Appellate Court Affirms Revocation of Salesperson’s License

The Tenth District Court of Appeals has affirmed an order of the Ohio Real Estate Commission revoking a real estate salesperson’s license (“Licensee”). By way of background, the Licensee and a friend (“Friend”) entered into an agreement whereby a company owned by the Licensee would bid at a tax foreclosure sale on Friend’s property. The two men agreed if Licensee’s company was the highest bidder, Friend could purchase the property back from Licensee’s company.

At the auction, Licensee’s company was the high bidder and paid the deposit, but failed to complete the purchase. Licensee also failed to inform Friend. Subsequently, Friend gave Licensee $41,000.00 for the property, but Licensee didn’t convey the property to the Friend (because Licensee never purchased the property). Friend thereafter filed a complaint against Licensee with the Division of Real Estate. The Division charged Licensee with misconduct and violation of the Canons of Ethics and the case proceeded to hearing before a hearing officer.

The hearing officer found that when a licensee acts on his or her personal account in real estate, this action can be the basis for jurisdiction for the Division to pursue statutory disciplinary action against the licensee. A Division Investigator testified at hearing that after the Licensee bid on the property, Licensee learned there were several liens that would not be extinguished by the Sheriff’s sale. On this basis, Licensee did not complete the purchase but did not tell Friend the purchase was not completed. The hearing officer found after the failed purchase; Licensee entered into a contract with Friend to sell the property to Friend. Thereafter, unaware Licensee never purchased the property, Friend paid Licensee a payment of $20,000.00 and another payment of $21,000.00, for a total of $41,000.00. After Friend found out Licensee never purchased the property, Licensee inexcusably failed to return Friend’s payments.

The hearing officer found Licensee’s conduct deceptive and clear evidence of violations of license law and ethical canons. The hearing officer recommended the Commission find that Licensee violated the sections of law and ethics as charged. The hearing officer’s report was reviewed by the Real Estate Commission, by which time Licensee had only repaid Friend $10,000.00 of the $41,000.00.

The Commission adopted the findings of fact and conclusions of law of the hearing examiner and recommended revocation of Licensee’s license. Licensee’s appeal to the trial court was denied. The Appellate Court found that the Commission’s order was supported by reliable, probative, and substantial evidence and upheld the Commission’s revocation of Licensee’s salesperson license. The Appellate Court’s decision was 3-0.

Here’s what an appellate court ruled on the legality of commission rebates.