STATE OF FLORIDA DEPARTMENT OF BUSINESS & PROFESSIONAL NE FLORIDA REAL ESTATE APPRAISAL BOAR FT E FLORIDA DEPARTMENT OF BUSINESS & PROFESSIONAL REGULATION, Division of Administrative Hearings DIVISION OF REAL ESTATE, U-~3B-0W Petitioner, v. CASE NO. 2003000203 CHARLES BATES, . Respondent. O (9 - [ | ( O p C / ADMINISTRATIVE COMPLAINT The Florida Department of Business & Professional Regulation, Division of Real Estate ("Petitioner") files this Administrative Complaint against Charles Bates (“‘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 general real estate appraiser having been issued license 1042 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 general real estate appraiser at 4649 Caloosa Blvd., Lake Wales, Florida 33853. 4. On or about September 5, 2002, Respondent developed and communicated a complete appraisal report (Report) for subject property commonly known as 2901 Shell Road, Lake Wales, FDBPR v. Charles Bates Case No. 2003000203 Administrative Complaint Florida 33853 (Subject Property). A copy of the report is attached hereto and incorporated herein as Exhibit 1. 5. The Report fails to disclose any departures from the specific requirements of the Uniform Standards of Professional Appraisal Practice (USPAP). 6. At all times material, Subject Property was an income producing property. 7. The Report does not contain a valuation of Subject Property under the income appraoch. 8. The Report does not identify the use of the appraisal. 9. The Report does not identify the scope of work necessary to complete the assignment. 10. The Report does not identify or analyze any land use regulations in effect at the time of appraisal assignment. 11. At the time the report was developed and communicated, the Subject Property was listed for sale. A copy of the listing agreement is attached hereto and incorporated herein as Exhibit 2. 12. The Report does not analyze the listing. 13. The Report does not prominently state the reporting option. 14, The Report does not contain the proper signed certification. COUNT I 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 I . | Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal, specifically Standards 1 and 2, Ethics Rule, Departure 2 FDBPR v. Charles Bates Case No. 2003000203 Administrative Complaint Rule, Competency, or other provision of the Uniform Standards of Professional Appraisal Practice (2002) in violation of Section 475.624(14), Florida Statutes. COUNT III Based upon the foregoing, Respondent is guilty of failing to use proper designation in violation of Rule 61J1-7.002, Florida Administrative Code and Section 475 .622, Florida Statutes and, therefore, in violation of Section 475.624(4), Florida Statutes (2002). WHEREFORE, Petitioner respectfully requesis 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 reprimand; imposition of probation subject to terms including, but not limited to, tequiring 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 61J1-8.002, 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; FDBPR v. Charles Bates Case No. 2003000203 Administrative Complaint 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 order; or any combination of the foregoing which may apply. See Section 455.227, Fla. Statutes and Florida Administrative Code Rule 61J1-8.002. SIGNED this 24 _ day of Sepfauber 2004. Qi pale strap hasabliath Florida Department of Business and Professional Regulation By: Director, Division of Real Estate o> FILED Pepariment of Professional Regulatia.. Division of Real Estate ATTORNEY FOR PETITIONER S. L. Smith, Senior Attorney ‘Bierk Fla, Bar No. 195995 7g /. 2 / Or Division of Real Estate ue Legal Section 400 W. Robinson Street, N801 Orlando, Florida 32801-1757 (407) 481-5632 (407) 317-7260 - FAX PCP: PB/CK 9/04 FDBPR vy. Charles Bates Case No. 2003000203 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 proscribed, 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. ER | i He ee CHARLES 0. BATES, JR., P.A. Tat CHARLES BATES (a UIVISIoN oF ADRIN| STRAT] VE State Certified General Appratser ie Broker HEARINGS 0002042 LIN: DA STEADMAN roker-Salesman September 5, 2002 : State Certified Residentint Appraiser 0001089 DENISE SHELTON Clerk, US District Court State Certified General Appraiser 312 Spring Street ; 002087 Los Angeles, Ca. ; RONALD KEEL Salesman Dear Sirs, Tam submitting the following appraisal on the property of Mrs. Jean Doan, 2907 Shell Road, Lake Wales, Florida 33853, a, . . I personally inspected the property and have made the necessary investigation and analysis of the factors.affecting value, : Itismy opinion the market value of this property as of September 5, 2002 was: $390,000 THREE HUNDRED NINETY THOUSAND DOLLARS T hope this information will be sufficient for your needs. Thank you for the opportunity to serve you. De les Bates, Jr, State Certified General Appraiser RZ, 0000142 Sj ADMINISTRATIVE COMPLAINT EXHIBIT #1 PAGE OF exHipit__/ pace oe ' MAIL 4649 CALOOSA BLVD * OFFICE 4628 U.S, HIGHWAY 27S « LAKE WALES, FLORIDA 33853 OFFICE (863) 638-2203 + HOME (863) 638-2158 » FAX (863) 638-0808 PURPOSE OF APPRAISAL The object of this appraisal is to estimate the market value of the property in question. The market value has been defined by the Society of Real Estate Appraisers as follows: "The price which a property will bring ina competitive market under all conditions requisite to a fair sale, which would result from negotiations between a buyer and a seller, each acting prudently, with knowledge and without undue stimulus." . According to this definition, market value is that value ‘which a knowledgeable buyer and seller would arrive at provided neither party to the sale was unduly forced into the transaction. As the reader can see, inherent in the market value definition is the assumption that the subject property will be sold ata price arrived at by a prudent buyer and seller. From this concept, the American Institute of Real Estate Appraisers has recently altered their definition to state: "Market value. is defined as the most probable selling price." Value must also have a chronological base. Value of a particular. piece of property will in all Probability change from one year to the next and possibly from month to month. Therefore, the value estimate which results from this abpraisal shall be considered reliable on the day in which the subject property was inspected and researched for this appraisal was conducted, There~ fore,the effective date of this appraisal is September 5, 2002. ADMINISTRATIVE COMPLAINT EXHIBIT # | . a PAGE. 2 OF TEER ES EXHIBIT.__| PA ce /& IMPROVEMENT DATA The property being appraised consists of various improve ments. There are 39 mobile home rental spaces, a 1990 Homes of Merit mobile home, a two story converted barn being used for a club house, and a duplex. The park contains septic tanks and a water system for the rental spaces.The larger of the permanent buildings is a converted barn. It has two stories with an apartment and a laundry/recreational area on the first floor. The building is of frame construction with composition and roll roofing, wall air/heat, units, paneled walls, and carpeted floors. There are about 1532 Square feet under roof. The other building is a duplex with two (2) efficiency apart ments. The construction is frame with asbestos shingles, composi tion shingle roof, paneled and dry wall interior walls. There is a screened porch across the entire front of the structure. At the rear of this building there is a small storage building. The 39 space mobile home park has been developed with the excep tion of sewage disposal. Septic tanks are bring utilized at the ‘present time. The main streets are paved with a portion still made of shell/sand. Several of the sites are rented with year round tenent and others are seasonal. The site is located at the intersection of Shell Road and Starr Avenue. The site is level with the roads is irregular in shape ADMINISTRATIVE COMPLAINT EXHIBIT #_/ PAGE gg and contains about 8 acres MOL. exnipit___/ - pace_/7 Woodlawn Ave Dekle Ra Grove Rd = . 4 . fe B a - —-*e <= o Pees = \ the a ¥ RM iL | a _ ia a, th \ ion ry Hammock Rd | me All 27 N Martinique. ay, . | Nlotintain ake Station *, RATE COMPLAINT | PLAT B00K=4, PAGES-72 8, WL HOWE’ LAO (04089 =~C*C~C 3 4S Ne 4 = 1A : > Laat + ag exnipir___| pace__/7 RIGHTS APPRAISED The ownership of real estate is actually a right to the ownership of a group of various rights which are considered to be the basics of land ownership. These are: (1) the right of the user; (2) the right of the exclusion; and (3) the right of . disposition. The right of the user deals with the concept that the owner of a property has the power and the right to use his land in whatever manner he desires. However, the owner's use may be limited by governmental regulations. In order to insure the welfare of the general population the government may set guide linés which favor the interest of the majority over the interests of the individual. Local governments may also restrict the use of land by the power of eminent domain... Through eminent domain, the government May take land from an owner through the courts for whatever public purpose that it deems is for the public good. At this point, it is irrelevant whether the owner wishes to sell the land or not, but the government must pay the landowner a fair market value for it. Another of the rights inherent in land ownership is the right of exclusion. This implies that the landowner has the power to allow or disallow any person from entering or using the owner's property. ADMINISTRATIVE COMPLAINT EXHIBIT #_{ Sn PAGE q OF EXHIBIT | Pace_2 ° RIGHTS APPRAISED (Cont) The last right of a landowner is the right of disposition. This allows the owner of the property to sell, lease, give, or will his property to any person he desires. Aside from the outright ownership of land, there are various other methods of acquiring rights to a Property. One of these is the leasehold in which the owner has agreed to allow another to borrow from him certain rights to the ‘land for which the owner is given consideration in the form of rent or lease Payments. Another method is by a life estate in which the owner of the estate has the right to use the property during his lifetime but in the event of his death, the bundle of rights mentioned above will transfer to a stipulated receiver called the remainderman. It is obvious that the value of the real estate will depend upon the type of rights that an owner or user has in that property. Therefore, for the purposes, of this appraisal, it will be assumed that the owner has complete rights in the property in question. This right is called.a fee simple title and it is this fee simple right to the subject property which will be appraised in this report. Den RATE COMPLAINT EXHIBIT # “AGE hires OF exuipit___/ page 2/ BAroll FF PAGE HIGHEST AND BEST USE Highest and best (most probable) use is defined as that reasonable and most probable use that will support the highest present value, as defined, as of the effective date of the appraisal. Alternatively that use, from among those reasonably probable and legal alternative uses, must be physically possible, appropriately supported, financially feasible and which results in highest land value. The definition immediately above implies specifically to the highest and best use of land. It-is recognized that in cases where a site has existing improvements on it, the highest and best use may very well be determined to be different from the existing use. The existing use will continue; however, unless and until land value in its highest and best use exceeds the total value of the property in its existing use. Within these definitions is recognition that the contribution of that specific use must contribute to community environment or to community development goals in addition to _ wealth maximization of individual property owners. Also implied is that the determination of highest and best use results from the appraisers' judgment and analytical skill, i.e.,that the use determined from analysis represents an opinion not a fact to be found. In appraisal practice, the concept of highest and best use represents the premise upon which value is based. In the context Sof most probable selling price (market value) another appropriate ~jterm to reflect highest and best use would be most probable use. In the context of investment value, an alternative term would be most profitable use. exipit__! ss pace_22- HIGHEST AND BEST USE (con't) From this definition, four points are essential in the , highest and best use analysis. These points must be discussed in terms of the subject site as vacant, as well as improved. The site is evaluated in terms of highest and best use as if vacant in order to provide information concerning the maximum potential of the site, whether as currently improved or with an alternative use. The current improvements are evaluated in this section in order to analyze the benefits derived by the current use in terms of maximum functional utility and maximum profitability. The four points refer to: (1) Possible Use ~ To what uses it is physically possible to put the site in question (2) Permissible Use (Legal) _- What uses are permitted, zoning and deed restriction on the site in question? (3) Feasible Use - What possible and permissible use will produce any net return to the owner of the site? (4) Highest and Best Use - Among the Feasible uses, which use will produce the highest net return . or the highest present worth? With respect to the subject property, the highest and best use of the land would be for a rental mobile home park. The present improvements could enhance this usage. ADMINISTRATIVE COMPLAINT EXHIBIT # [’ ee PAGE 1% 3 EXHIBIT. [pace & STATEMENT OF COMPETENCY Re: Appraisal of a Mobile Home Park on Shell Road, Lake Wales, Florida 33853. The appraiser has sufficient knowledge and experience in the valuation of commercial properties to competently -complete the assignment on the above referenced property. ADMINISTRATIVE COMPLAINT EXHIBIT #_{ PAGE __!3 OF - EXHIBIT. l pace_