In a close vote of four to three last week, the Florida Real Estate Commission (FREC) directed its real estate licensees to provide prospective buyers and sellers with disclosure of non-representation, overturning legislation which had been passed earlier this year. The notification, specified in statute, advises consumers not to assume that they are represented and not to disclose information which they want to be held in confidence.

The new notice differs very little from an old Notice of Non-representation which attorneys for the Florida Association of REALTORS® said that the legislature had specifically eliminated.

Earlier this year, FAR had initiated legislation which was intended to eliminate all agency disclosures to consumers. When the Department of Business and Professional Regulation offered amendments to require that the new Important Notice be given to consumers before licensees listed or showed properties, FAR readily accepted DBPR's amendments. FAR succeeded in having the amended bill passed unanimously in both houses of the legislature.

The new law became effective on October 1, and soon provoked a clash between FAR and the DBPR. FAR interpreted the law to mean that no disclosures were required to be given to consumers when licensees did not intend to represent them. DBPR's interpretation was completely different, extending disclosure to all unrepresented parties. DBPR threatened licensees with $100 fines if they did not provide consumers with disclosures spelled out in the amended statute.

FAR filed suit against DBPR to get an administrative court judge's interpretation of the new law. The court would not hear the case due to a technical error in the filing. FAR also petitioned for a "declaratory statement" from FREC, a division under DBPR, with 5 out of 7 members who are also members of FAR.

During the FREC hearing, FAR's chief counsel, Randy Swartz, told Commissioners: "This is not a hearing to determine if this is good law or bad law. It is a hearing to determine what the law says. What is the 'will' of the legislature?"

"The law is quite clear," said Daniel Villazon, chief prosecutor for DBPR. "The legislature added the Important Notice to require 'all' licensees to provide to 'all' prospective buyers or sellers."

After lengthy legal arguments, FREC Chairperson, Anna Taxel Rodriguez, allowed comments from the small audience. Tom Ball, an attorney who represents REALTORS® and developers in the Orlando area, told Commissioners that the new law created numerous problems that had previously been addressed specifically by the old law. That observation caused another person from the audience to say, "I wish that FREC, DBPR and FAR would all get together and get the legislature to rescind this new law. Until the legislators have time to take action, we can all do business a lot better under the rules as they existed before the old law was changed."

A member of the National Association of Exclusive Buyer Agents (NAEBA) and a member of FAR, Robert Delmar countered, "FAR's interpretation of the law is intended to treat consumers like mushrooms - to keep consumers in the dark and feed them fecal fertilizer." That comment brought chuckles from the audience, but no smiles from of FAR attorneys.

Delmar then read into the record excerpts from two articles published by Realty Times, which he described as "the nation's most widely read electronic news source about real estate." One Realty Times article described Florida's (FAR's) law as "non-disclosure" and "the most unfriendly blow to consumer-friendly legislation yet on record." The second article asked: "If Florida becomes the first state to rescind disclosure requirements, should other states follow?"

Delmar also cited NAR publications to bolster his points. One policy, he said, which NAR approved as recently as last June, states: "Licensees need to know exactly what their duties are to avoid lawsuits, and consumers should know exactly what duties they're entitled to from a licensee."

"Removing requirements for agency disclosures would also remove REALTORS® first line of defense against disgruntled consumers," said Delmar, an active lobbyist. "In the absence of signed agency disclosures, these people might likely claim that "they thought the licensees represented them as their agents."

With little further discussion, Commissioner Clifford Stein made a motion that a declaratory statement on the issue might exceed the authority of the FREC. That motion failed and Commissioner Gene Saunders then moved that licensees be required to present the Important Notice specified in statute. "Tear off the descriptions of single agent or transaction broker duties and give the Important Notice to all prospective buyers and sellers, even though you don't intend to represent them," Saunders said.

His motion quickly passed by a minimum margin of four to three.

Editor's note: New information has come to light regarding a story we published on December 20th, Non-disclosure Law Overturned in Florida. Click here to read the correction

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Published: December 20, 1999

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