Stinnett, Michael | Principal Broker | Little Rock, AR
01/07/2013 | Hearing No. 3253
Respondent(s): Louis Butler, Salesperson, and Michael Stinnett, Principal Broker, Stinnett Realty, Little Rock, AR, Formal Hearing 3253
Voilation(s):The Commission found Respondent Butler guilty of violating A.C.A. § 17-42-311(a)(4), 17-42-311(a)(6), 17-42-311(a)(7), 17-42-311(a)(13), 17-42-311(a)(9) and 17-42-311(a)(11), and AREC Regulations 10.7(a)(1), 8.5(a) and 10.1(b). Respondent Stinnett was found to be in violation of A.C.A. § 17-42-311(a)(2) and AREC Regulation 10.4(b).
Sanctions: Respondent Butler’s salesperson’s license was revoked and Respondent Butler was ordered to pay a fine of $5,000 to the AREC within 30 days of the date of the final Order. Respondent Stinnett was also ordered to successfully complete a minimum of six hours broker agent continuing education to be approved in advance by the Executive Director and in addition to the annual continuing education hours required to renew a license. The Executive Director shall determine the time for completing the extra hours. Respondent Stinnett was also ordered to submit a written office policy/procedure manual on agent-owned property within six months of the date of the final Order.
In December 2010, the Subject Property located at 12205 Sundew Cove, North Little Rock, AR, was quitclaimed from the owner Larue Young to Carla Perkins, Respondent Butler’s companion. At the time, the Subject Property was still subject to a mortgage held by BAC Home Loan Servicing. The Quitclaim Deed was never filed with the Pulaski County Circuit Clerk. Respondent Butler had no interest in the Subject Property recorded or unrecorded.
On June 1, 2011, Complainants Karona and Shannon Smith entered into a Residential Lease with Option to Purchase the Subject Property with Respondent Butler. Respondent Butler signed the agreement as Lessor even though the agreement referred to him as Lessee. Complainants Smith paid Respondent Butler $5,000 as a non-refundable down paymentfor the Option to Purchase the Subject Property. The term of the initial lease was 12 months, with $1,100 due each month. The total purchase price of the Subject Property was agreed to be $150,000 minus the down payment.
The $5,000 was not placed in a trust account, escrow account or any account controlled by Respondent Butler’s Principal Broker, Respondent Stinnett. Respondent Butler did not disclose to Complainants Smith that he held an Arkansas Salesperson License. Complainants Smith believed that Respondent Butler was the owner of the Subject Property and that they were leasing the property from Respondent Butler. From June 1, 2011 until June 1, 2012, Respondent Butler collected $1,100 rent each month from Complainants Smith. Those funds were not remitted to Larue Young or the mortgage holder.
On June 20, 2012, Complainants Smith received notice from the Mikel Law Firm of Little Rock, AR, acting on behalf of the mortgage holder, BAC Home Loan Servicing, notifying the Complainants Smith that the Subject Property was in foreclosure and would be sold at the Pulaski County Courthouse if action was not taken. At this time, Complainants Smith discovered that Respondent Butler was not the owner of the Subject Property. On August 3, 2012, Complainants Smith terminated the lease on the Subject Property. Respondent Butler refunded Complainants Smith $3,900 from the original down payment. On August 15, 2012, the Subject Property was sold at foreclosure to Federal National Mortgage Association.
Respondent Stinnett was fully aware of Respondent Butler’s property management activities with respect to the Subject Property, but Respondent Stinnett took no action to ensure that Respondent Butler placed the non-refundable down payment into a trust or escrow account. Respondent Stinnett took no action to ensure that Respondent Butler remitted the monthly rents to him as supervising Broker.