STATE OF FLORIDA DEPARTMENT OF BUSINESS & PROFESSIONAL REGULATION FLORIDA REAL ESTATE APPRAISAL BOARD “ FLORIDA DEPARTMENT OF BUSINESS & PROFESSIONAL REGULATION, DIVISION OF REAL ESTATE, O1- (,4US pL Petitioner, a Vv. CASE NO. 2008053131 RAUL BASALO, Respondent. / ADMINISTRATIVE COMPLAINT The Florida Department of Business & Professional Regulation, Division of Real Estate ("Petitioner") files this Administrative Complaint against Raul Basalo(“Respondent"), and alleges: ESSENTIAL ALLEGATIONS OF MATERIAL FACT 1. Petitioner is a state government licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to the laws of the State of Florida, including Section 20.165 and Chapters 120, 455 and 475 of the Florida Statutes, and the rules promulgated thereunder. 2. Respondent is currently a Florida state certified residential real estate appraiser having been issued license 6412 in accordance with Chapter 475 Part II of the Florida Statutes. 3. The last license the State issued to Respondent was as a state certified residential real estate appraiser at 13454 SW 289 H:\FREAB\basalo. 131.doc 1 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint Terrace, Homestead, Florida 33027. 4. On or about June 22, 2007, Respondent developed and communicated an appraisal report (Report) on a property commonly known as 1155 Brickell Bay Drive, #2403, Miami, Florida 33131 ‘(Subject Property), valuing the Subject Property at $850,000. A copy of the Report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. 5. The complainant, an employee of JP Morgan Chase/Chase Home Lending commissioned a review appraisal (Review) that valued the Subject Property at $525,000. A copy of the Review is attached hereto and incorporated herein as Administrative Complaint Exhibit 2. ° 6. Respondent, while orally denying having developed and communicated the Report, provided Petitioner’s investigator with a copy of the letter Respondent sent to JP Morgan Chase Bank LTD on September 10, 2008, defending the Report. A copy of that letter is attached hereto and incorporated herein as Administrative Complaint Exhibit 3. 7. Respondent also replied to the complaint by letter to Petitioner’s investigator dated October 15, 2008, a copy of which is attached hereto and incorporated herein as Administrative Complaint Exhibit 4. H:\FREAB\basalo. 131.doc 2 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint 8. Respondent committed the following errors or omissions in the Report: A) Respondent misstated the zoning on the Subject Property; B) Respondent used a gross living area adjustment of $30.00 per square foot when a different square foot adjustment was warranted for the Comparable Sales which consisted of high priced, luxury waterfront condominiums; C) Respondent misstated that there were only 6 listings of condominiums comparable to the Subject Property, and 5 Comparable Sales as of the effective date of the Report, when there were over 100 comparable listings and sales; D) Respondent adjusted for floor location inconsistent with the Subject Property market; E) Respondent utilized Comparable Sales that were not arms length transactions, as the sales price exceeded the previous listing prices for the Comparable Sales by $330,000, $295,000 and $315,000, respectively; F) Respondent improperly adjusted the Comparable Sales for floor location. 9. Respondent failed to keep a copy of the Subject Property work file. H:AFREAB\basalo, 131 .doc 3 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint COUNT ONE Based upon the foregoing, Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction in violation of Section 475.624(2), Florida Statutes. COUNT TWO Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically the Conduct Section of the Ethics Rule, or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT THREE Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 1-1(a), (b) and (c), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT FOUR Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, H:\FREAB\basalo.131.doc 7 4 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint specifically Standards Rule 1-4(a), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT FIVE Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 2-1(a) and (b), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation ‘of Section 475.624(14), Florida Statutes. COUNT SIX Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 2-2(b) (viii), or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. COUNT SEVEN Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards Rule 2-3, or other provision of the Uniform Standards of Professional Appraisal Practice (2006) in violation of Section 475.624(14), Florida Statutes. H:\FREAB\basalo. 131 doc 5 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint COUNT EIGHT Based upon the foregoing, Respondent is guilty of having failed to exercise reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT NINE Based upon the foregoing, Respondent is guilty of failure to retain records for at least five years of any contracts engaging the appraiser's services, appraisal reports, and supporting data assembled and formulated by the appraiser in preparing appraisal reports in violation of Section 475.629, Florida Statutes, and, therefore, in violation of Section 475.624(4), Florida Statutes. WHEREFORE, Petitioner respectfully requests the Florida Real Estate Appraisal Board, or the Department of Business and Professional Regulation, as may be appropriate, to issue a Final Order as final agency action finding the Respondent (s) guilty as charged. The penalties which may be imposed for violation(s) of Chapter 475 of the Florida Statutes, depending upon the severity of the offense(s), include: revocation of the license, registration, or certificate; suspension of the license, registration or certificate for a period not to exceed ten (10) years; imposition of an administrative fine of up to $5,000 for each count or offense; imposition of investigative costs; issuance of a H:\FREAB\basalo.131.doc 6 FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint reprimand; imposition of probation subject to terms including, but not limited to, requiring the licensee, registrant, or certificate holder to complete and pass additional appraisal education courses; publication, or any combination of the foregoing which may apply. See Section 475.624, Florida Statutes and Rule 6101-8.002, Florida Administrative Code. The penalties which may be imposed for violation(s) of Chapter 455 of the Florida Statutes, depending upon the severity of the offense(s), include: revocation of the license, registration, or certificate; suspension of the license, registration, or certificate for a period not to exceed ten (10) years; imposition of an administrative fine of up to $5,000 for each count or offense; imposition of investigative costs; issuance of a reprimand; imposition of probation subject to terms including, but not limited to, requiring the licensee, registrant, or certificate holder to complete and pass additional appraisal education courses; publication; restriction of practice; injunctive or mandamus relief; imposition of a cease and desist notice; or any combination of the foregoing which may apply. See Section 455.227, Fla. Statutes and Florida Administrative Code Rule 61J31-8.002. HAFREAB\basalo. 131.doc : 7 FDBPR v. Raul Basalo Administrative Complaint Case No. 2008053131 SIGNED this 1s day of becembys , 2008. _ggantiteont OF Professional Wes. ~ Division of Real Estate PCP: ~MR/CK 12/08 H:\FREAB\basalo. 131 doc ATTORNEY FOR PETITIONER Be gGtp-Q_0 Donna Christine Lindamood Senior Attorney Fla. Bar No. 273694 Division of Real Estate Legal Section 400 W. Robinson Street, N801 Orlando, Florida 32801-1757 (407) 481-5632 (407) 317-7260 - FAX FDBPR v. Raul Basalo Case No. 2008053131 Administrative Complaint NOTICE TO RESPONDENTS PLEASE BE ADVISED that mediation under Section 120.573 of the Florida Statutes, is not available for administrative disputes involving this type of agency action. PLEASE BE FURTHER ADVISED that pursuant to this Administrative Complaint you may request, within the time allowed by law, a hearing to be conducted in this matter in accordance with Sections 120.569 and 120.57 of the Florida Statutes; that you have the right, at your option and expense, to be represented by counsel or other qualified representative in this matter; and that you have the right, at your option and expense, to take testimony, to call and cross-examine witnesses, and to have subpoena and subpoena duces tecum issued on your behalf if a formal hearing is requested. PLEASE BE FURTHER ADVISED that if you do not file an Election of Rights form or some other responsive pleading with the Petitioner within twenty-one (21) days of receipt of this Administrative Complaint, the Petitioner will file with the Florida Real Estate Appraisal Board a motion requesting an informal hearing and entry of an appropriate Final Order which may result in the suspension or revocation of your real estate license or registration. Please see the enclosed Explanation of Rights and Election of Rights form. H:\FREAB\basalo. 13 1.doc 9 APPRAISAL SOWUTIONS ” File No 070637 _Page #3 saudividual Condominium Unit Appraisal Report File # 070637 The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the markel value of the Subject propery. Property Address 1155 BRICKELL BAY DRIVE Unit # 2403 Cily MIAMI State FL Zip Code 33131 Borrowel JAVIER VICHOT Owner of Public Record ELENA SANCHEZ County DADE Legal Description THE MARK ON BRICKELL CONDO UNIT 2403 UNDIV. 0.27761 INT IN COMMON ELEMENTS, i Assessor's Parcel # 01-4138-080-0920 Tax Year 2006 Proyecl Name THE MARK ON BRICKELL CONDO Phase # 1 Map Reference 54-41-38 Occupant [XX] Owner [_] Tenant {_] Vacant Special Assessments $ N/A Property Rights Appraised (X| Fee Simple { |Leasehoid [_]Other (describe) Assignment Type Dx] Purchase Transaction ial Refinance Transaction [_Jother (describe) i Lender/Clienl TRANSCONTINENTAL LENDING GROUP Address 401FAIRWAY DRIVE STE 100, DEERFIELD BEACH, FL 33441. ls the subject property currently olfered for sale ar has it been offered for sale in the twelve months prior to the effective date of this appraisal? [X] Yes fy No Report data source(s) used, oltering price(s), and date(s). THE SUBJECT PROPERTY WAS LISTED FOR SALE IN FEBRUARY 2007 ON THE MLX SYSTEM. IT WAS LISTED FOR SALE FOR $555,000. THE SUBJECT PROPERTY WAS PURCHASED ON MAY 2007 FOR $555,000. [X] did {_] did not analyze the contract for sale for the subject purchase transaction. Explain the tesults of the analysis of the contract: for sale or why the analysis was not Bes petlormed. UPON ANALYZING THE SALES CONTRACT, THE TRANSACTION APPEARS TO BE AN ARMS LENGTH TRANSACTION, NO SELLER CONCESSIONS 5 WERE OBSERVED. . Fg Contract Price $850,000 Date of Contract 06-12-2007 _Is the properly seller the owner cf public record? ix Yes Li No Data Source(s) PUBLIC RECORDS = is there any financial assistance {loan charges, sale concessions, gift or downpayment assistance, elc ) to be paid by any party on behalt of the borrower? i] Yes No ea!! Yes. report the total dollas amount and describe the items to be paid. THE SALES CONTRACT OID NOT INDICATE ANY CONCESSIONS. AS PER THE BORROWER, THEY DID NOT RECIEVE ANY DOWNPAYMENT ASSISTANCE AND/OR GIFTS OF EQUITY FOR THIS TRANSACTION. RE. Taxes $ 8,047.50 Census Tract 67.01 / 2 HOA $ 700.00 [_} per year >< per month Ss fr s 3 $ a | Note: Race and the racial composition of the neighborhood are not appraisal factors Neighborhood Characteristics Condominium Housing trends ' im Housing [Present land Use % | Urban & Suburban |" } Rura! _1 Property Values [_} increasing Stabie oO Declining PRICE AGE | One-Unil 30% Burit-up XX] Over 75% [_} 25-75% Under 25% |Demand/Supply | Shortage inBatance [_} Over Supply! $ (000) (yts)_ | 2-4 Unit 20% Ay _jRapid [XI Stable Lsiow Marketing Time [_] Under 3 mths [5<}3-6 mths [— ]Over 6mths| 380 low 1 | Multi-Family 40 % EJ Neighborhood Boundaries THE SUBJECT PROPERTY IS LOCATED NORTH OF SE 15 STREET, SOUTH OF SE 8 990: High 18 | Commercial 5% s STREET, EAST OF BRICKELL AVENUE, AND WEST OF BRICKELL BAY. 870 Pied. 8 | Other 5% Fg Neighborhood Description THE SUBJECT NEIGHBORHOOD IS LOCATED IN DOWNTOWN. MIAMI, THE AREA CONSISTS MOSTLY OF MID TO HIGHRISE OFFICE Topography APPEARS LEVEL TO GRADE Size TYPICAL FOR AREA Density MEDIUM/AVG View BAY VIEW | Specific Zoning Classification 04 - CONDOMINIUM Zoning Description CONDOMINIUM i Zoning Compliance [5X] Legal [—} Legal Noncontorming - Do the zoning regulations permit rebuilding fo current density? {| Yes LT No |_| No Zoning i legal (describe) Is the highest and best use of the Subject property as improved (or as proposed per plans and specitications) the present use? x Yes No I No, describe Utilities Public Other (describe) Public Other (describe) Off-site improvements — Type Public Private lectricity FPL. Waler Street PAVED ASPHALT as) none noted Sanitary Sewer Alley NONE NOTED OU = bag “EMA Special Flood Hazard Area? P<] Yes [_]No FEMA Flood Zone VE FEMA Map # 120650 01913 Are tie utilities anc off-site improvements typical for the market area? x Yes [_|No_ INo, describe Are there any adverse site condilions or external factors (easements, encroachments, environmental Conditions, land uses. etc Pot Yes PX] No {i Yes, describe FEMA Map Date 03/02/1994 Data source(s) lor Project information FARES NET/REALQUEST/MLX Project Description Detached Row or Townhouse Garden { | Mid-rise x High-rise Other (describe} General Description | General Description Subject Phase ; ae WProjéet Ineornpiete # 04 Stones 36 STORIES| Exterior Walls CBS # of Units 362) # of Phases i 1|# of Pianned Phases N/A # ol Etevators 4 Roof Surface BUG # of Units Completed 362i # of Unils [362] # of Planned Units N/A (Existing [| Proposed | Tolal # Parking ADQ # of Units tor Sale 25+-| # of Units for Sale | 25+-| # of Units for Sale N/A Under Construction | Ratio (spaces/units) 2/2 # of Units Sold 362} # of Units Sold 362) # of Units Soid N/A} Year Bull 2001 Type COVERED # ol Unis Rented 10% # of Unils Rented 10%| # of Units Rented N/A Etiective Age NEW Guest Parking ADQ _ # of Owner Occupied Units | 90%! # al Owner Occupied Units | 90%) # of Owner Occupied Units WA Project Primary Occupancy x Principal Residence Second Home or Recreational fl Tenant No Developer [| Management Agent - Provide name of management company. Fs the developer/builder in control of the Homeowners’ Association (HOA)? (] Yes Management Group - [<] Homeowners’ Association Does any singie entity (Ihe same individuat, investor group, corporation, etc.) own more than 10% of the total units in the project? [Tres §X No It Yes, describe PROJECT INFORMATI: Was the project created by the conversion of existing building{s} into a condominium? Yes [Xj No _ I! Yes, describe the original use and the date of conversion. Are the units, common elements, and recreational facilities complete {including any planned rehabilitation for a condominium conversion)? x) es [JNo_ItNo, describe | !s there any commercial space in the project? [ Yes IX) No ILYes, describe and indicate the overali perpegigae fil ieiGiakistade / COMPLAI EXHIBIT # — Foam reproduced by Unied Systems Software Company (806i 969-8727 wan uniBasy MATS Fem - Page T O16 t _B Freddie Mac Form 465 (March 2009) Foray IBT_& a 4073 (March 2008) ee senremrm APPRAISAL SOLUTIONS Fite No 070637 Page #4 Individual Condominium Unit Appraisal Report File # 070637 Describe the condition of the project, Quality of construction THE PROJECT IS IN AVERAGE CONDITION. THE QUALITY OF CONSTRUCTION APPEARS TYPICAL/ JAVERAGE TO SIMILAR BUILDINGS IN THE SUBJECTS IMMEDIATE MARKET AREA. Desoribe the common elements and recreational ‘aailities "GREEN AREAS, MAINTENANCE, POOL, GYM, TENNIS COURTS, SECURITY, VALET AND CABLE Tv, Are any common elements {eased to or by the Homeowners’ Associalion? ti Yes [X| No If Yes, describe the renta’ terms and options. gis the project subject 10 a ground rent? ial Yes No It Yes,$ Der year (describe terms and conditions). Are the parking facilities adequate lor the project size and type? Xx Yes oO No _IfNo, describe and comment on the effect on value and Marketabilily, I} aid i did nol analyze the condominium project budget for the current year. Explain the results of the analysis of the budget (adequacy of fees, reserves. efc.), of why “| the analysis was not perlormed. THE APPRAISER WAS UNABLE TO OBTAIN A COPY OF THE CONDO PROJECT BUDGET FROM THE BROKER NOR HOMEOWNER |AT THE TIME OF INSPECTION Are there any other tees (other than reguiar HOA Charges) for the use of the project facilities? {_] Yes &X) No__lt Yes, report the charges and describe. Compared to other competitive projects of similar Quality and design, the subject unit chaige appears High Xx Average [| Low i High or Low, describe. Are there any special or unusual characteristics of the Project (based on the condominium documents, HOA meetings, or other information) known to the appraiser? Yes XJ No! Yes, describe and explain the elfect on value and marketability. Unit Charge $$700.00 per month X 12 = $8400.00 peryear Annual assessment charge per year per square leet ol gross living area = $ 7.41 Utulies inciuded in the unit monthly assessment [~] None [Heal [_} Air Conditroning [_j Electricity [_] Gas DX] Water [XX] Sewer [XJ Cabie [] Other (describe) — General Description Interior" “Wiatetialsjeondition | __—Amarities | __ Applanoes Gar Storage Floor # 24TH FLOOR Floors TILE/CRPT/GOOD Fireplace(s) # Bx] Retrigerator [None # of Levels 1 LEVEL Walis DRYWALL/GOOD WoodStove(s) # _[X|Range/Oven [ |Garage PxjCovered [JOpen Heating Type FA. Fuel ELECTRIC | Trim/Finish WOOD/GOOD. Deck/Patio [XiDisp D