Respondent(s): Christopher Ray, Principal Broker, Edwenna Rowland, Executive Broker, Action Realty, Mt Ida, Arkansas, Formal Hearing #3495
Violation(s): Arkansas Code Annotated §17-42-311(a)(11) and Commission Regulations 8.5(a), 10.4(b), and 10.11
Sanction(s): The Commission votes unanimously that Respondent Christopher Ray be assessed a penalty of $5,000.00, and that Respondent Ray take an additional 30 hour post-broker course, to be completed by December 31, 2017. The Commission votes unanimously that Respondent Edwenna Rowland be assessed a penalty of $1,000.00, and that Respondent Rowland take an additional 30 hour post-broker course, to be completed by December 31, 2017.
On or about February 11, 2003, Respondent Ray purchased subject property in Section 32, Township 2 South, Range 24 West of the Fifth Principal Meridian, in Montgomery County, Arkansas.
Sometime in 2004, Respondent Ray added restrictions to the warranty deed of subject property.
On December 4, 2009, Respondent Ray acting in the capacity as President of Christopher Ray, Inc. listed property owned by Respondent Ray and his wife with his firm, Action Realty, in Mt. Ida, Arkansas. The property was situated in Section 32, Township 2 South, Range 24 West of the Fifth Principal Meridian, in Montgomery County, Arkansas. The expiration date of the Exclusive Right-to-Sell contract was December 30, 2020.
On February 26, 2014, Complainant Buyer David Engelkes entered into a Real Estate Contract to purchase the subject property from Respondent Principal Broker Christopher Ray acting as President of Christopher Ray, Inc. and Principal Broker of Action Realty. By selecting and marking choice "C. LISTING FIRM AND SELLING FIRM ARE THE SAME AND REPRESENT BOTH BUYER AND SELLER" under Paragraph 19 Agency, Respondent Rowland, as Executive Broker and Respondent Ray as Principal Broker of Action Realty represented that Complainant Engelkes was a client of Action Realty. Respondent Ray and Respondent Executive Broker Rowland marked 1-A Item 31 LICENSEE DISCLOSURE on the Real Estate Contract as "Not Applicable."
Sometime prior to preparing the February 26, 2014 offer, Respondent Rowland was showing the subject property to her firm’s client, Complainant Engelkes. Complainant Buyer Engelkes learned and informed Respondent Executive Broker Rowland his mobile home was older than that allowed by established restrictions for the property which stated "manufactured homes shall not be older than ten years of age…". Complainant Engelkes had informed Respondent Executive Broker Rowland that he wanted to purchase property on which he could place his mobile home. Respondent Executive Broker Rowland, acting as agent of her firm’s client, Complainant Engelkes, did not advise Complainant Engelkes that he should consider making his offers on properties contingent on his ability to place his mobile home on the property. Based partly upon his conversation with his agent Respondent Executive Broker Rowland about the restriction, Complainant Engelkes decided to make an offer for the property in anticipation that he would be able to place his mobile home on the property. Respondent Christopher Ray accepted Complainant Engelkes’ offer.
On April 24, 2014, Complainant Buyer Engelkes and Respondent Ray as Seller Christopher Ray Inc. closed the transaction at Mount Ida Abstract & Title Co. Inc.
On May 26, 2015, a Default Judgment Declaring Rights and Granting Mandatory Injunction was issued by the Circuit Court of Montgomery County, Arkansas. Complainant Buyer Engelkes was the defendant and MQ Investments Inc., owner of a neighboring property, was the plaintiff. The judgment ordered Complainant Buyer Engelkes to remove the mobile home located on subject property within 30 days. The judgment ordered Complainant Buyer Engelkes to pay attorney fees and court costs in the amount of $1,250.80.
RECOVERY FUND ORDER
The Commission finds that as a direct result of the proven violations, Respondent Christopher Ray is to pay Complainant David Engelkes $5,723.25, within thirty (30) days of the date of this Order.
If Mr. Ray pays the $5,723.25 to Complainant Engelkes, then the $5,000.00 penalty against Mr. Ray will be waived. However, if Mr. Ray does not pay the $5,723.25 to Complainant Engelkes within that thirty (30) day time frame, then the Recovery Fund will pay it. The Real Estate Commission will then proceed against Mr. Ray for the $5,723.25, plus the $5,000.00 penalty.