency agreement of office policy not to co-broker properties for the first 30 days of the listing was a breach of agent’s fiduciary duties; commissions are unearned where agent breaches its fiduciary duties to principal; broker admonished to use exact language of Reg. 175.24 and to use sales contracts containing an attorney’s approval clause; broker fined $2,000.00 and required to disgorge commissions of $7,100.00 plus interest; two salespersons each find $1,000.00
151A DOS 97 Matter of DOS v. Vargas - cease and desist; prior dismissal of charge against broker for violation of 19 NYCRR 175.17(c)(1) for solicitation of a listing of a residential home for sale from a homeowner whose name and address appear on the cease and desist list is reversed on appeal by DOS; license of broker may not be suspended or revoked under the holding in Roberts Real Estate v. Dept. of State (80 N.Y.2d, 116 (1992)) where broker did not have actual knowledge of the violation and did not retain some benefit arising out of it; broker is liable for failure to properly supervise salesperson; $300.00 fine
247 DOS 97 Matter of DOS v. Abreu Realty - dual agency; deposits; fraudulent practice; vicarious liability; broker illegally acted as dual agent without full disclosure and informed consent of buyer and seller in a regulated real estate transaction; broker required to maintain separate, special bank account for the deposit of escrow funds (19 NYCRR 175.1); broker commingles client funds; refusal to return escrow funds constitutes larceny; illegal exercise of right of ownership over principal’s funds is conversion; broker’s failure to establish escrow account, commingling of client funds and illegal retention of escrow monies constitutes fraudulent practice; corporate broker is vicariously liable for the acts of a corporate officer where there is actual knowledge of the misconduct and after notice thereof, the corporate broker retains the benefits, profits and proceeds of the transaction; revocation of corporate broker’s license and representative broker’s license
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
266 DOS 97 Matter of DOS v. Cannon - due process; jurisdiction; vicarious liability; ex parte proceeding is proper where proper service is made; DOS has jurisdiction over a party where disciplinary action is commenced with service of notice of hearing during the two year duration of time a respondent is eligible to automatically apply to renew a prior real estate broker’s license under RPL §441(2); broker is not vicariously liable for misconduct of associated salesperson absent actual knowledge of misconduct; broker may not retain the benefits, profits or proceeds of a transaction wrongfully negotiated (rental of illegal apartment); broker not found to be untrustworthy where, upon learning of violation of law by associated salesperson, broker agreed to return of commission ($550.00) and refunded substantially all thereof ($450.00), failing only to pay balance owed because of a lack of funds; restitution of $100.00 plus interest
274 DOS 97 Matter of DOS v. Fee - due process; laches; fraudulent practice; duty to supervise sales associates; disclosure of agency relationships; vicarious liability; DOS is not estopped from proceeding with investigation after issuing letter to broker advising that DOS was contemplating no further action and was closing the file; broker’s defense of laches fails where broker fails to establish substantial prejudice arising out of the delay; DOS fails to establish salesperson’s conduct was a fraudulent act where, although salesperson knew representations were false and she intended purchasers to act on the misrepresentation, DOS failed to establish that purchasers detrimentally relied on misrepresentations; salesperson engaged in fraudulent practice by making misrepresentation to purchasers (salesperson misrepresents reasons for previous purchasers not going forward with transaction); DOS fails to establish violation of RPL §443 by failing to establish that disclosure form presented in evidence was the disclosure form related to the sale of the subject property; inconsistency in complaint is immaterial where complaint gives respondent sufficient notice of the charges; corporate broker and representative broker demonstrated incompetency by employing unlicensed associate broker; representative broker’s reliance on unofficial lists of licensees supplied by County Board of Realtors is misplaced and demonstrates incompetency; representative broker and corporate broker are vicariously liability for misconduct of salesperson and associate brokers where they have actual knowledge of the misconduct; commission arising out of unlicensed activity of associate broker is unearned; corporate broker and representative broker fined $1,000.00 and directed to disgorge commission of $6,125.00, plus interest; salesperson fined $1,000.00; unlicensed associate broker fined $500.00 and directed to disgorge unearned commission of $6,125.00, plus interest
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
35 DOS 98 Matter of DOS v. Harry Home Sales, Inc. - breach of fiduciary duty; vicarious liability; fraudulent practices; net listing agreement; modification of listing agreement originally providing for brokerage commission of 7% of sales price ($125,000) to a $25,000 payment to the broker to be allocated as commission and for repairs to the property with the seller to receive the $100,000 balance, is not a net listing agreement in violation of 19 NYCRR 175.19 since amount to be retained by broker is not for commission (brokerage fee not based upon difference between purchase price and specified net amount to be paid to the seller); such agreement not unconscionable due to inadequacy of consideration where broker was undertaking monetary risk and could lose financially; broker breaches fiduciary duties of reasonable care, skill, diligence and judgment where he incorrectly advises seller that, to qualify for an FHA mortgage, specific repairs would have to be made to the property when such repairs were not required and seller thereby assumed unnecessary financial obligation; broker breached fiduciary duty of full and fair disclosure when broker became aware that repairs were unnecessary and failed to advise seller thereof; broker’s breach of fiduciary duty resulted in benefit to the broker to the financial detriment of his principal; broker’s breach of fiduciary duties resulted from negligent acts equating to incompetence; broker is not entitled to fee taken in transaction and is liable for the full amount of damages caused by the breach; corporate broker is vicariously liable and law imputes to it actual knowledge of and responsibility for the cognitional acts of its representative broker; restitution in the amount of $22,000 plus interest; failure to present proof of satisfactory compliance will result in license suspension until proof of compliance is submitted
237 DOS 98 Matter of DOS v. Harris -- due process; failure to appear at hearing; jurisdiction; vicarious liability; collateral estoppel; ex parte hearing may proceed upon proof of proper service; DOS retains jurisdiction of a licensee after expiration or surrender of a license where alleged acts occurred while broker was licensed and were within two-year automatic renewal period; refusal to refund unearned commission; broker is obligated to supervise brokerage activities of salespersons and is vicariously liable for the misconduct of its salespersons, limited only with regard to penalty in cases where the broker lacked actual knowledge of misconduct or did not retain any benefit derived from the misconduct; DOS estopped from complaining that broker commingled commissions as issue was determined in prior proceeding and found not have occurred; relicensure by broker or salesperson conditioned upon payment of $1,000 fine and proof that unearned commissions were refunded with interest
243 DOS 98 Matter of DOS v. Top Star Realty Corp. -- failure to appear at hearing; cease-and-desist; vicarious liability; ex parte hearing may proceed upon proof of proper service; delivering flyer in mailbox of home on cease and desist list violates 19 NYCRR 175.21; broker is obligated to supervise brokerage activities of its salespersons; broker is vicariously liable for the misconduct of his salespersons, limited only with regard to penalty in cases where the broker lacked actual knowledge of misconduct or did not retain any benefit derived from that misconduct; corporate broker, representative broker and salesperson each fined $250
274 DOS 98 Matter of DOS v. Queens Express Realty Co. -- cease-and-desist; duty to supervise sales associates; vicarious liability; telephone call from personal assistant to homeowner on cease-and-desist list violated 19 NYCRR 175.17; subsequent appointment at homeowner’s home by broker at homeowner’s request does not violate 19 NYCRR 175.17; one telephone solicitation inadvertently made to one home on cease-and-desist list is not tantamount to untrustworthiness or incompetence and does not support allegation that broker failed to supervise; corporate broker and representative broker may be held vicariously liable for the violation of regulation by an employee acting within the scope of employment and may be assessed a penalty, excluding a suspension or revocation; broker and salesperson to pay total fine of $500
275 DOS 98 Matter of DOS v. Citylife Realty, Inc. -- deposits; duties to supervise sales associates; vicarious liability; failure to appear at hearing; ex parte hearing may proceed upon proof of proper service; collection of rental commissions from tenants in spite of agreement of landlord that it would pay all commissions demonstrated untrustworthiness and incompetency; refusal to return deposit after landlord rejected tenant’s offer to rent demonstrates untrustworthiness and incompetency; broker may be required to return monies received which it is not entitled; broker has the duty to supervise its sales associates and is vicariously liable for their misconduct in making improper demands, except that unless broker received or retained any money in question or was aware of the wrongdoing at the time of its occurrence may only be penalized by fine and not suspension or revocation; representative broker fined $1,000; corporate broker fined $2,000 and required to refund deposit with interest
294 DOS 98 Matter of DOS v. Ansan Realty Corp. -- vicarious liability; subpoena; failure to cooperate with DOS investigation; representative real estate broker implicitly implied that a corporation was lawfully constituted when filed applications for renewal of broker’s license after corporation had been dissolved by proclamation; failure to comply with subpoena duces tecum; subpoena is to be served in the same manner as summons; corporate real estate broker is charged with actual knowledge of representative broker’s unlawful acts and is vicariously liable for the representative broker’s cognizant misconduct; corporate broker and representative broker’s licenses revoked
189 DOS 99 Matter of DOS v. Naftal - listing agreements; deposits; unauthorized practice of law; vicarious liability; amendment of pleading to conform to the proof; improperly altering listing agreement without the consent or knowledge of principal to show the potential commission split with buyer’s broker to meet MLS requirements; preparing and submitting fraudulent MLS change notifications purporting to extend and alter listings; deposit of escrow funds into operating account; preparation of lease constitutes the unauthorized practice of law; pleadings may be amended to conform to the proof and encompass a charge not stated in the complaint where the issue has been fully litigated by the parties and is closely enough related to the stated charges that there is no surprise or prejudice to the respondent; continuing to offer properties for sale after preparation of forged listing extensions violates 19 NYCRR 175.10; DOS fails to establish violation of 19 NYCRR 175.12 for failure to provide copy of listing extension where extension was not authorized by principal; DOS fails to demonstrate demand for unearned commission where broker may have believed they were entitled to a commission; broker’s licenses suspended for one year and thereafter until such time as restitution in the amounts of $5,000.00 and $2,055.40 is made
90 DOS 00 Matter of DOS v. Ezlist, Inc. - apartment information vendors; vicarious liability; Real Property Law Article 12-C applies to the supplying of information concerning the location and availability of real property, including apartment housing, regardless of the medium; Article 12-C applies to the Internet; licensed real estate broker is not exempted from the requirements of Article 12-C; unlawful engagement in the business of apartment information vendor through brokers website via the Internet; licensed corporate broker is vicariously liable; licenses of corporate broker and representative broker suspended until such time as brokers prove that they are not engaged in the unlicensed business of an apartment information vendor
100 DOS 00 Matter of DOS v. Ricketts - deposits; failure to appear at hearing; failure to cooperate with DOS investigation; vicarious liability; ex parte hearing may proceed upon proof of proper notice; corporate broker is vicariously liable for the cognitional acts of its representative broker; broker violates 19 NYCRR §175.1 by placing purchase deposit in an account which was denominated neither as a special nor as an escrow account; failure to return deposit upon demand; broker commits fraudulent practice by accepting a binder deposit on the pretense that they would then convey the purchasers offer to the seller and then failing to convey the offer and failing to refund the deposit; delivering purchase deposit to seller prior to the execution of a contract for sale; sanction increased where broker agreed to execute consent order and failed to do so; corporate and representative broker’s license suspended for six months (from three months) and refund of purchase deposit in the amount of $4,000
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
302 DOS 00 Matter of DOS v. Focer - cease and desist; failure to appear at hearing; vicarious liability; mailing in error of a single, isolated solicitation, while a violation of statute and regulation, is not a demonstration of either untrustworthiness or incompetency; broker cannot be held liable for violation by his salesperson or associate broker unless broker has actual knowledge of the violation and retains some benefit from that violation; charges against associate broker dismissed where evidence insufficient to establish proper service; charges dismissed
332 DOS 00 Matter of DOS v. Joseph - cease and desist; duties to supervise sales associates; vicarious liability; broker cannot be held liable for making of telephone call to person on cease and desist list where no evidence that broker knew that the call was being made or that he retained some benefit therefrom; no allegation broker failed to properly supervise; complaint dismissed
5 DOS APP. 00 Matter of DOS v. Joseph - administrative appeals; vicarious liability; decision of ALJ that broker cannot be held vicariously liable for phone call of sales agent to homeowner on cease and desist list where broker had no actual knowledge of the violation is reversed and the matter is remanded; broker/owner can be held liable for the actions of his or her subordinates and may be sanctioned for any legal violations of employees, so long as the sanction does not include license suspension or revocation (Roberts Real Estate v. New York State Department of State, 80 NY 2d 116 [1992])
379 DOS 00 DOS v. First United Realty, Inc. - deposits; failure to appear at hearing; vicarious liability; broker commingled trust funds and committed conversion by depositing escrow sums into his operating account and using to operate his brokerage business; proof that a check was dishonored proves incompetence; DOS fails to prove broker issued a bad check (failing to establish requisite knowledge and fraudulent intent); corporate real estate broker is charged with actual knowledge of violations of law and is vicariously liable for its representative broker’s cognizant misconduct as a corporate officer
671 DOS 00 DOS v. Kieran O’Brien Real Estate & Construction, Inc. - failure to appear at hearing; failure to pay judgment; vicarious liability; ex parte hearing may proceed upon proof of proper service; failure to pay a judgment lawfully obtained and not overturned is a demonstration of untrustworthiness unless the broker presents valid evidence of inability to pay; corporate real estate broker is vicariously liable for its representative broker’s unlawful acts; representative broker’s and corporate broker’s licenses revoked
238 DOS 01 Matter of DOS v. Empire Home Sales, Inc. - cease and desist; prior violation; duty to supervise sales associates; vicarious liability; salesperson sends two solicitations to homes on cease and desist list; representative broker fails to properly supervise sales associate; representative broker can only be fined for violation by salesperson unless broker knew of the violation at the time of its occurrence or that he profited from it; broker had paid fines ranging from $200 to $600 on six separate complaints over prior three year period; broker’s and salesperson’s license suspended for two months
448 DOS 01 Matter of DOS v. Reid - duty to supervise sales associates; failure to appear at hearing; jurisdiction; vicarious liability; ex parte hearing may proceed upon proof of proper service; DOS retains jurisdiction even though license has expired since license may be renewed merely by submitting an application and paying the appropriate fees; activities of associate broker are governed exclusively by the provisions of RPL Article 12-A as they pertain to real estate salespersons; associate broker is not responsible for the supervision of other sales associates and may not be held vicariously liable for the acts of other salespersons; charges dismissed
869 DOS 01 Matter of DOS v. Hecht - commission; restitution; vicarious liability; the amount of the fee charged by a real estate broker and the fee’s relevance to actual services performed are proper issues for consideration; a real estate broker’s compensation is not regulated by statute and is not legally fixed by custom and usage; power to contract is not unlimited; where a real estate broker fixes a fee far in excess of rates established by custom and usage for a particular brokerage service in the community involved, the amount of the fee must be relevant to and represent charges for some legitimate service actually performed by the broker; element of unconscionability exists where fee charged is three times the maximum fee established by custom and usage; corporate broker liable for the cognitive acts of its representative real estate broker; restitution may be ordered where the brokerage agreement is unconscionable; broker ordered to refund amount in excess of the maximum fee established by custom and usage
103 DOS 02 DOS v. Cheng - fraudulent business practice; vicarious liability; failure to appear at hearing; ex partehearing may proceed upon proof of proper service; broker charged in indictment of committing criminal offenses directly relating to fitness to perform duties as a real estate broker; reasonable cause exists to believe broker committed criminal offenses charged by virtue of grand jury indictment; broker charged with defrauding HUD in a mortgage fraud scheme; corporate real estate broker charged with actual knowledge of and is vicariously liable for representative broker’s cognizant misconduct as a corporate officer; broker’s license revoked
232 DOS 02 DOS v. Liberty Auction Properties, Ltd. - deposits; vicarious liability; res judicata; a judgment rendered in a civil action is not controlling over administrative hearing where actions seek different remedies, neither DOS nor the complaining witness in the administrative proceeding was a party to the civil suit, and the issues litigated in the administrative proceeding were not litigated in the civil action; broker failed to return deposit to buyer after buyer failed to complete sale for good cause and seller’s attorney directed broker to return deposit; seller’s subsequent claim for deposit as liquidated damages litigated in civil action by seller against broker for deposit; broker obtains judgment for deposit pursuant to terms of listing agreement entitling broker to retain deposit upon buyer default where the down payment did not exceed the amount of the commission; broker received deposit in the capacity of a stakeholder and deposit funds remained the property of the buyer upon mutual termination of the transaction by the parties and neither seller nor broker became entitled to the deposit; corporate real estate broker responsible for the cognitional acts of its representative real estate broker; broker to refund $25,000 deposit to buyer and pay $1,000 fine
453 DOS 02 DOS v. Dodd – deposits; DOS fails its burden of proof; failure to appear at hearing; vicarious liability;ex parte hearing may proceed upon proof of proper service; broker breaches fiduciary duty to their seller client by accepting a purchase deposit less than that provided for in sales contract; commingling of deposits; broker allows escrow accounts to be overdrawn on various occasions; broker issues bad check from escrow account; DOS fails to establish when agency disclosure form was given and fails to establish violation of RPL §443; DOS fails to establish broker acted as dual agent; corporate broker responsible for acts of representative brokers; corporate and representative broker’s licenses revoked
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
827 DOS 02 DOS v. Vision Realty Corp. – bad check; disclosure of agency relationships; DOS fails its burden of proof; vicarious liability; salesperson and broker failed to provide agency disclosure form; representative broker retained an unearned commission in a rental transaction where prospective tenant neither occupied nor took possession of the rental accommodation; DOS fails to establish fraudulent practice, breach of fiduciary duty, misrepresentation, failure to supervise, failure to deal honestly with a member of the public, illegally retaining deposit monies or converting monies; notice of protest is presumptive evidence that check was dishonored but not presumptive evidence of insufficiency of drawer’s funds at the time of utterance; DOS fails to establish violation of bad check statute; salesperson admonished; corporate broker and representative broker ordered to refund $850.00 commission and pay $500.00 fine
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
228 DOS 03 DOS v. Tucci – disclosure of agency relationships; dual agency; unauthorized practice of law; vicarious liability; fiduciary agency relationship was created both between the broker and the landlord and between the broker and the tenant; broker fails to provide agency disclosure form to tenant at any time during the employment; broker failed to make it clear to both parties that he was acting as an agent for both parties in violation of 19 NYCRR §175.7; broker engaged in the unauthorized practice of law by preparing a lease agreement; broker’s preparation of lease agreement appears to have been done as a service to the landlord and prospective tenant and not with the intention to circumvent either licensing law or judiciary law; fiduciary obligation of confidentiality continues after the termination of the fiduciary relationship; broker did not breach his duty of confidentiality by providing an affidavit in a civil suit between the landlord and tenant where the information provided was not confidential; broker’s co-partner is vicariously liable for the wrongful acts of the other co-partner committed within the scope of the partnership business as Partnership Law §24 prescribes that all parties are liable, jointly and severally, for the wrongful acts or omissions of the other co-partner committed within the scope of the partnership business; $2,500 fine
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
851 DOS 05 DOS v. Jenkins – bad checks; deposits; failure to cooperate with DOS investigation; vicarious liability; broker failed to make refund of deposit money towards a rental of an apartment when the rental was not consummated; broker issued check drawn on her escrow account which was dishonored due to insufficient funds; broker failed to honor her agreement to make good on the dishonored checks; broker failed to cooperate with DOS investigation by failing to respond to DOS’s numerous telephone messages; broker may be required to return money to which it is not entitled; corporate broker bound by the knowledge acquired by and is responsible for the acts committed by it’s representative broker; corporate broker and individual broker fined $2,000.00 and ordered to refund $1,600.00.
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.
873 DOS 05 DOS v. Golan – failure to pay judgment; failure to cooperate with DOS investigation; vicarious liability; corporate broker, through its representative broker, entered into a stipulation of settlement in summary proceeding and failed to comply with the stipulation; judgment granted against corporate broker; corporate broker is responsible for the acts committed by its representative broker within the actual or apparent scope of his authority and, conversely, representative broker is responsible for the conduct of the corporation; judgment not having been satisfied, broker fails to show it was not possible to do so; charge of failure to cooperate with DOS investigation dismissed where none of the documents which were requested existed; brokers fined $250.00
1019 DOS 08 Matter of Casanova – broker; failure to provide RPL 443 agency disclosure (pleadings conformed to the proof); selling broker not responsible for providing copy of listing agreement 175.7; dismissal of charge of receipt of commission in excess of agreed commission under claim of oral modification; dismissal of charge of improper commission from unlicensed party RPL 441; unlicensed salesperson; forfeiture of commission; suspension; fine of $500; broker 4-month suspension and refund of $6,420 with interest