ALJDEC decisions subject to certification as final

23F-398-REL · Department of Real Estate · 2023-10-25

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate Activities of:

ZUNDEL, KRISTINA,, holder of license number SA,[number redacted],

and

ZUNDEL, DAVID, holder of real estate broker license number BR550249000

Respondents

No. 23F-398-REL

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: October 5, 2023

APPEARANCES: James Rolstead, Esq., Assistant Attorney General, represented the Department of Arizona Department of Real Estate. Respondents failed to appear.

ADMINISTRATIVE LAW JUDGE: Brian Del Vecchio

FINDINGS OF FACT

Kristina Zundel (Respondent 1) is the holder of an active Real Estate Salesperson license number SA631907000. The license was first issued on June 10, 2009.

David Zundel (Respondent 2) is the holder of an active Real Estate Broker license number BR550249000. The license was first issued on December 13, 2013.

Kristina Zundel and David Zundel (collectively, Respondents) are the managers of Great Homes Realty LLC, d/b/a Great Homes Realty (Great Homes). Great Homes is the holder of an active Real Estate Limited Liability license and the designated broker is Respondent 2.

On February 3, 2023 and February 13, 2023, an email was sent from Teresa Horvet, a contractor with Great Homes, to Respondent 1 requesting a copy of Ms. Horvet’s 1099 tax form and informing Respondent 1 her last two ownership draw checks bounced.

On February 17, 2023, Ms. Horvet sent an email to Respondent 1 which informed Respondent 1 of Ms. Horvet’s intention to terminate the contract between her and Great Homes and once again requesting a copy of her 1099.

On February 21, 2023, Ms. Horvet sent another email to Respondent 1 requesting her 1099.

On February 22, 2023, Respondent 1 replied to Ms. Horvet informing her she had been out of town for the past two weeks but she had reached out to her accountant and that the 1099 was allegedly sent on January 31, 2023; however, Ms. Horvet did not receive her 1099. Respondent 1 also informed Ms. Horvet that Great Homes would be closing as of March 31, 2023.

On March 16, 2023, Ms. Horvet submitted a complaint to the Arizona Department of Real Estate (Department) which alleged Respondent 1 and Great Homes failed to supply a 1099 form at the end of the year and failed to return a security deposit.

On March 27, 2023, Department staff sent a demand letter to Respondent 1 regarding the complaint filed by Ms. Horvet. The letter requested copies of Property Management Agreement and Associated Lease Agreements, owner monthly statements for the period of October 2022 through February 2023, owner and tenant ledgers for the period of October 2022 through February 2023, and all final accounting documents. Respondent 1 was given a deadline of April 5, 2023. The Department did not receive any documentation from Respondent 1 by the deadline.

On March 27, 2023, Department staff sent a notification letter to Respondent 2, the designated broker for Respondent 1. The letter informed him of Ms. Horvet’s complainant against Respondent 1 and requested a written signed statement regarding the complaint with a deadline of April 5, 2023. The Department did not receive any documentation from Respondent 2 by the deadline.

On April 12, 2023, Department staff sent a certified letter to Respondent 1 requesting the same information from the March 27, 2023, demand letter. The deadline was April 24, 2023.

The Department did not receive any documents from Respondent 1 by April 24, 2023.

On April 28, 2023, a subpoena was sent certified mail to Respondent 1 which compelled her to appear in person at the Department on May 11, 2023, however she did not appeared..

On May 22, 2023, Richard Rosen submitted a complaint to the Department regarding Respondent 1. The complaint alleged there was a 30 day written notice of cancelled property management. Mr. Rosen was seeking to create a smooth transition between Great Homes and Mr. Rosen’s property management company. Mr. Rosen requested Respondent 1 to transfer documents and deposits to his brokerage, but she failed to supply said documents or deposits. In support of his complaint, Mr. Rosen submitted emails between himself and Respondent 1 which included several requests for the transition documents and security deposits which were never sent.

On June 15, 2023, Jack Rick of Rick Properties LLC, a property management company, submitted a hand written complaint to the Department regarding Respondent 1 and Great Homes. Mr. Rick was attempted to contact Respondent 1 regarding the pay status of his tenants. Mr. Rick was unable to contact Respondent 1 by phone or email and attempted to speak with her in person at her office. When Mr. Rick arrived at Great Homes the office was closed and vacated. Mr. Rick alleged he requested, but did not receive security deposits, maintenance reserve fees, lease agreements, and tax statements.

On June 22, 2023, Department staff sent Respondent 2 a message on the Department’s online support portal messaging center which informed him several complaints had been filed against Great Homes for lack of communication with clients. The Department requested an immediate response, however, Respondent 2 never replied.

On June 23, 2023, the Department sent a subpoena to Respondent 2 which requested an in person appearance at the Department and 6 months of trust/bank statements on all accounts, 6 months of monthly three way reconciliations for all trust accounts, 6 months of owner statements, 6 months of tenant statements, and a signature card. The appearance and document submission deadline was July 5, 2023. Respondent 2 never responded to the subpoena.

On August 21, 2023, a notice of hearing was sent to Respondents which notified them of the hearing set for October 5, 2023, at 1:00 p.m. at the Office of Administrative Hearings.

At hearing, Department’s exhibits 1 through 16 were admitted and Steven Hooper, Senior Investigator at the Department, testified on behalf of the Department.

CONCLUSIONS OF LAW

The Commissioner has jurisdiction over Petitioners and the subject matter in this case.

The Notice of Hearing that the Department mailed to Respondents at their addresses of record was reasonable, and Respondents deemed to have received notice of the hearing.

Pursuant to A.R.S. § 41-1092.07(G)(2) and A.A.C. R2-19-119(B), the Department has the burden of proof in this matter. The standard of proof is by a preponderance of the evidence.

The evidence in this matter was uncontroverted and established violations by Respondent 1 of A.R.S. § 32-2153(A)(3) and (9), A.R.S. § 32-2153(B)(8) and (10), and A.A.C. R4-28-1101(A) and (C).

The evidence in this matter was uncontroverted and established violations by Respondent 2 of A.R.S. § 32-2153(A)(3) and (21) and A.R.S. § 32-2153(B)(8) and (10).

Respondents’ failure to participate in either the audit process or the hearing in this matter established that Respondents cannot be regulated at this time.

Accordingly, the Department established grounds to revoke Respondent 1’s license pursuant to A.R.S. § 32-2153(A)(3) and (9), A.R.S. § 32-2153(B)(8) and (10), and A.A.C. R4-28-1101(A) and (C).

Accordingly, the Department established grounds to revoke Respondent 2’s license pursuant to A.R.S. § 32-2153(A)(3) and (21) and A.R.S. § 32-2153(B)(8) and (10).

RECOMMENDED ORDER

IT IS ORDERED revoking Kristina Zundel’s Real Estate Salesperson license number SA631907000 and David Zundel’s Real Estate Broker license number BR550249000.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, October 25, 2023.

/s/ Brian Del Vecchio

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

By: OAH Staff