Pursuant to notice, this cause was heard by Linda M. Rigot, the assigned Administrative Law Judge of the Division of Administrative Hearings, on January 22, 2009, by video teleconference with sites in Orlando and Tallahassee, Florida.
Daniel Villazon, P.A.
The issue presented is whether Respondent is guilty of the allegations contained in the Administrative Complaint filed
against him, and, if so, what disciplinary action should be taken against him, if any.
On April 15, 2008, Petitioner Department of Business and Professional Regulation, Division of Real Estate, issued an Administrative Complaint against Respondent Elbert Cecil Wright, III, alleging that Respondent had violated several statutes regulating his conduct as a real estate appraiser. Respondent timely requested an administrative hearing regarding the allegations in that Administrative Complaint, and this matter was transferred to the Division of Administrative Hearings to conduct the evidentiary proceeding.
Petitioner presented the testimony of Judy Smith and Ben Cole, III. Respondent testified on his own behalf. In addition, Petitioner's Exhibits numbered 1-7, 9, and 13 and Respondent's Exhibit numbered 1 were admitted in evidence. Official Recognition was granted of Chapters 455 and 475,
Florida Statutes, and of the Uniform Standards of Professional Appraisal Practice and Advisory Opinions, 2005 Edition.
Relevant portions of those documents for which official recognition was granted were only preliminarily marked as Petitioner's Exhibits 10-12 and are contained in Petitioner's exhibit binder.
The Transcript of the final hearing was filed on March 4, 2009. Petitioner's Proposed Recommended Order was filed on March 20, 2009, and Respondent's Proposed Recommended Order was filed on March 23, 2009. All of those documents have been considered in the entry of this Recommended Order.
At all times material hereto, Respondent Elbert Cecil Wright, III, has been licensed in the state of Florida as a state certified residential appraiser. He has been appraising residential property in Central Florida since 1983.
On May 31, 2005, Respondent issued an appraisal report for vacant land known as Lot 212, Bella Collina West, Montverde, Florida. SunTrust Mortgage was Respondent's client and the intended user of the report. SunTrust made no complaints to Petitioner or to Respondent regarding the appraisal Respondent prepared.
Bella Collina, Bella Collina East, and Bella Collina West are subdivisions which were being developed by the same developer. They are separated from each other by roads.
In preparing his appraisal report, Respondent consulted MicroBase and MLS, the multiple listing service. He researched the public records and found there were no prior closed sales in Bella Collina West, where the subject property was located. Moreover, Respondent spoke to the sales staff at Bella Collina
and was advised that there were no prior closed sales in Bella Collina West.
Similarly, in researching the public records, Respondent found that the plat for Bella Collina West had not yet been uploaded so that it was accessible to the public. He did obtain the first page of the 19-page plat from the sales staff at Bella Collina.
Respondent obtained the dimensions of Lot 212 from the sales staff. He was told the lot was 50' by 140' as were most of the lots in Bella Collina West. Respondent used these dimensions in determining the value of the lot and in his appraisal report. Unfortunately, Lot 212 was one of the few lots in the subdivision that was only 40' by 140'. The evidence is undisputed that the difference in the size of the lot between its represented size and its actual size had no impact on its value.
Since the public records reflected no prior closed sales in Bella Collina West and since the sales staff told him there had been no closings, Respondent prepared his report using four comparable properties. Comparable 4 was in Bella Collina West as was the subject property but the sale on comparable 4 was still pending. Comparables 1, 2, and 3 were located in Bella Collina, not Bella Collina West. He used those comparables because of the proximity of the two subdivisions and
because they were both considered upscale and unusual for subdivisions in that county. Even though Bella Collina West did not yet have paved roads, he drove by the subject property, taking photographs, and he viewed the comparables he located.
The lot sizes for comparables 1, 2, and 3 were each approximately 50,000 square feet. Lot 212, the subject property, was thought by Respondent to be only 7,000 square feet but in actuality was only 5,600 square feet. Accordingly, it was necessary for Respondent to adjust or "offset" the value of the subject property because it was a much smaller lot. On the other hand, Lot 212 was located on the golf course which, along with the clubhouse and a number of other amenities, was part of Bella Collina West and not part of Bella Collina.
Lot 212's location on the golf course substantially increased its value even though it was a small lot. Respondent determined based on the closed sales on comparables 1, 2, and 3 that $40,000 was the appropriate adjustment in value to make to offset the smaller size of Lot 212. He also considered the pending sale price for comparable 4 as an indicator although it lacked the reliability of a closed sale price.
In determining the value of Lot 212, Respondent, therefore, considered size, location, and view. He also used the best information available to him as provided by the sales
staff at a time when that information could not be verified by public records.
Because the larger lots were similar in price with the smaller golf course view lot, Respondent computed an offset between a larger lot and a lot with a golf course view. In his appraisal report, he explained the basis for his offset theory and the amount he chose for the offset. No evidence was offered that the intended user of the report did not understand Respondent's explanation or disagreed with it.
Although the comparables Respondent used had much bigger lots than the subject property, the comparables sold for only a slight difference in price. Lot 212's sales price was
$665,900, and Respondent's comparable 1 sold for $685,000, a
$20,000 difference despite the larger lot. Respondent's comparable 2 sold for $625,000 in March 2005, $40,900 less than the subject property despite its larger lot size. Comparable 3 sold for $695,000, a $30,000 difference despite its larger lot size. The pending sale on comparable 4 was for $665,000.
As to comparable 2, with its closed sales price in March 2005 of $625,000, there appeared to be a subsequent sale two months later for $850,000. However, Respondent could not determine if it had actually closed because of conflicts in dates as to when it closed, which appeared to be subsequent to recordation. If it had not closed when he prepared his report,
he was not required to include it in his report. Respondent decided not to include the $850,000 sale because in his professional opinion, it was not a legitimate sale.
As a vacant lot in a subdivision being developed, the subject property had no street address. In the address section of his appraisal report, Respondent made an error and failed to indicate that the property was located in Bella Collina West, stating instead that the property was in Bella Collina.
However, Respondent did accurately provide the legal description which clearly indicated the subject property was located in Bella Collina West. No evidence was offered that the intended user of the appraisal report did not know the subject property was located in Bella Collina West or was confused by Respondent's error.
Although Petitioner's expert would have used different comparables, no evidence was offered to show that the appraised value placed on Lot 212 was inaccurate, negligent, or misleading in any way.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter hereof and the parties hereto. §§ 120.569 and 120.57(1), Fla. Stat.
Petitioner seeks to take disciplinary action against Respondent in this proceeding. The burden of proof, therefore,
is on the Petitioner, and the Petitioner must prove the allegations in its Administrative Complaint by clear and convincing evidence. Dep't of Banking & Finance, Division of Securities & Investor Protection v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996).
The Administrative Complaint filed in this cause contains six counts. Count One alleges that Respondent failed to exercise reasonable diligence in developing the appraisal report on Lot 212, in violation of Section 475.624(15), Florida Statutes. Petitioner has failed to meet its burden of proving by clear and convincing evidence that Respondent failed to exercise reasonable diligence.
After researching the public records, MicroBase, and the multiple listing service, and after inquiring of sales staff at Bella Collina about closed sales in Bella Collina West, Respondent used the only comparable sales available at the time he prepared his report. He made what were, in his professional opinion, appropriate adjustments. No evidence was offered that the intended user of his appraisal report did not understand his adjustments or was misled by his report. Although the size of the lot which he obtained from the sales staff was incorrect, the mistake had no effect on the value of the subject property. Respondent is not responsible for incorrect information provided to him by a reliable source, and no standards for appraisals
require Respondent to always use a second source. Respondent did provide a correct legal description for the property.
Count Two of the Administrative Complaint alleges that Respondent violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-1(a), (b), and (c) of the Uniform Standards of Professional Appraisal Practice (2005) (hereinafter "USPAP"), in violation of Section 475.624(14), Florida Statutes. Standards Rule 1-1 requires that an appraiser (a) be aware of, understand, and correctly employ recognized methods and techniques necessary to produce a credible appraisal, (b) not commit a substantial error of omission or commission that significantly affects an appraisal, and (c) not render services in a careless or negligent manner by making a series of mistakes which in the aggregate affect the credibility of the appraisal.
Petitioner has failed to prove even by a preponderance of the evidence let alone clear and convincing evidence that Respondent violated Rule 1-1 or Section 475.624(14). Petitioner failed to prove that Respondent did not know or employ the techniques necessary to produce a credible appraisal or that he provided careless or negligent services. Further, the evidence is undisputed that the incorrect lot size did not affect the value of the property. Lastly, providing a wrong address in one
place on the report cannot be held to significantly affect the appraisal.
Count Three of the Administrative Complaint alleges that Respondent has violated Standards Rule 2-1(a) of USPAP, in violation of Section 475.624(14), Florida Statutes. That Rule requires that an appraisal report clearly and accurately set forth the appraisal in a manner that will not be misleading. Petitioner failed to prove by clear and convincing evidence that Respondent's appraisal report was misleading or that it failed to contain sufficient information so that the intended user of the report was misled or confused.
In Count Four of the Administrative Complaint, Respondent is charged with violating Standards Rule 2-3 of USPAP, in violation of Section 475.624(14), Florida Statutes. Standards Rule 2-3 requires that a written appraisal report contain a signed certification similar in content to the form suggested in that Standard. Petitioner failed to prove by any evidentiary standard that Respondent failed to sign the required USPAP certification page. Accordingly, Petitioner has failed to prove by clear and convincing evidence that Respondent violated the cited Rule.
Count Five alleges that Respondent is guilty of having had a registration suspended, revoked, or otherwise acted against in any jurisdiction, in violation of Section 475.624(6),
Florida Statutes. The evidence is clear and convincing that twice in the past Petitioner has filed administrative complaints against Respondent related to his responsibilities supervising a trainee and that both time Respondent entered into a stipulated settlement with Petitioner, which resolved those allegations.
To again punish Respondent for the same conduct for which he has already been punished would be unjust and would have a chilling effect on Petitioner's ability to resolve any dispute without litigation if a licensee could be punished for the same conduct over and over again.
In Count Six of the Administrative Complaint, Petitioner alleges that Respondent is guilty of having been found guilty, for a second time, of any misconduct that warrants disciplinary action, or has been found guilty of a course of conduct or practice which shows that he is incompetent, negligent, dishonest, or untruthful to an extent that those with whom he may sustain a confidential relationship may not safely do so, in violation of Section 475.624(10), Florida Statutes. Petitioner has failed to prove its allegations by clear and convincing evidence. No specific finding of guilt of misconduct warranting disciplinary action has been made previously and none is made in this Recommended Order. A fortiori, Petitioner has failed to prove by clear and convincing evidence that Respondent
is guilty of a course of conduct of the type alleged in this Count.
Counts Two, Three, and Four allege not only a specific USPAP Standards violation but also contain the language "or other provision" of USPAP. To the extent that Petitioner is relying upon such a vague reference to justify disciplinary action, it is black-letter law that disciplinary action can only be taken after sufficient proof of a violation that is alleged in a charging document with sufficient specificity to inform the licensee with reasonable certainty of the nature of the charges. See Cottrill v. Dep't of Insurance, 685 So. 2d 1371 (Fla. 1st DCA 1996); Kinney v. Dep't of State, 501 So. 2d 129 (Fla. 5th DCA 1987); Hunter v. Dep't of Professional Regulation, 458 So. 2d 842 (Fla. 2d DCA 1984).
RECOMMENDED that a final order be entered finding Respondent not guilty and dismissing the Administrative Complaint filed against him in this cause.
DONE AND ENTERED this 1st day of April, 2009, in Tallahassee, Leon County, Florida.
LINDA M. RIGOT
Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 2009.
Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and
Daniel Villazon, Esquire Daniel Villazon, P.A.
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
