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Real estate regulation lags as Legislature raids trust fund

State regulators blame the Legislature for a huge backlog in investigations of rogue real estate professionals.

The backlog could be eliminated, officials say, if the Legislature stopped raiding a trust fund that pays for the investigations.

Real estate license fees and fines go into the trust fund. Those revenues would have been sufficient to hire enough investigators to keep pace with the 35 percent increase in the number of complaints against agents, brokers and appraisers since the housing market imploded in 2006.

But last year, the Division of Real Estate spent less on investigations than it did in 2005.

That's because the Legislature diverted trust fund money to help balance the state budget.

"Every time they do a sweep, it's less money on investigations and investigators," said Michael Guju, vice chairman of the Florida Real Estate Commission. He said the backlog needs to be reduced dramatically so more consumers are not harmed.

Getting back the trust fund money, he said, would keep "the respectable real estate profession respectable."

Guju suggested hiring new investigators under a two- or three-year contract until the backlog is whittled away. That way, he said, the division isn't saddled with unneeded employees once the situation returns to normal.

"We need to show we're serious about fraud," Guju said. "We need to show we're serious about enforcing the laws."

Right now, according to a Times analysis printed last month, most investigations take months, if not years, to get resolved. The lag allows many agents, brokers and appraisers to commit additional misdeeds while initial complaints are being investigated.

The Legislature has taken $7.6 million from the Division of Real Estate trust fund since 2008. The practice is neither new nor improper.

Officials have pleaded with legislators in recent years, but the efforts have failed, said Real Estate Commission member Roger Enzor. "We've made that argument and don't have a lot of choices."

State Sen. Mike Fasano, R-New Port Richey, a member of the Governmental Oversight and Accountability Committee, said he does not want unethical real estate professionals harming the public and understands regulators' frustrations.

"I agree with them," Fasano said.

But he said the Legislature has to balance the budget and has taken several hundred million dollars from other trust funds, like education and environment.

Currently, the Division of Real Estate has 33 investigators and has gained five full-time investigators since 2008.

The $7.6 million taken by the Legislature is part of more than $34 million collected by the Division of Real Estate since 2008 from license fees and fines paid by the 300,000 industry workers.

Mark Puente can be reached at mpuente@sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markapuente.

Real estate regulation lags as Legislature raids trust fund 03/04/11 [Last modified: Friday, March 4, 2011 10:50pm]
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