The Issue The Florida Real Estate Commission, herein sometimes called the Plaintiff or the Commission, seeks to revoke or suspend the license of the Defendant, Alan Leavitt, a registered broker, based on allegations that he violated Subsections 475.25(1)(a) and (b), Florida Statutes, as alleged in its administrative complaint filed on December 9, 1976. As is set forth more particularly in its two count administrative complaint, the Commission alleges that the Defendant, while employed as an active broker for Special Realty Corp., acted in his own behalf by advertising and selling several unimproved lots located in Walton County, Florida. It is further alleged that the Defendant made statements in an effort to sell said lots indicating that the lot sizes were 50 feet wide and 150 feet deep, whereas in actuality the lots were only 25 feet wide and 105 feet deep. The complaint alleges that the purchaser consummated the sale for the above referred lots based on the representations made respecting the lot sizes and upon subsequent examination found that the lot sizes were substantially less whereupon the purchaser demanded a refund from Defendant, to no avail. Based thereon, it is alleged that the Defendant is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, etc., in a business transaction in violation of Subsection 475.25(1)(a), Florida Statutes. In count two it is alleged that the Defendant, while registered as an active real estate broker, permitted Isaac Shelomith and Barry Shelomith, registered real estate salesmen, to unlawfully operate as real estate salesmen out of his offices and encouraged them to engage in the sale of lots in Walton County, Florida by means of unscrupulous and unlawful methods involving fraud, and other breaches of trust in violation of Subsection 475.25(1)(a), and (b), Florida Statutes. For all of the foregoing reasons, the complaint alleges that the Defendant is guilty of a course of conduct or practices which show that he is so dishonest and untruthful that the money, property, transactions and rights of investors or those with whom he may sustain a confidential relation, may not safely be entrusted to him, in violation of Subsection 475.25(3), Florida Statutes.
Findings Of Fact Based upon my observation of the witnesses and their demeanor, the pleadings and the admissions contained therein including the arguments of counsel, I make the following: The Defendant, who holds license number 0051095, was a registered real estate broker during times material to the allegations contained in the administrative complaint filed herein. During early October, 1975, Defendant placed in the classified section of the Miami Southside Newspaper, an ad relative to real property located in Walton County, near DeFuniak Springs. On October 14, 1975, Mr. Lionel G. Rush, an unemployed marketing executive, responded to the aforesaid ad to inquire about the advertised lots. He later purchased four lots from the Defendant for the sum of $1,500. The four lots were described in a warranty deed dated October 17, 1975, from Defendant to Lionel G. Rush and Susie M. Rush, his wife. (See Commission's Exhibit #4). Mr. Rush stated that the Defendant advised him that each individual lot was 50 feet in width and 150 feet in depth and it was based on these representations that he purchased the four lots described in the above referenced warranty deed. Mr. Rush, after purchasing the lots, investigated the lot sizes, approximately three weeks later by calling the county clerk for Walton County who advised that the lot sizes were approximately 25 by 105 feet each. He thereafter contacted the Defendant who checked to determine the accuracy of the lot sizes and was able to determine that the lot sizes were 25 by 105 feet as Mr. Rush had informed. Mr. Rush indicated that but for the inaccurate lot sizes, he was pleased with the property purchased from the Defendant. Mr. Rush testified that he advised the Defendant that there were in his opinion, several options available to satisfy or otherwise cure his purchase problems. He first suggested that the Defendant refund a portion of his purchase money to reflect the actual lot sizes conveyed or alternatively Defendant deed over to him another four lots to compensate for the alleged inadequacy of the lot sizes. Alan Leavitt, the Defendant herein, acknowledged that he sold four lots to Mr. Lionel Rush and his wife in Country Club Heights in Ft. Walton Beach. He denied that the lot sizes were recorded by him or upon his direction as the description is now reflected on the warranty deed entered herein. (See Exhibit 4). Defendant testified that after selling the lots to the Rushes, he received a phone call approximately three weeks later from Mr. Rush complaining about the lot sizes. Mr. Rush expressed his desire to get a refund of the purchase money paid or to seek some other restitution. Defendant checked into the matter and was able to determine that the lot sizes were in fact 105 feet by 100 feet. When Defendant was unable to resolve the matter with the Rushes, he offered to return their money back and in fact purchased a money order for the full amount of the purchase price and agreed to absorb all incidental costs connected with the purchase of the property. He stated that the refund offer was made after Mr. Rush tried to bargain over price and in his opinion was trying to get the lots for what was in his opinion, a "ridiculously low price." He testified that when he discerned this, he had no further dealings with Mr. Rush and was only interested in refunding the purchase money price once the Rushes executed a proper deed returning the property to him. He (Defendant) denied ever misrepresenting the lot sizes. Isaac Shelomith, a registered real estate salesman during times material, was called and denied having any employment relationship with the Defendant in any manner during times material to the allegations contained in the administrative complaint filed herein.
Recommendation Based on the foregoing findings of fact and conclusions of law, I hereby recommend that the administrative complaint filed herein be dismissed in its entirety. DONE AND ENTERED this 1st day of June, 1977, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: David B. Javits, Esquire 3628 Northeast Second Avenue Miami, Florida 33137 Alan Leavitt 7100 Fairway Drive Miami Lakes, Florida 33014 Bruce I Kamelhair, Esquire Associate Counsel Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789
The Issue Whether Respondent's registration as a real estate salesman should be suspended or revoked, pursuant to Section 475.25, Florida Statutes. At the hearing, respondent moved to dismiss certain portions of petitioner's second amended administrative complaint on various grounds. Ruling on the motion was reserved and it will be considered in Conclusions of Law herein. At the conclusion of petitioner's case, respondent's motion for a directed verdict was denied.
Findings Of Fact On October 12, 1973, respondent filed application with the petitioner for registration as a real estate salesman. Question 9 on the form application as completed by respondent reads as follows: "9. Have you ever been arrested for, or charged with, the commission of an offense against the laws of municipality, state or nation, including traffic offenses, without regard to whether sentence has been passed or served, or whether the verdict or judgment has been reversed or set aside or not, or pardon or parole granted If yes, state details in full Minor traffic tickets-No court involved." Thereafter, on March 15, 1974, respondent was issued certificate No. 0126461 as a registered real estate salesman in Ft. Lauderdale, Florida. The registration was renewed on April 1, 1975, with expiration date of March 31, 1977. (Petitioner's Composite Exhibit No. 1) On June 22, 1959, respondent was arrested by federal authorities in Miami, Florida, pursuant to a warrant issued by the U.S. District Court of the Middle District of North Carolina upon an indictment charging him with failure to file income tax returns in violation of Title 26, U.S. Code, Section 7203. Respondent pleaded guilty to the offense and, on February 19, 1960, was sentenced to pay a fine of $2,000 and to be confined for a period of one year. The execution of the prison sentence was suspended and respondent was placed on probation for a period of three years subject to payment of the fine and delinquent income tax. (Petitioner's Exhibit 2) On August 13, 1974, the United States Attorney, United States District Court for the Southern District of Florida, filed an information against respondent charging him with willfully filing a fraudulent and false document as to a material matter in an application for enrollment to practice before the Internal Revenue Service, in violation of Title 26, United States Code, Section 7207. On August 27, 1974, respondent pleaded guilty to the offense and was sentenced to pay a fine of $250.00 The offense of which respondent was convicted was based on a negative answer to a question on the application which was similar to question 9 on the application for registration as a real estate salesman. (Petitioner's Exhibit 3, Testimony of Respondent) Respondent testified in denial of any intention to mislead or deceive petitioner as to the fact of his federal conviction in 1960. It was his opinion, based on advice of counsel representing him during those proceedings, that the conviction would be "wiped out" or otherwise expunged from the records in a period of ten years. Accordingly, when his wife was filling out the real estate application for him and inquired about an answer to question 9, respondent told her not to list the arrest and conviction since it has been "wiped out." Petitioner states that he did not read his application before signing and submitting it to petitioner because he relied upon his wife who customarily prepared such documents for him. Petitioner's explanation for his failure to fully answer question 9 of the application is not deemed credible and is insufficiently supported by other evidence. (Testimony of respondent, Sheila Noritis) Petitioner is a competent and efficient accountant and real estate salesman who enjoys a good reputation for truth and honesty in his community. (Testimony of Stratton, Francis, M. Hartigan, J. Hartigan, Langberg, Deschamps, Cubbison, Mullenski, McTaggart; supplemented by respondent's Exhibits 2-4) Respondent sought to introduce into evidence the results of a voluntary polygraph examination to show that in the opinion of the polygraph examiner, respondent was being truthful in his answers to questions bearing on his honest belief that the federal conviction had been "wiped out." Petitioner's objection to the receipt of such evidence was sustained. (Respondent's Exhibit 1 for identification [rejected]).
Recommendation It is recommended that respondent's registration as a real estate salesman be suspended for a period of sixty (60) days, but that the enforcement thereof be held in abeyance for a like period. DONE and ENTERED this 16th day of May, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Bruce Kamelhair, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Bruno Di Giulian and John B. Di Chiara, Esquire Suite 1500, One Financial Plaza Ft. Lauderdale, Florida 33394
Findings Of Fact On October 3, 1975, Respondent filed an application with Petitioner for registration as a real estate broker (Stipulation, Petitioner's Exhibit 2). That said application contained therein Question 8 which is set forth in paragraph 2 of the Amended Complaint and to which Respondent answered "No." (Stipulation, Petitioner's Exhibit 2.) That thereafter the application was approved and the Respondent subsequently received his registration as a real estate broker and has been continuously registered the Petitioner as a broker since December 22, 1975 (Stipulation.) That at the time of the execution of the application, as aforesaid, Respondent'S answer to Question 8 was incorrect in that he failed to reveal, disclose and fully explain a Complaint filed against him on August 6, 1973, in the Circuit Court of the Sixth Judicial Circuit of the State of Florida, in and for Pinellas County, by one Kenneth Beard, an individual, which complaint alleges false representations on the part of the Respondent in a business transaction. A judgment of the aforesaid Circuit Court in the above-mentioned action was in the process of appeal at the time Respondent filed his application for registration as a real estate broker (stipulation.) Respondent testified at the hearing substantially as follows: After the civil action had been filed against him, he sought the advice of counsel who informed him that the complaint therein was defective as a matter of law. He was therefore of the opinion that there was not a viable suit against him at the time he filled out his application, and thus was not attempting to mislead or hide any facts from the Petitioner. He also felt that, since he had not, in fact, committed any fraud or misrepresented any matters to the purchaser of the business in question, a negative answer on the question in the application was justified. However, upon reflection at the hearing, he conceded that, probably he had misread the question and misconstrued its meaning. Respondent's good reputation for truth and veracity in the community and in his business dealings was attested to by past officials of the Clearwater, Largo, Dunedin Board of Realtors (Testimony of Merhige, Blanton).
Recommendation That the Complaint against Respondent, William D. Folz, be dismissed. DONE and ENTERED this 5th day of April, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Frederick W. Jones Staff Counsel Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 Richard B. Moritz, Esquire 801 West Bay Drive Suite 704 Largo, Florida 33540
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found; At all times material to this proceeding, Respondent, M. Emaline Jones was a licensed real estate salesman in the State of Florida, license number, 0045290, and an associate with Crown Real Estate, Inc., (Crown) now known as Daniel Crapps Agency, Inc. (Crapps). On January 20, 1987, John W. Hearne and his wife, Wilhemina Hearne (Hearne) went to the office of First Florida Realty and Auction (First), and met with Jackie Taylor and Jack Endfinger. On that same day, Endfinger showed Hearne the property owned by Sandra Sherman that was listed in the Multiple Listing Service (MLS) with Crapps as the listing agency. On January 21, 1987, a contract for the purchase of the Sherman property at a purchase price of $52,900.00 was executed by Hearne with an addendum requiring owner financing attached. Endfinger, as agent for Hearne with authority to deliver the contract, delivered the contract with the addendum attached to Respondent at Crapps around 4:00 p.m. On January 21, 1987, another contract for the purchase of the Sherman property at a purchase price of $45,000.00 was executed by Al and Shirley Williams and submitted to the Respondent by another associate of Crapps. On January 21, 1987, Respondent reviewed both con- tracts with Katrina Blalock, Office Manager for Crapps. Both contracts along with an expense settlement statement for each contract were presented to, and reviewed with, Sherman by both Blalock and Respondent on January 21, 1987. Both contracts were rejected by Sherman. The Williams contract was rejected mainly due to price. The Hearne contract was rejected due to price and the requirement of owner financing. Sherman authorized Respondent to make a counteroffer with a pur- chase price of $55,000.00 to Williams only. Respondent had no authority from Sherman to make, or accept, a counteroffer to, or from, Hearne. Because of her and her late husband's relationship with Williams, Sherman wanted Williams to have the property if they could come to terms. Upon being advised by Respondent of Sherman's rejection of the Hearne contract, Endfinger contacted Hearne and a counteroffer with a purchase price of $55,000.00 and third (3rd) party financing was executed by Hearne. There is insufficient evidence to establish whether Endfinger verbally advised Respondent of this contract or its terms prior to Sherman entering into a contract for sale with Williams. The contract was never physically delivered to Respondent or anyone else at Crapps at anytime. Either on January 21 or January 22, 1987, Williams, after reviewing Sherman's counteroffer of $55,000.00, made an offer of $52,000.00 which was accepted by Sherman. A contract with the new terms was executed on January 23, 1987, but Williams was unable to fulfill the contract and Hearne eventually purchased the Sherman property for $52,500.00. Subsequent to Sherman and Williams reaching an agree- ment on the property, Endfinger called Respondent, and upon being told of the agreement, told Respondent that Hearne would have given $55,000.00, but did not elaborate on the terms of the second contract executed by Hearne.
Recommendation Based upon the Findings of Fact, Conclusions of Law, the evidence in the record and the candor and demeanor of the witnesses, it is, RECOMMENDED that the Commission enter a Final Order DISMISSING the Administrative Complaint filed herein. Respectfully submitted and entered this 13th day of January, 1988, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of January, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-3993 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the Respondent in this case. Petitioner failed to timely submit any posthearing Proposed Findings of Fact and Conclusions of Law. Rulings on Proposed Findings of Fact Submitted by the Respondent The Respondent's Proposed Findings of Fact were set out in eight (8) unnumbered paragraphs which for purposes of this Appendix I have numbered 1 through 8. Adopted in Findings of Fact 2 and 3 but clarified. Adopted in Findings of Fact 4, 5 and 6 but clarified. Adopted in Finding of Fact 7. The first sentence of paragraph 4 is rejected as not being material or relevant. The balance of paragraph 4 is adopted in Finding of Fact 8. The last sentence of paragraph 5 is rejected as not being material or relevant. The balance of paragraph 5 is adopted in Findings of Fact 7 and 9. Adopted in Findings of Fact 8 and 10 but clarified. Rejected as not supported by substantial competent evidence in the record. Adopted in Finding of Fact 9. COPIES FURNISHED: Darlene F. Keller, Acting Director Division of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32801 Arthur R. Shell, Jr., Esquire Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32801 William J. Haley, Esquire Post Office Box 1029 Lake City, Florida 32056-1029
Recommendation It is recommended that the Administrative Complaint as filed against James E. Annen, for purposes of revocation or suspension of his real estate brokers license no. 0001875 be dismissed. DONE and ENTERED this 22nd day of December, 1976, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Frederick H. Wilsen, Esquire Florida Real Estate Commission 2699 Lee Road Winter Park, Florida 32789 J. C. Adderly, Esquire Adderly, Aloia & Dudley Post Office Box 535 Cape Coral, Florida 33904
Findings Of Fact Based on the admissions of the Respondent, on the testimony of the witnesses, and on the exhibits received in evidence, I make the following findings of fact: Respondent Larry L. Toney is now and was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0089521 in accordance with Chapter 475, Florida Statutes. The last license issued was as a broker, t/a Larry L. Toney Realty, Inc., 4629 Moncrief Road West, Jacksonville, Florida 32209. At the time of the events described below, Ernest W. Mabrey was the owner of a house located at 3926 Perry Street, Jacksonville, Florida. On or about March 3, 1986, the Respondent met with Josephine Watkins, who is the daughter of Ernest W. Mabrey, at her home in Lake Butler, Florida, and advised her and Mr. Mabrey that the property described above, then owned by Mr. Mabrey, was in foreclosure. Ernestine Byrd, another daughter of Mr. Mabrey, was also present. An action to foreclose the mortgage on the subject property had in fact been filed at the time the Respondent met with Ernest W. Mabrey and members of his family. The Respondent requested that Ernest W. Mabrey sign a warranty deed to evidence the fact that he, Ernest W. Mabrey, had no interest in saving the subject property from the then pending mortgage foreclosure action. Josephine Watkins and Ernestine Byrd discussed the proposed transaction before any papers were signed. Ernest W. Mabrey did not object to transferring the subject property. On or about March 3, 1986, Ernest W. Mabrey, as grantor, signed a warranty deed which conveyed the subject property to Emory Robinson, Jr. Mr. Mabrey willingly signed his name to the warranty deed with the understanding that he was releasing his interest in the subject property because he was sick and neither he nor his daughters had the funds necessary to redeem the property. Josephine Watkins helped her father, Mr. Mabrey, write his name on the warranty deed and Ernestine Byrd signed the warranty deed as a witness to her father's signature. At the time the warranty deed was signed, no payments had been made on the mortgage for approximately five years. The Respondent did not promise to pay any money to Mr. Mabrey or his daughters in connection with the transfer of the subject property, nor did they expect to receive any money. The Respondent did not forge any signatures on the warranty deed described above. All of the signatures on that warranty deed are genuine. The grantee in the subject transaction, Emory Robinson, Jr., paid the holder of the first mortgage the sum of $6,787.11 in order to bring the payments to a current status and he assumed the mortgage. The mortgage foreclosure action was then voluntarily dismissed.
Recommendation For all of the foregoing reasons, it is RECOMMENDED that the Florida Real Estate Commission issue a final order in this case dismissing all charges against the Respondent. DONE AND ENTERED this 5th day of May, 1988, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 1988. APPENDIX TO RECOMMENDED ORDER The following are my specific rulings on all proposed findings of fact submitted by the parties. Findings Proposed by Petitioner: Paragraphs 1, 2 and 3: Accepted. Paragraph 4: First two lines accepted. Last line rejected as not supported by competent substantial evidence. Paragraph 5: First sentence is rejected as contrary to the greater weight of the evidence. Second sentence is rejected as constituting subordinate and unnecessary details. Paragraph 6: Rejected as contrary to the greater weight of the evidence. Paragraph 7: Accepted in substance, with additional findings for clarity and completeness. Paragraph 8: It is accepted that the house was conveyed to Mr. Robinson. The remainder of this paragraph is rejected as contrary to the greater weight of the evidence or as not supported by competent substantial evidence. Findings Proposed by Respondent: All of the findings proposed by the Respondent have been accepted in whole or in substance, except as specifically set forth below. In making my findings of fact, I have omitted a number of unnecessary details proposed by the Respondent. Paragraph 8: Rejected as constituting subordinate and unnecessary details. Paragraph 18: Rejected as constituting subordinate and unnecessary details. Paragraph 19: Rejected as subordinate and unnecessary details and as legal argument. COPIES FURNISHED: JAMES H. GILLIS, ESQUIRE DIVISION OF REAL ESTATE POST OFFICE BOX 1900 ORLANDO, FLORIDA 32802 HENRY E. DAVIS, ESQUIRE ROBERTS & DAVIS 816 BROAD STREET JACKSONVILLE, FLORIDA 32202 DARLENE F. KELLER, EXECUTIVE DIRECTOR DIVISION OF REAL ESTATE POST OFFICE BOX 1900 ORLANDO, FLORIDA 32802 WILLIAM O'NEIL, ESQUIRE GENERAL COUNSEL DEPARTMENT OF PROFESSIONAL REGULATION 130 NORTH MONROE STREET TALLAHASSEE, FLORIDA 32399-0750
The Issue The issues are essentially whether Respondent failed to use reasonable diligence on four appraisals of residential condominiums in Orlando done in 2007, and whether he failed to register his appraisal business with Petitioner; and, if so, how he should be disciplined.
Findings Of Fact Respondent is a certified Florida real estate appraiser, holding DBPR license 5422. In 2007, Respondent was appraising through Rush Realty Appraisal Services, LLC (Rush Realty), which he owned and operated. Rush Realty was registered with the Florida Department of State as a limited liability company, but it was not registered with DBPR. The Appraisals In 2007, Rush Realty, through Respondent and a trainee he supervised, appraised four condominium units in a residential complex in Orlando called the Residences at Millenia (Millenia). Three of the appraisals were done in January and the other in June. In January, Rush Realty appraised two of the condos at $279,500 and appraised the third at $258,500; in June, it appraised the fourth condo at $279,500. Respondent is responsible for these appraisals. One January appraisal was based on five comparables, three of which were sales of Millenia condos; one of those three was a pending sale. The other two January appraisals were based on four comparables, two of which were sales of Millenia condos, both of which were pending sales. One of the pending Millenia sales used for the January appraisals was for $290,000 ($282 per square foot, abbreviated psf). The other Millenia pending sale used for the January appraisals was for $279,500 ($272 psf). The closed sales used in the January appraisals included one at Millenia for $209,800 ($204 psf), another at Millenia for $207,400 ($202 psf), two at nearby Sunset Lake Condos for $275,900 ($265 psf), one at Sunset Lake for $259,900 ($251 psf), and one at Sunset Lake for $254,900 ($256 psf). According to the January appraisal reports, the sources of the comparables used by Respondent were the public records and the Multiple Listing Service (MLS) for the closed sales and the Millenia sales office for the pending sales. The June appraisal was based on two Millenia condo sales. These were the two sales that were pending at the time of the January appraisals. According to the June appraisal, those sales closed in March 2007, one at $280,000 and the other at $279,900. The June appraisal listed only the Millenia sales office as the source of the data on the two Millenia closed sales used as comparables for that appraisal. The June appraisal listed only the Millenia sales office as the source of the data on the two Millenia closed sales used as comparables for that appraisal. Respondent's January appraisal reports stated that the price range of properties similar to the subject property sold within the year prior to the appraisal report was from $100,000 to $400,000. In fact, according to MLS, the range was $25,000 to $313,000. Only seven of the 186 comparable sales were over $250,000. Respondent's June appraisal report also stated that the price range of properties similar to the subject property sold within the year prior to the appraisal report was from $100,000 to $400,000. In fact, according to MLS, the range was $102,000 to $313,900. Only four of the 88 comparable sales were over $250,000. Whether Respondent Used Reasonable Diligence The information provided by the Millenia sales office for the pending sales used as comparables for the January appraisals was unverifiable at the time. It was inappropriate for Respondent to use the Millenia sales office as the source of comparables for the January appraisals (or to use it to verify other sources) because Millenia was interested in the transaction for which the appraisals were done. Respondent testified that he and his trainee used a research tool called Microbase to obtain public records information on comparable sales for the appraisals. He testified that the information from the public records used for the January appraisals, and from the Millenia sales office for the June appraisal, was verified by the MLS, HUD-1 closing statements, and contracts. The use of MLS for verification for the closed sales in the January appraisals is indicated by the inclusion of MLS in the part of those appraisal report forms used to indicate data source(s). Although the data and verification sources other than the Millenia sales office and MLS were not indicated on the report forms for the January appraisals, and no source other than the Millenia sales office was indicated on the report form for the June appraisal, Respondent testified that his work files document the use of all of these sources for the closed sales used as comparables in the four appraisals. DBPR questions the veracity of Respondent's testimony regarding his work files and the use of these data and verification sources based on his failure to replicate his work files when asked to do by Petitioner's investigator. DBPR points to no requirement for Respondent to replicate his work files upon request. It appears from the evidence that Respondent understood he was being asked to produce the files, not to replicate (i.e., recreate) them. His response was in the negative based on his explanation that the files had been confiscated by and remained in the possession of the Federal Bureau of Investigation. The FBI has not returned Respondent's work files. Neither party attempted to subpoena the work files in this case, and the work files were not placed in evidence. DBPR also questions the veracity of Respondent's testimony regarding his work files and the use of these data and verification sources based on his failure to use any of the numerous other comparable sales that were available from those sources, most of which were sold for considerably less money than the comparables used by Respondent. For example, for the January appraisals, there were 37 comparable sales in the preceding six months available through MLS that ranged from $39,000 to $235,000; and, for the June appraisal, there were 16 comparable sales in the preceding six months available through MLS that ranged from $134,900 to $190,000. DBPR's expert utilized these comparables in MLS and reached value conclusions that were approximately $90,000 lower than Respondent's. According to MLS, other closed sales at Millenia between July 27, 2006, and January 27, 2007, ranged from $180,000 ($184.82 psf) to $205,000 ($207.49 psf), with an average of $198,472 ($196.96 psf) and a median of $205,000 ($199.42 psf). Comparable sales of condos within a mile from Millenia that closed between July 27, 2006, and January 27, 2007, ranged from $39,000 ($38.24 psf) to $306,000 ($275.93 psf), with an average of $187,279 ($183.82 psf) and a median of $188,500 ($189.95 psf). Comparable sales of condos within a mile from Millenia that closed between January 27, 2006, and January 27, 2007, ranged from $25,000 ($30.56 psf) to $317,900 ($256.28 psf), with an average of $168,468 ($152.69 psf) and a median of $169,650 ($159.49 psf). Respondent testified that he rejected the comparables he did not use based on the properties' relative poor condition, effective age, and lack of amenities. He also testified that, in some cases, the sellers appeared to be in financial distress and extremely motivated to sell, even at lower than market value; or, in other cases, the sellers did not raise their prices as the market rose. Taking all the evidence into account, DBPR did not prove that Respondent did not use any data and verification sources other than the Millenia sales office for the closed sales used as comparables in the four appraisals; however, Respondent inappropriately used pending sales instead of the available comparables and did not diligently review the available comparables before choosing the comparables he used. Instead, he quickly focused on sales at Millennia and Sunset Lakes that were significantly higher than the predominant prices of other comparable sales available to him through MLS and other sources. Respondent failed to exercise reasonable diligence in developing the appraisals and preparing the appraisal reports. If pending sales had not been used as comparables in the January appraisals, or if other available comparables had been used, the appraised values would have been significantly lower. The June appraisal would have been lower if other available comparables had been used. Other Errors in Appraisal Reports For two of the closed sales, in the part of the appraisal report form for describing sales and financing concessions, Respondent mistakenly entered MLS, with an official public records book and page number. This labeling error could have been confusing, but there was no evidence that anyone was misled by the error. The report forms used by Respondent included an addendum indicating that closed sales were used for comparables. This language was inconsistent with the indications elsewhere in the January appraisal reports that pending sales were used for that purpose. While potentially confusing, there was no evidence that anyone actually was misled by the addendum language. The addendum language also stated that all comparables were given equal consideration. Actually, in one of the January appraisals, the higher comparables were given greater weight. In that report, the property appraised for approximately $30,000 more than it would have if all comparables had been given equal consideration. This language was misleading in that computations would have been required to determine that it was in error. USPAP Rule 1-1(a) of the 2006 Uniform Standards of Professional Appraisal Practice (USPAP) requires a real property appraiser to be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal. Respondent violated this rule. Rule 1-1(b) prohibits substantial errors of omission or commission that significantly affect an appraisal. Respondent violated this rule. Rule 1-1(c) of USPAP prohibits rendering appraisal services in a careless or negligent manner, including making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of the results. Respondent violated this rule. Rule 1-4(a) of USPAP requires that, when a comparable sales approach is necessary for a credible result, an appraiser must analyze such comparable sales data as are available. Respondent violated this rule. Rule 2-1(a) of USPAP requires that written and oral appraisal reports be set forth in a manner that is clear and accurate and not misleading. Respondent violated this rule. Aggravating and Mitigating Circumstances Respondent had not been disciplined and had not received a letter of guidance prior to the four appraisal reports at issue in this case. His license was in good standing at the time. When an appraiser does not exercise reasonable diligence in doing an appraisal and preparing the appraisal report and the result is an unreasonably high value conclusion, as happened in the four appraisal reports at issue in this case, and a lender relies and acts on the appraisal report, the lender is harmed ipso facto, and the borrower and public may also be harmed, notwithstanding that many residential loans defaulted after 2007 besides the loans made based on these four appraisals. There was no evidence as to the specific extent of the actual harm to this lender. Although DBPR filed a separate administrative complaint for each of the four appraisals, the conduct complained of in each administrative complaint was similar. Each administrative complaint has three counts: one for not using reasonable diligence in doing the appraisal and preparing the appraisal report; another for not registering Rush Realty; and a third for violating USPAP provisions. Respondent testified without contradiction that revocation or suspension of his appraisal license, and even a substantial fine, would be a devastating financial hardship to him and his family.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that DBPR enter a final order finding Respondent subject to discipline under sections 475.624(4) (through violations of section 475.623, USPAP, and rule 61J-9.001) and 475.624(15); suspending his license for three months, subject to probation upon reinstatement for such a period of time and subject to such conditions as the Board may specify; fining him $2,000; and assessing costs related to the investigation and prosecution of the cases in accordance with section 455.227(3)(a). DONE AND ENTERED this 26th day of October, 2012, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2012.
Findings Of Fact Jeralne C. Burt is registered with the Florida Board of Real Estate as a salesperson and was so registered at all times here involved. In the fall of 1977, Barbara Rogers came to Respondent's home seeking to purchase residential real estate and was shown several houses by Respondent. One of these houses she agreed to purchase. When asked how she wanted the contract made out, Barbara Rogers said make the contract in the name of Louise Rogers, her sister. The contract to purchase was prepared and given to Barbara Rogers to have executed. When this contract (Exhibit 1) was returned to Respondent it was signed Louise Rogers as the buyer, but the signature was not witnessed. After being assured that Louise had signed the contract to purchase, Respondent signed as a witness to the previously unwitnessed signature of Louise Rogers. At the time this offer was executed by the buyer, Respondent understood that Barbara Rogers was putting up the money for the cash required over the mortgage. Thereafter, Louise Rogers proceeded to the bank where the necessary documents were executed to qualify for an FHA morgage on the property. At the designated closing date Respondent drove to Barbara Rogers' house where Barbara was picked up and they went to the place Louise worked to pick her up. Louise came out to the car and told Respondent that she couldn't get off work and that Barbara could sign the papers for her. When Respondent said she thought Louise should come to the closing to sign, Louise replied that she and her sister signed each other's names all the time and that it was all riht for Barbara to execute the papers. Respondent and Barbara Rogers proceeded to the closing. No one inquired if Barbara Rogers was Louise Rogers, nor was she ever introduced as Louise Rogers. At the closing Barbara Rogers signed Louise Rogers' name on the various documents presented for signature. Due to the house requiring some repairs the closing was kept in escrow for approximately one week to ten days. During this escrow period the mortgage processor at the Barnett Bank, who had processed the application of Louise Rogers, received a phone call from a woman identifying herself as Louise Rogers inquiring when the closing on the house was to take place. When Louise Rogers said she had not executed any papers for the closing the bank officials quickly re-assembled the parties and this time all documents were executed by the real Louise Rogers. Although Respondent realized Louise Rogers should have signed the documents at closing, because of Louise's insistence that Barbara could sign for her and Respondent's previous experience of signing her grandmother's name for her the past two years of her grandmother's life, Respondent assumed the authorization for Barbara to sign Louise's name had been given.
Findings Of Fact While working as a real estate salesperson in Deanna Duncan's office in the fall of 1976, respondent quarreled with Ms. Duncan about, among other things, their relative shares of real estate commissions. Respondent, who has been a real estate salesperson off and on since 1967, decided to leave Ms. Duncan's employ; and telephoned various brokers, including, eventually, Dean Downs, for whom she had worked from 1969 to 1971. Mr. Downs, who testified that he did not take respondent's abilities as a real estate salesperson seriously, was preoccupied with a development project on the east coast called Shoreham by the Sea and with his efforts to secure refinancing of a tract of land in Maitland, when respondent contacted him. He agreed to sign the appropriate papers to effect a transfer of respondent's certificate to his office, but he told respondent that he would be out of town most of the time and unable to supervise her. Respondent and Mr. Downs agreed orally that respondent could keep all commissions earned by the office as a result of respondent's efforts; and that respondent would pass on to Mr. Downs any leads she came across for sales of nonresidential properties, without expecting a share of any resulting commissions. During their association, respondent did pass on three such leads, none of which panned out. Respondent's affiliation with Mr. Downs began officially on December 1, 1976. Even before then, respondent had shown Mr. and Mrs. Thomas L. Oyler a house on Lake Catherine Drive in Maitland. On December 9, 1976, the Oylers made an offer, accompanied by a deposit check in the amount of $500.00 drawn in favor of Dean Downs' escrow account. In talking to Mr. Downs about this, respondent learned that there was no escrow account. Mr. Downs told her to look up a Mr. Green at the Southeast National Bank, who would help her open up an escrow account on which she would be authorized to sign. Respondent did open such an account and in it she deposited the Oylers' earnest money. On July 14, 1977, the transaction closed and respondent ended up with a check for the selling broker's commission drawn to Dean Downs' order in the amount of $2,208.00. Petitioner's exhibit No. 4. Respondent endorsed Dean Downs' name, then her own, deposited part of the proceeds of the check in her personal account, and took the difference in cash. Soon after starting with Mr. Downs, respondent caused business cards to be printed which read "DEAN DOWNS, BROKER/ MARGARET W. ROGERS, ASSOCIATE" and bore an address and telephone number. The Oylers understood that respondent was employed by Mr. Downs, at the time they made their offer. George D. Willmer's real estate firm obtained an exclusive listing for a house at 3232 South Fern Creek Avenue in Orlando. Respondent came into his office on January 12, 1977, saying she knew people who were interested in buying this house. Respondent told Mr. Willmer that she worked for Mr. Downs but that she "pretty well had a free hand . . . (T. 19) After Mr. Willmer typed in blanks on a form contract, respondent took it to Mr. and Mrs. James M. Kelley who signed it the same day. Mr. Kelley understood that respondent worked for Dean Downs. The transaction closed on February 25, 1977, and respondent received a check drawn in favor of Dean Downs Realty in the amount of $1,099.25. Petitioner's exhibit No. 9. Shortly afterwards, Mr. Downs dropped by respondent's house on an unrelated matter and, at respondent's request, endorsed the commission check. Subsequently, respondent also endorsed it, and deposited it in her personal account. In June of 1977, respondent herself expressed an interest in buying a piece of property on Pennsylvania Avenue in Winter Park. P. H. Davis, the real estate broker with whom the property was listed, first thought that respondent "was just a buyer" (T. 57), but later agreed to split his commission with Dean Downs Realty. The transaction closed on July 14, 1977, at which time respondent received a commission check drawn in favor of Dean Down Realty in the amount of $788.00. Petitioner's exhibit No. 11. Respondent endorsed this check "Dean Downs Realty," made another endorsement, then deposited the check in an account she controlled. In December of 1976 or January of 1977, respondent discussed renewal fees for her salesperson's certificate with Sylvia Garcia, at the time an employee of petitioner. As a result of this conversation, respondent got the mistaken impression that she need not renew her certificate for some two years after the conversation. Although petitioner sent respondent a certificate, in care of Dean Downs, indicating the need to renew, Mr. Downs never gave the notice to respondent. Respondent did not renew her certificate, which expired by its own terms on March 31, 1977.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's certificate for ten (10) days. DONE and ENTERED this 19th day of March, 1979, in Tallahassee, Florida. ROBERT T. BENTON,II Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Kenneth M. Meer, Esquire 400 West Robinson Street Orlando, Florida 32801 H. Jay Stevens, Esquire 47 East Robinson Street, Suite 224 Orlando, Florida 32801
