Real Estate Commission v. Phares

³⁴⁵ Singley, J., delivered the opinion of the Court. This is an appeal by the Real Estate Commission of Maryland [the Commission] from a decree entered by the Circuit Court of Baltimore City in two cases which had been consolidated for trial. The first was a declaratory action instituted by Ron Phares against the Commission, seeking a declaration that Phares was neither a “real estate broker” nor a “real estate salesman” as the terms are defined in Maryland Code (1957, 1972 Repl. Vol.) Art. 56, § 212 (a), § 212 (b) and § 212 (e) and therefore was not subject to the licensing requirement of § 217.

The second action was one instituted by the Commission asking that Phares be enjoined from engaging in any activity for which a broker’s license is required until such time as he might be licensed. The lower court’s decree resolved both cases in Phares’ favor. Phares testified that he was the owner of Homefinders, a sole proprietorship, which he together with five full-time and three part-time salaried employees had operated at 2116 North Charles Street in Baltimore since April of 1972. According to Phares, the nature of the Homefinders operation is essentially the accumulation of information regarding vacancies in the Baltimore metropolitan area, principally houses and apartments.

The information is derived primarily from property owners’ newspaper advertisements and from landlords who respond to newspaper advertisements inserted by Homefinders. This data is assembled on cards, classified according to geographical areas. Each entry describes the property, states the rent, and gives the address and the telephone number of the landlord. For a fee of $20.00 a Homefinders’ customer is given access to these lists.

What Homefinders terms a “policy,” the agreement which the customer signs, gives him access to the lists for a period of a year, and provides that the customer, should he be transferred to another city where there is a Homefinders office, may have access to the lists there, ³⁴⁶ during the one-year period, without the payment of an additional charge. 1 Phares emphasized that Homefinders’ sole function was the accumulation of information regarding vacancies. No charge was made to landlords whose properties were listed; there was no participation in commissions; Homefinders dealt in no properties for its own account, or for the account of others, and the Homefinders staff neither showed properties to prospective tenants nor negotiated with a landlord in a tenant’s behalf. Home-finders’ only contact with a landlord consisted of a telephone call or letter explaining the nature of the service and asking permission to include the property on the list which it maintained, and follow up calls to ascertain whether the property remained vacant and should continue to be carried on the list. Since Phares was the only witness, his testimony was uncontroverted.

The Commission’s case is posited on the definitions contained in Code Art. 56, §§ 212 (a) and 212 (e) : “§ 212. Definitions. (a) ‘Real estate broker’ defined. — ‘Real estate broker’ shall mean any person, association, copartnership or corporation foreign or domestic, who for another and for a fee, commission or any other valuable consideration sells, purchases, exchanges, leases, rents or collects rent for the use of real estate or who attempts or who offers by verbal solicitation, advertisement or otherwise to perform any such function or who is regularly engaged in the business of dealing and trading in real estate or leases and options thereon, or who engages in the business of charging an advance fee or contracting for collection of a fee in connection with any contract whereby he undertakes pri ³⁴⁷ marily to promote the sale of real estate through its listing in a publication issued primarily for such purpose, or for referral of information concerning such real estate