How current events impact your business and real estate holdings

Friday, June 01, 2018

Real Estate Brokerage License Law - 2017 Appeals to Secretary of State - Precedent for Future Cases

In 2017, there were 8 administrative appeals before the Secretary of State concerning license law violations of real estate brokers.

As real estate brokerage professionals, we learn the following rules from these decisions:

  1. Hortman v. DLS (71 DOS APP 17): The 150 days in which an administrative law judge should make their determination is directory, not mandatory, in nature and cannot result in the proceeding being dismissed if violated; instead, an application to a court to compel the decision is the only recourse for a broker awaiting such a decision. Additionally, we are reminded that "efforts undertaken to locate financing to be secured by a mortgage, to pre-qualify potential borrowers, and to coordinate financing are activities which require appropriate licensure" if involving commercial real estate.
  2. Ronald St. Cyr v. DLS (74 DOS APP 17): Deadline periods to make payment on consent orders should be strictly followed, absent proof of a modification. While modification of the deadline was proven, we are reminded that records are everything when dealing with the government. 
  3. Ronald St. Cyr v. DLS (117 DOS APP 17): There is no right to have more time to settle and the default interest rate on a judgment is 9%. All too often clients believe that they have a right to settle; you don't!
  4. Da Huang v. DLS (87 DOS APP 17): If you lose a case on default, always make sure that jurisdiction was obtained over you, which, for real estate brokerage license law complaints, means "by delivery of same personally to the licensee, or by mailing same by certified mail to the last known business address of such licensee... or by any method authorized by the civil practice law and rules." Remember to check the address if certified mail was utilized because if its wrongly addressed, there are grounds for dismissal. 
  5. Banfield v. DLS (85 DOS APP 17): Failure to cooperate with a DLS investigator is grounds for charge pursuant to RPL 442-e(5). Better have a paper trail of efforts to cooperate. We always recommend using the hot potato game when dealing with the government. Make sure they are caught with the hot potato (last contact offering dates) when the music stops.  
  6. Cilino v. DLS (19 DOS APP 17): Defaulting in appearing at a hearing is really bad. 
  7. Goulbourne v. DLS (118 DOS APP 17): An appeal of decision or order of suspension must be made within 30 calendar days of receipt of the decisions / order in compliance with 19 NYCRR 400.2(k). Plus, there are special rules of construction in the General Construction Law about how those 30 days are calculated. Know the rules or don't play the game.
  8. Zubulake v. DLS (19 DOS APP 17): An application for a real estate brokerage license based upon "equivalent experience in general real estate business for a period of at least three years" is determined by a point system set forth at 19 NYCRR 179.3 and is mandatory to be following by the DLS in hearing such an application.  
As can clearly be gleaned, going at it alone or without knowledge of prior decisions is almost certainly fatal if you want to protect your license.