ALJDEC - Licensing

24F-042-REL-RES · Department of Real Estate · 2024-01-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of the Real Estate Activities of:

ROLAND BEST, holder of broker license number BR569044000,

and

BEST ASSET MANAGEMENT, LLC dba APL PROPERTIES, holder of entity license number LC692106000,

Respondents.

No. 24F-042-REL-RES

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: January 11, 2024

APPEARANCES: Assistant Attorney General Raya Gardner represented the Arizona Department of Real Estate. Roland Best failed to appear.

ADMINISTRATIVE LAW JUDGE: Kay A. Abramsohn

EXHIBITS ADMITTED INTO EVIDENCE: Notice of Hearing and Citation; Department Exhibits 1 through 18.

_____________________________________________________________________

FINDINGS OF FACT

1. On or about 2/8/2019, the Department issued original real estate Broker license to ROLAND BEST (“BEST” or “Respondent 1”). BEST’s license expiration date is 2/28/2025.

2. On or about 8/25/2020, the Department issued an entity license to BEST ASSET MANAGEMENT, LLC dba APL PROPERTIES (“APL” or “Respondent 2”). BEST was hired as the Designated Broker on 8/25/2020. APL’s license expiration date is 2/28/2025.

3. According to Arizona Corporation Commission (“ACC”) records, BEST ASSET MANAGEMENT, LLC was incorporated on 6/4/2020. The company in active and in good standing. ROLAND BEST is the only member of the LLC.

Audit/Investigation C23-000322

4. On or about 7/21/2023, the Department received a complaint from Agrawal, a client of the Respondents, alleging that the Respondents were not paying rents collected on behalf of Agrawal.

5. On 7/21/2023, Department investigator Van Fredenberg sent a letter to BEST advising him of an open investigation and requiring that he respond with a written statement and documents. The letter was sent through the Department’s Message Center which subsequently indicated that BEST read the letter on 7/21/2023 at 7:51 p.m. However, BEST did not respond to the letter.

6. On 8/8/2023, Respondents’ client, Kepner, filed a complaint alleging the

Respondents had not remitted monies belonging to Kepner.

7. On 8/8/2023, M. Neat from the Department attempted telephone contact with BEST at the phone numbers on file the Department:

a. Cell number 520-730-7908 went unanswered and the voice mail was full.

b. Office number 520-747-4747 was answered by a service and Neat left a message for BEST to return the call.

8. On 8/9/2023, Van Fredenberg sent a Subpoena by United States Postal Service (USPS) Certified mail to the Respondents at their business address of record, 6403 E. Grant Rd., Tucson, AZ 85715. In addition to requiring BEST to attend a meeting on August 21, 2023, the subpoena directed Respondents to provide the following:

a. All property management agreements with property management log

b. All leases and transaction files

c. List of Operating Account Numbers

d. All Trust Account records; including, but not limited to:

i. Copies of bank signature cards for Trust Accounts

ii. All Trust Account bank statements including current balances

iii. Canceled, voided or imaged checks

iv. Monthly bank reconciliation reports

v. Copies of deposit slips

e. Property Management receipts and disbursement journals

f. Property Management Client ledgers

The Subpoena was returned to the Department as “Attempted-Not Known, Unable to Forward. Return to Sender.”

9. On 8/9/2023, the Department received a complaint from another of the

Respondents’ clients, Smith, who stated that BEST was non-responsive to phone calls and emails and had failed to remit client funds.

10. On 8/10/2023, the Department received a complaint from Respondents’ client Kuhns who stated the Respondents were not responding to phone calls, emails or text messages. The Respondents were withholding funds from Kuhns to pay HOA fees; however, the Respondents had not paid the HOA fees since April, 2023. Further, the Respondents were delaying payments of client funds and not providing documents to which the client was entitled.

11. On 8/11/2023, Respondents client, Pilrose, filed a complaint alleging that the Respondents had not remitted client funds and failed to deposit rent checks and money orders.

12. On 8/17/2023, the Department received a complaint from Hawkins alleging that the Respondents failed to remit the July rent payment. Hawkins also stated that the Respondents’ website was “down” and their Facebook account was “not active.”

13. On 8/21/2023, client Morris filed a complaint alleging that the Respondents had failed to remit client funds to which Morris was entitled.

14. On 8/23/2023, Van Fredenberg received a phone call from P. Little who advised Van Fredenberg that BEST had health issues and was in the process of “selling” the company. Little confirmed the cell telephone number for BEST.

15. On 8/24/2023, Van Fredenberg received another client complaint against the Respondents from Larson.

16. On 8/24/2023, Van Fredenberg received a phone call from Respondent BEST. Best stated that he has medical issues and is referring his clients to another property manager. Van Fredenberg instructed BEST to call all of his clients and provide them with an update of the situation. BEST agreed to do so.

17. On 8/24/2023, Van Fredenberg sent another subpoena to the Respondents at BEST’s email address on file with the Department through the Department’s message center. The subpoena directed BEST to provide books, records and documents to the Department by 8/30/2023 at 9:00a.m. The Department’s Message Center records revealed that BEST read the message at 7:04 p.m. on 8/24/2023.

18. On 8/25/2023, Van Fredenberg sent a copy of the 8/24/2023 subpoena to the Respondents at BEST’s home address. The subpoena directed BEST to provide books, records and documents to the Department by 8/30/2023 at 9:00a.m. The subpoena was received and signed for at 12:09 p.m. on 8/31/2023.

19. On 8/29/2023, Van Fredenberg called BEST and left a message expressing the importance of a call back to answer questions regarding the Department’s ongoing investigation.

20. Van Fredenberg left follow-up voicemails for BEST on 8/30, 8/31, 9/1, 9/5, and 9/6/2023.

21. On 9/6/2023, Van Fredenberg left a voice mail for Gary Best, an employee of APL and possibly a relative of Roland Best. Gary Best returned the call and left a voice mail saying he does not know much about the Property Management side of the business. He offered no further information to the Department.

22. On 9/6/2023, Department employee D. Jones left a voice mail for BEST advising him of the extreme importance and urgency of contacting the Department regarding a pending disciplinary action.

23. On September 7, 2023, the Department issued its Cease and Desist Order and Notice of Right to Request Hearing (CDOrder). As of that date, BEST and APL had failed to produce the subpoenaed records for inspection by the Department.

24. As of the date of the CDOrder, BEST had failed to respond during the course of an investigation or provide a written statement during the course of an investigation or audit.

25. The Cease and Desist Order directed Respondents to immediately cease and desist from engaging in acts, practices and transactions without first complying with all applicable laws and rules, pursuant to A.R.S. §§ 32-2154 (A) and 32-2122(B). The Commissioner ordered the following:

a. Respondents to immediately cease and desist from engaging in any real estate activity including sales, listing, rental and/or leasing activity as defined by A.R.S. §32-2101 et seq. and property management activity, including the collection of rents, as defined by A.R.S. §32-2171 et seq., in any capacity whatsoever, directly or indirectly, within the State of Arizona, without first demonstrating full compliance with all applicable laws and rules and until such time as this [CDOrder] is Vacated by the Commissioner.

b. Within five (5) days of the date of this [CDOrder], provide the Department’s Compliance Division with a complete list of all clients and tenants as of July 1, 2023, including complete name, address, phone number and email address. If Respondents have transferred or assigned the property management accounts of any of the clients on the above list, the list shall clearly identify, by brokerage name and license number, the brokerage to which the account was transferred or assigned.

c. Within five (5) days of the date of this CDOrder], the Respondents shall return the Respondent’s clients all monies Respondents are holding on behalf of the clients along with a full accounting of said funds.

d. Within five (5) days of the date of this order, the Respondents shall return the Respondent’s clients copies of documents to which the client is entitled including, but not limited to leases, accounting information, tax documents, proof of ownership, rental or management contracts or other information pertaining to properties managed by RESPONDENTS.

26. At the time of the hearing, the hearing record demonstrated that BEST has failed to respond to the Commissioner’s lawfully issued subpoena thereby violating the terms of a Commissioner’s 9/07/2023 CDOrder and the terms of the 7/21/2023 administrative letter/order.

APPLICABLE LAW

27. A.R.S. § 32-2101(28) defines "Lease" or "leasing" includes any lease, whether it is the sole, the principal or any incidental part of a transaction.

28. A.R.S. § 32-2101(44) defines “Person” as meaning “any individual, corporation, partnership or company and any other form of multiple organization for carrying on business, foreign or domestic”.

29. A.R.S. § 32-2101(48) defines a “Real Estate Broker” as meaning “a person, other than a salesperson, who, for another and for compensation:

a. (a) Sells, exchanges, purchases, rents or leases real estate or timeshare

interests,

b. (b) Offers to sell, exchange, purchase, rent or lease real estate or timeshare interests,

c. (c) Negotiates or offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate, businesses and business opportunities or timeshare interest,

d. (d) Lists or offers, attempts or agrees to list real estate or timeshare interests for sale, lease or exchange,

e. (g) Collects or offers, attempts or agrees to collect rent for the use of real estate, businesses and business opportunities or timeshare interests,

f. (h) Advertises or holds himself out as being engaged in the business of buying, selling, exchanging, renting or leasing real estate, business and business opportunities or timeshare interests or counseling or advising regarding real estate, businesses and business opportunities or timeshare interests,

g. (i) Assists or directs in the procuring of prospects, calculated to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests,

h. (j) Assists or directs in the negotiation of any transaction calculated or intended to result in the sale, exchange, leasing or rental of real estate, businesses and business opportunities or timeshare interests,

i. (m) Claims, demands, charges, receives, collects or contracts for the collection of an advance fee in connection with any employment enumerated in this section, including employment undertaken to promote the sale or lease of real property by advance fee listing, by furnishing rental information to a prospective tenant for a fee paid by the prospective tenant, by advertisement or by any other offering to sell, lease, exchange or rent real property or selling kits connected therewith. This shall not include the activities of any communications media of general circulation or coverage not primarily engaged in the advertisement of real estate or any communications media activities that are specifically exempt from applicability of this article under section 32-2121.

30. A.R.S. § 32-2171(1) defines a “Property management firm” means any corporation, partnership or limited liability company licensed pursuant to section 32-2125, subsection A or a designated broker that by written agreement, manages rental property or properties for compensation.

31. A.R.S § 32-2154 provides that, if it appears that any person has engaged, is engaging or is preparing to engage in any act, practice or transaction that constitutes a violation of Title 32, Chapter 20, the Department may issue an order directing any person to cease and desist from engaging in the act, practice or transaction or doing any act in furtherance of the act, to make restitution or to take appropriate affirmative action to correct the conditions resulting from the act, practice or transaction.

CONCLUSIONS OF LAW

1. The Department has jurisdiction regarding the licenses and real estate practices of BEST and APL.

2. Respondents, through actions described in Findings of Facts, failed, within a reasonable time, to account for or remit monies to the rightful owner, in violation of A.R.S. § 32-2153(A)(9).

3. Respondents, through actions described in Findings of Facts, failed or refused to produce required records for inspection by the Department, in violation of A.R.S. § 32-2153(A)(17).

4. Respondents, through actions described in Findings of Facts, failed to respond during the course of an investigation, in violation of A.R.S. § 32-2153(B)(10).

5. Respondents, through actions described in Findings of Facts, violated the terms of a Commissioner’s order and an administrative order, in violation of A.R.S. § 32-2153(A)(24) and A.R.S. § 32-2153(B)(8).

6. BEST, through actions described in Findings of Facts, as a licensed broker, failed to exercise reasonable supervision over the activities of salespersons, associate brokers or others under the broker’s employ or failed to exercise reasonable supervision and control over the activities for which a license is required of a corporation, limited liability company or partnership on behalf of which the broker acts as designated broker under section 32-2125, in violation of A.R.S. § 32-2153(A)(21).

7. BEST changed or abandoned the business address of record, 6403 E. Grant Rd., Tucson, AZ 85715, without giving the required written notice to the Commissioner, in violation of A.R.S. § 32-2126(A).

8. Respondents, through actions described in Findings of Facts, disregarded or violated the provisions of this chapter and rules adopted by the Commissioner, in violation of A.R.S. § 32-2153(A)(3).

RECOMMENDED DECISION

IT IS ORDERED the Department’s Cease and Desist Order is Upheld and shall be recorded in the Pima County Recorder’s offices in the State of Arizona;

IT IS FURTHER ORDERED the Real Estate Broker’s License BR569044000 issued to Roland Best is Revoked; and

IT IS FURTHER ORDERED the Entity License LC692106000 issued to BEST ASSET MANAGEMENT, LLC dba APL PROPERTIES is Revoked.

Pursuant to A.R.S. § 41-1092.08(I), the licensee may accept the Administrative Law Judge Decision by advising the Office of Administrative Hearings in writing not more than ten (10) days after receiving the decision. If the licensee accepts the Administrative Law Judge Decision, the decision shall be certified as the final decision by the Office of Administrative Hearings.

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.

Done this day, January 22, 2024.

/s/ Kay A. Abramsohn

Administrative Law Judge

Transmitted electronically to:

Susan Nicolson, Commissioner

Arizona Department of Real Estate

[email redacted]

Roland Best

Best Asset Management LLC

[email redacted]

Raya Gardner

Office of the Attorney General

[email redacted]

By: OAH Staff