Appeal from the Order of the State Real Estate Commission In the Matter of the Disciplinary Proceedings upon the License to Practice Real Estate, License No. RM-027799-A, issued to W. Jack Kalins and In the Matter of the Disciplinary Proceedings upon the License to Practice Real Estate, License No. RB-027894-A, issued to W. Jack Kalins, Inc., File No. 80-RE-786, dated May 4, 1983.
Charles B. Zwally, with him, Edwin W. Tompkins, III, Shearer, Mette & Woodside, for petitioners.
Steven Wennberg, Assistant Counsel, with him, Joyce McKeever, Chief Counsel, Bureau of Professional and Occupational Affairs, and David F. Phifer, Chief Counsel, Department of State, for respondent.
Judges Rogers and Palladino, and Senior Judge Blatt, sitting as a panel of three. Opinion by Judge Rogers.
[ 92 Pa. Commw. Page 571]
W. Jack Kalins and W. Jack Kalins, Inc. (Kalins) have filed a petition for review of an order of the Pennsylvania State Real Estate Commission fining them jointly the sum $500.00 for violation of the Real Estate Licensing and Registration Act (Act), Act of February 19, 1980, P.L. 15, as amended, 63 P.S. §§ 455.101-455.902.
The petitioner W. Jack Kalins is the owner and broker of record of the petitioner, W. Jack Kalins, Inc; both are licensed Pennsylvania real estate brokers. W. Jack Kalins also owns the stock of Vacation Charters, Ltd. which in turn owns in fee a nine acre tract of land in Monroe County on which is located a building called the Carriage House at Pocono Manor. The Carriage House adjoins the Pocono Manor Inn and Golf Club, a well-known Pocono mountain resort.
Under the name Carriage House at Pocono Manor, Vacation Charters, Ltd. sells rights to occupy for one or more weeks a year during the twelve years following the execution of an agreement a choice of accommodations at the Carriage House. Purchasers may thus acquire the right to use a studio, mini suite or royal suite at the Carriage House for one week a year during the twelve year term of the agreement, with option to renew for ten percent of the original price. The purchaser does not obtain the right to use a particular studio or suite but the right to occupy accommodations of the type chosen designated by Vacation Charters, Inc. There is evidence in the record that the cost of a unit, consisting of one week's use each year for twelve years, ranges from $4,495 to $8,495. The sports and recreational facilities of the Pocono Manor Inn and Golf Club are available to purchasers
[ 92 Pa. Commw. Page 572]
of units, some with, some without charge; in addition, purchasers must pay yearly maintenance, membership and club fees.
The purchasers of these variously called, time (or interval) share vacation (or resort), units (or rights), enter into a written agreement with Vacation Charters, Ltd. by which the latter agrees "to make available to the Purchaser the right . . . to reserve for occupancy at the Carriage House . . . for the number of weeks indicated . . . for the next 12 years . . . the type of accommodation designated. . . ." Prospects are also provided a document called Carriage House at Pocono Manor Disclosure Statement which describes some of the terms of a mortgage of the Carriage House property delivered by Vacation Charters, Ltd. to a bank, in which the parties agree that the mortgagor will make sales of "time interval vacation rights . . . transfer[ring] a contract right to use of the mortgaged premises" and that unless the time share purchaser is in default, "no foreclosure . . . shall divest, impair, modify, abrogate and otherwise affect any interests or rights whatsoever of the time interval purchase under said purchaser agreements."
On October 2, 1981, investigators of the Bureau of Professional and Occupational Affairs, a man and a woman, visited Carriage House posing as engaged persons. A man named Palmatessa appeared, identified himself as a sales agent, took the investigators on a tour of the facilities, explained the cost of purchasing units and introduced them to a man named Lancia, whom he identified as the sales manager. Mr. Lancia repeated the sales effort. During the course of these discussions, Mr. Palmatessa told the investigators that the plan of sales of the units had been approved by the Attorney General of Pennsylvania. Messrs. Palmatessa and Lancia were not licensed as real estate salespersons in Pennsylvania.
[ 92 Pa. Commw. Page 573]
The petitioners were cited by the Commission for violating a number of the provisions of the Real Estate Licensing and Registration Act. The Commission, after hearing, concluded that the petitioners had violated subsections (a)(1), (a)(15) and (a)(20) of Section 604 of the Act, 63 P.S. § 455.604, which make the following conduct punishable:
(a)(1) Making any substantial misrepresentation.
(a)(15) Violating any rule or regulation promulgated by the commission in the interest of the public and consistent ...