The Issue Whether Fred Catchpole and Gwendolyn Barker (Respondents) should be subject to disciplinary action as licensed residential real estate appraisers by the Department of Business and Professional Regulation, Division of Real Estate (Petitioner) for failure to exercise reasonable diligence in developing an appraisal report in violation of Section 475.623(15), Florida Statutes (2004).1/
Findings Of Fact Petitioner is the licensing authority for real estate appraisers in Florida with revocation and disciplinary authority over its licensees pursuant to Section 20.165 and Chapter 475, Florida Statutes. On or about September 16, 2004, Respondents Fred Catchpole and Gwendolyn Barker prepared, signed and communicated an appraisal report (Report) for the property, including a manufactured home, located at 209 Ponderosa Pine Court, Georgetown, Florida 32139 (Subject Property). At the time of the Report, Respondent Catchpole was licensed by Petitioner as a State Licensed Real Estate Appraiser, and Respondent Barker was licensed by Petitioner as a State Certified Residential Real Estate Appraiser. Both Respondents are currently licensed by Petitioner as State Certified Residential Real Estate Appraisers. The Report was prepared for Pass and Associates in connection with refinance of a loan secured by the Subject Property. Respondents issued a corrected version of the Report (Corrected Report) with changes and additions requested by the client in 2004, prior to refinancing the loan on the Subject Property. In October 2004, a One-Unit Residential Appraisal Field Review (Field Review) of the Report was conducted on behalf of Chase Manhattan Mortgage Corp., who was listed in the Field Review as the “Lender/Client.” Between 2004 and 2009, Respondents provided rebuttal and rebuttal materials to address the Field Review. In 2009, Chase Home Lending (Chase Manhattan Mortgage Corp. and Chase Home Lending are both referred to herein as “Chase”) filed a complaint with Petitioner regarding the Report. The complaint consisted of a cover letter from Larry Handley with Chase Home Lending, a copy of the Report, and a copy of the Field Review. The complaint was found legally sufficient and forwarded to Petitioner’s investigator. Petitioner’s investigator did not receive a copy of the Corrected Report. T. 15, 204. Following the investigation, the Administrative Complaints were filed against Respondents. Count I of the Administrative Complaints relies on a number of alleged problems with the Report or the supporting workfiles (Workfiles), as detailed in the “Essential Allegations of Material Fact” section of the Administrative Complaints. After dismissing Counts 2 through 12 of the Administrative Complaints at the beginning of the hearing, Petitioner did not provide an Amended Administrative Complaint for either Respondent. Count I of the Administrative Complaints is based solely upon Respondents’ alleged failure “to exercise reasonable diligence in developing an appraisal report in violation of Section 475.624(15).” Instead of providing Amended Administrative Complaints, during the final hearing and in its proposed recommended order, Petitioner addressed the following alleged problems with the Report or Workfiles: The address of comparative sale 2, listed in the Sales Comparison Analysis section of the Report, was incorrect. The Subject Property has a zoning classification of R-2, which is mixed residential, which was incorrectly stated in the Report. The Workfiles for comparable sales 1, 2, 3, 4, 5 and 6 listed in the Sales Comparison Analysis section of the Report are not supported by documentation contemporaneous to the effective date of the Report. Multiple Listing Services (MLS) is listed as a data source in the Sales Comparison Analysis section of the Report for comparable sales 3, 5 and 6, but the Workfiles lack MLS documentation for those comparative sales. The Sales Comparison Analysis section of the Report failed to identify features for comparable sale 2 that were noted in the Workfiles. The Workfiles lack data to support the gross living area for comparable sale 6 noted in the Sales Comparison Analysis of the Report. The Report failed to note fences on the comparable sales, failed to make adjustments for the fences in the Sales Comparison Analysis section of the Report, and failed to address whether the fences had an influence on the price. The Report contains inconsistent Cost Approach data. The Workfiles lack documentation supporting the Estimated Site Value, Lump Sum, and As-Is Value data for the Subject Property in the Cost Approach sections of the Report. The Workfiles lack documentation supporting the Site Value for the Subject Property listed in the Cost Approach sections of the Report. The Workfiles lack documentation supporting the market trends outlined in the Sales Comparison Analysis section of the Report. The Report lacks internal consistency. At the final hearing, Respondents addressed each of the above-listed allegations. Alleged Incorrect Address in Comparable Sale 2 The incorrect address was a minor typographical error. The address listed for comparable sale 2 was only one number off the actual street address. The Report listed the street address as 815 CR 309B instead of the correct street address of 815 CR 308B. [underlines added]. The Corrected Report corrected the typographical error in the street address. Alleged Wrong Zoning Classification for the Subject Property The Subject Property is zoned “R-2, mixed residential” in the public records of Putnam County. Page one of the Report, consisting of the first page of the Uniform Residential Appraisal Report, Freddie Mac Form 70, revised 6-93, the Report lists as the specific zoning classification and description, “single family residential R-2.” At the final hearing, Respondent’s investigator, who pointed out the alleged error in the Report, admitted that he had not had training in filling out the Freddie Mac Form 70. The description used in the Report is consistent with the public tax record information on the web, which describes the Subject Property as “residential” with a zoning of “R-2.” Exhibit R-18. In addition, the One-Unit Residential Appraisal Field Review Report of the Report, which was prepared to determine the correctness of the procedures used by the original appraisal, specifically stated, “The zoning is correct.” Exhibit R-37. Alleged Lack of Contemporaneous Documentation Supporting Comparative Sales Petitioner’s witness, Francois K. Gregoire, a real estate appraiser who reviewed the Report, provided testimony to support a number of the factual allegations in the Administrative Complaints. Based upon his credentials, Mr. Gregoire was allowed to offer opinions on the Report as an expert in residential real estate appraisals. An appraiser’s workfile must be contemporaneous with the development and communication of the appraisal report. In addressing this allegation, Mr. Gregoire referenced comparable sales data in the Workfiles taken from Win2Data and Putnam County tax rolls in 2008, approximately four years after the effective date of the Report, which was issued in September 2004. Although Petitioner’s expert opined that since the data was retrieved in 2008, it could not be contemporaneous, the 2008 data included comparable sales contemporaneous with the Report. The fall 2004 issue of the Florida Real Estate Appraisal Board News & Report included a question and answer from the Appraisal Standards Board (ASB) relating to the Uniform Standards of Professional Appraisal Practice (USPAP). The question and pertinent parts of the answer stated: Question: Recently I have considered maintaining only electronic workfiles (i.e. saving only electronic versions of my reports and supporting data, and scanning any paper documents used so that copies may be stored on electronic media). Is this prohibited by USPAP? Response: No. There is nothing in USPAP that would prohibit an appraiser from maintaining only electronic versions of workfiles. The Record Keeping section of the ETHICS RULE states, in part: The workfile must include: the name of the client and the identity, by name or type, of any other intended users; true copies of any written reports, documented on any type of media; summaries of any oral reports or testimony, or a transcript of testimony, including the appraiser’s signed and dated certification; and all other data, information, and documentation necessary to support the appraiser’s opinions and conclusions and to show compliance with this Rule and all other applicable Standards, or references to the location(s) of such other documentation. As long as an electronic workfile contained these items, it would be sufficient. An appraiser must also be mindful of the requirement to have access to the workfile for the applicable required time period. The appraiser must ensure that the proper software is maintained to allow access to the electronic files. (Italics in original.) October 2008, the ASB issued a sequel its 2004 opinion, in the following response to the following question: Question: In the course of preparing my appraisals, I often research Multiple listing Service (MLS) and other data sources. I use this information to develop conclusions regarding neighborhood value ranges and market trends. Is it necessary for me to include copies of this information in my workfile? Alternatively, can I simply reference the data sources in my workfile. Response: References in the workfile to the location of documentation used to support an appraiser’s analysis, opinions, and conclusions can be adequate. It is not always necessary for the appraisal workfile to include all the documentation provided the referenced material is retrievable by the appraiser throughout the workfile retention period. Care should be exercised in the selection of the format and location of documentation. The Workfiles reflect that Respondents used MLS, Win2Data, and MLS public records to support the Report. While contemporaneous paper copies may not have been maintained of all the data, they were retrievable as reflected in the workfiles. Alleged failure to include MLS Listings in the Workfiles When Listed as a Source for Comparative Sales 3, 5 and 6 As noted in Finding of Fact 21, supra, while MLS and other supporting data contemporary with comparative sales 3 and 5 listed in the Report may not have been kept in the Workfiles, they were retrievable. See, e.g., Exhibit R-20, pp. 74-75 (listing 2009 tax data showing comparative sale 5 on 6/8/2004 for $92,000 and MLS data retrieved on 2/28/10 showing subsequent sale of the property on 7/20/05 for $110,000). Moreover, contrary to the allegation, the Report does not list MLS as a data source for comparative sale 6. Rather, the Sales Comparison Analysis section of the Report lists “WINDAT/PUB REC/DRIVEBY” as the data and/or verification source for comparative sale 6. See Exhibit P-2, p. 3. Alleged Failure of Report to Identify Features for Comparable Sale 2 Noted in the Workfiles Paragraphs 6(R) and 6(S) of the Administrative Complaints allege that the Report failed “to note that comparable sale 2 had a hot tub,” and failed “to note the renovated status of comparable sale 2, as outlined in workfile documentation.” According to Mr. Gregoire, “in Comparable Sale Number 2, the MLS printout indicates some features that were not described in the appraisal report. There’s inconsistency between the work file data and what was reported in the appraisal.” T. 93-94. While the MLS listing in the Workfiles provided additional information, there is no indication that the information was “inconsistent” with the Report. At the final hearing, Respondent Catchpole explained their rating in the Report of comparative sale 2 as “good,” accurately reflected recent renovations in that sale when compared to the “good” rating given to the Subject Property, which, at the time of the Report, had new floors, new carpets, and a new AC system. T. 202. Alleged Lack of Data in the Workfiles to Support Gross Living Area Listed in Report for Comparable Sale 6 The gross living area reported in the Report for comparable sale 6 is 840 square feet. At the final hearing, Petitioner’s expert, Mr. Gregoire, testified that there is no contemporaneous data to support that figure, and noted that the contemporaneous Win2Data in the Workfiles lists the square footage for comparable sale 6 as 2,380 square feet. In making his observation, however, Mr. Gregoire conceded that Win2Data sometimes rolls non-living areas into the reported living area. T. 99. The 2008 tax data in Respondents’ Workfiles for comparative sale 6 shows that the “base” square footage for the mobile home on comparative sale 6 was 840 square feet, which is the same square footage reported in the Report. Exhibit P-3, p. 60 While the tax data print-out is not contemporaneous with the sale, the tax data on that print-out reflects the 2003 sale for $89,000 listed in the Report, and provides a basis for the reported 840 square feet for comparable sale 6. As noted above, electronic data that has retrievable information contemporaneous with the Report is acceptable. Alleged Failure of the Report to Note or Make Adjustments for Fences on the Comparable Sales Respondent Catchpole explained at the final hearing that, in addition to reviewing public sources and MLS listings, Respondents based their Report on actual drive-bys of the comparative sales. According to Mr. Catchpole, as memory served him from six years before when the Report was written, only one fence was visible from the road. Mr. Catchpole further explained that they did not add any value to the comparative sales for the fences which they saw because they considered them to be personal property and were not a 100 percent sure that the fences they observed belonged on the comparative sale property, as opposed to adjacent land. According to Mr. Gregoire, whether or not comparative sales had fences should have been reported in the Report, “because to some buyers, that may have had an influence on the price.” T. 101. Mr. Gregoire conceded, however, that “I can’t say whether or not there should have been an adjustment, because I haven’t done an appraisal in this area.” Id. Alleged Inconsistent Cost Approach data in the Report Petitioner’s expert witness, Mr. Gregoire, noted during his direct examination that there were inconsistent values between the Estimated Site Value of $15,000 set forth on page 2 of the Report and the Market Value of Subject Site reported as $10,000 on page 5 of the Report. He also noted that the value for “Lump Sum” of $8,000 set forth on page 2 of the Report was different from the $5,000 value for “Lump Sum” reported on page 5 of the Report. Finally, he noted that the “As is” value of $15,000 for site improvements set forth on page 2 of the Report was different from the $10,000 value reported on page 5 of the Report for “other depreciated site improvements.” Exhibit P-2, pp. 2, 5. According to Mr. Gregoire, these internal inconsistencies made the Report misleading and demonstrated a lack of due diligence in its preparation. T. 107-110. Mr. Gregoire’s observations, however, did not take into account the fact that Respondents issued a Corrected Report with changes and additions requested by the client in 2004, prior to refinancing the loan on the Subject Property. T. 15; Exhibit R-1. The Corrected Report corrected the inconsistencies pointed out by Mr. Gregoire. Exhibit R-1, pp. 2, 9 (the Corrected Report lists both “Estimated Site Value” and “Market Value of Subject Site” as $15K; reports the “Lump Sum” value consistently as $8K; and consistently reports both “As is Value of Site improvements” and “Market Value of Subject Site” as $15K). Alleged lack of documentation in Workfiles supporting the Estimated Site Value, Lump Sum, and As-Is Value data for the Subject Property in the Cost Approach sections of the Report. The record citations provided in the Proposed Recommended Order submitted by Petitioner do not clearly indicate the alleged problem with the estimated site value, other than the inconsistency, which was corrected in the Corrected Report. Petitioner’s PRO, ¶ 22. Nevertheless, there were six comparable sales listed in the Report, and Corrected Report, with supporting data in the Workfiles from which estimated site cost data could be derived. As further noted by Respondent Catchpole, site data was addressed in an addendum to the Workfiles noting: Where difference in the size of the site did not afford additional utility, there was no adjustment taken, it was considered excess land. (P-3, p. 4) Mr. Gregoire also stated that there was no identification as to what “lump sum” is, either in the Report or the Workfiles. T. 109. At the final hearing, in his cross- examination of Mr. Gregoire, Respondent Catchpole indicated that the lump sum figure included porches and the air-conditioning system. In response, Mr. Gregoire stated that, if that was the case, it should have been disclosed. T. 139. There is no evidence, however, in the Field Review, that the “lump sum” category was criticized. In fact, the Field Review reported that “the data in the improvements section [is] complete and accurate.” Exhibit R-37, p. 1, § II, ¶ 4. Further, there is no evidence that the lender asked for further explanation prior to refinancing the loan on the Subject Property. As far as the alleged failure of supporting documentation for the “as is” value of site improvements on page 2 of the Report, although noting that it was not specifically identified in the report, Mr. Gregoire conceded that the value “easily corresponds with the way it’s described on Page 5 of [the Report] as Other Depreciated Site Improvements. But there is no explanation as to why in one - - it goes from $15,000 [on page 2] to $10,000 [on page 5 of the Report].” T. 110. As noted above, however, the Corrected Report, which Mr. Gregoire did not review, corrected the inconsistency between the two “as is” values set forth in the Report. Alleged Lack of Support for the Site Value for the Subject Property listed in the Cost Approach sections of the Report As noted in Finding of Fact 30, supra, the Workfiles contain comparable sales supporting the site value for the Subject Property, with an explanation in an addendum in the Workfiles. In addition, the Field Review of the Report prepared in 2004 marked “Yes” to the inquiry, “Did the appraisal report contain the appropriate prior sale(s) and/or prior listings(s) of the subject property and comparable sales?” Exhibit R-37, p. 1. Aside from the comparative sales, there was also data in the Workfiles showing other land sales in the area. Exhibit P-3, pp. 64-65. Alleged lack of documentation supporting the Market Trends outlined in the Sales Comparison Analysis section of the Report. The Neighborhood section of the Report indicates that the subject property is in a suburban area with 25 to 75 percent build-up and stable growth, and with stable property values, demand and supply in balance, and a marketing time of three to six months. Exhibit P-3, p. 1 (top third); T. 110. The Report finds that the following factors affect the marketability of the properties in the neighborhood: MSA 3600 the area located in south Putnam County, is convenient to major transportation routes which offer easy access to employment opportunities, schools, and most residential services. The homes in the area exhibit average to good quality and appeal and are typically frame, manufactured or masonry construction and are generally well maintained. P-3, p. 1. The Report states as market conditions in the subject neighborhood: The market is currently stable with mortgage funds available to qualified buyers at competitive rates. There is no evidence of concessions, buydowns, or discounts which would affect market value. Property values are relatively stable with no changes expected in the market in the near term. Recent fluctuations in mortgage lending rates do not appear to have affected market values in the subject market. Exhibit P-3, p. 1. According to Mr. Gregoire, referring to the Workfiles, he “couldn’t develop any trend here based on the way it’s maintained, whether it’s stable or not.” In addition, Mr. Gregoire opined that the Workfiles contain poor support for the reported single-family price range. T. 111. Mr. Gregoire acknowledged, however, that the Workfiles include, “in addition to the comparable sales that we discussed, some what I call on-line printouts.” Mr. Gregoire also acknowledged that the Workfiles contained several sales in the above $200,000 price which are indicated as being the high price. According to Mr. Gregoire, however, “it doesn’t necessarily show a predominant value there.” T. 110-111. The on-line printouts referenced by Mr. Gregoire appear on pages 26 through 30 of the Workfiles for improved property, and pages 64 and 65 of the Workfiles for land sales. Exhibit P-1, pp. 26-30, 64-65. The on-line printouts were derived from Win2Data, which Mr. Gregoire admitted was a recognized service for extracting market data. While Mr. Gregoire suggested that the “RealQuest” data source he utilizes was superior because it has updated on-line data, on- line Win2Data is also available and was utilized by Respondents. T. 150. The evidence did not show that the market data utilized by Respondents was deficient. Respondent Catchpole is also expert in real estate appraisal. He has a master’s degree in business administration, has testified as an expert before Congress, the United States District Courts in Georgia and Florida, and before the United States Bankruptcy Court in the Middle District of Florida. He has testified in numerous circuit courts in Florida. He has been a member of the Appraisal Institute. He has appraised nuclear power plants, been an advisor for real estate investment trusts, and has been an appraiser for Whirlpool, Citi Corp and Shearson Lehman. In the exchange during Mr. Gregoire’s cross- examination by Respondent Catchpole, it was clear that they had a difference of opinion as to how to best support an appraisal. See T. 115-167; see also T. 196-198. The evidence was insufficient to show that Mr. Gregoire’s approach was superior to the method utilized by Respondents in conducting the appraisal reflected in the Report or that Respondents did not use reasonable diligence in its preparation. Alleged Failure of Respondents to Maintain Internal Consistency in the Report In support of this allegation, Petitioner cites to Mr. Gregoire’s testimony at the final hearing that “it is the appraiser’s responsibility to ensure internal consistency and to ensure that the report reflects their opinions and conclusion before they affix their name to the report or certification. Petitioner’s PRO, p. 12; T. 135. Aside from the fact that Mr. Gregoire’s opinion did not reflect the Corrected Report, it is apparent his opinion did not consider other information provided by Respondents in support of the Report. While the Field Review was critical of a number of aspects of the Report, Respondents provided rebuttal to that Field Review prior to the complaint by Chase initiating this action. Some of the rebuttal included information indicating that the reviewer who prepared the Field Review had used comparable sales that were not arm’s length transactions. Although Petitioner’s investigator saw the information provided by Respondent Catchpole indicating that the reviewer’s comparables were not arm’s length transactions (T. 53), Mr. Gregoire did not review that information. Mr. Gregoire admitted that he was aware that Respondents provided a written rebuttal with documentation to Chase to the Field Review conducted in 2004. At the time of his testimony in this case, however, Mr. Gregoire had not reviewed any correspondence related to the rebuttal. T. 117-118. One document in particular, Exhibit R-30, that was provided to Petitioner’s investigator from Respondents’ Workfiles, contained notes from Respondent Catchpole contemporaneous to the Report indicating that Respondent Catchpole had contacted the property appraiser’s office to resolve differences in comparable sale 2 between the MLS listing and public records. T. 65-66. Mr. Gregoire was not provided this further evidence of Respondents’ diligence prior to his testimony. T. 121-122. In addition, the Workfiles submitted as Exhibits P-3 and P-7, were offered as the same documents. T. 25. It is clear, however, that a number of documents in P-7 were not in P-3. P-3 consists of 78 pages, whereas P-7 has 94 pages. It is apparent from Mr. Gregoire’s testimony and reference to Exhibit P-3, that his opinions were based upon his review of P-3. There was also evidence that there were a number of documents provided to Petitioner’s investigator, but not placed in Exhibit P-3 for review by Mr. Gregoire for his analysis. Exhibits RA-1 through RA-12, RB-1, and RC-1 through RC-8. While ultimately not used as comparative sales, the documents are additional evidence of Respondents’ efforts and diligence in preparing the Report. In addition, the refinanced loan for which the Report was provided has never gone into default. In sum, the evidence adduced at the final hearing was far less than convincing that Respondents did not use reasonable diligence in preparing the Report.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a Final Order dismissing the Administrative Complaints. DONE AND ENTERED this 19th day of May, 2010, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III 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 19th day of May, 2010.
The Issue At issue is whether Respondent committed the violations set forth in the Administrative Complaint dated April 2, 2002, and, if so, what penalty should be imposed.
Findings Of Fact Petitioner is a state agency responsible for the licensing, regulation and discipline of real estate appraisal licensees in Florida. At all times material to this case, Respondent was a Florida state-certified residential real estate appraiser. Persons holding such licenses are required by law to assure that the state is apprised of the licensee's physical address. The purpose of the law is to assure that state regulators, as well as clients who may have issues regarding appraisals performed by the licensee, are able to contact the appraiser in a timely manner. At all times material to the charges against him, Respondent registered with Petitioner the address of 5299 West 28th Avenue, Hialeah Gardens, Florida 33016 as his current address. On or about February 2, 1996, Respondent developed and communicated an appraisal report for residential property located at 28204 Southwest 43 Court, Homestead, Florida 33033 (subject property). On or about August 12, 1999, Petitioner received a complaint concerning this appraisal. In furtherance of its legal obligation to investigate such complaints, Petitioner promptly wrote to Respondent at his registered address. The letter was not returned, and thus a legal presumption arises that it was received by the person(s) residing on the premises. That person was Respondent's mother. At the time the letter was sent and received at Becerra's registered address, Becerra himself was living in Colorado. Because Becerra had never notified Petitioner of the change of address; (there is no evidence as to whether Becerra's mother did or did not forward or otherwise deal with her son's mail) the state was thwarted in its efforts to determine the bona fides of the complaint. Eventually, Becerra came back into compliance with his obligation to provide the state with an accurate address. On January 29, 2002, state investigator Brian Piper (Piper) arranged to meet Becerra at his new location, 665 West 35th Street, Hialeah, Florida, a private residence where Becerra maintained a home office. Becerra knew that the purpose of Piper's visit was to investigate the 1999 complaint regarding his appraisal of the subject property in particular, and Becerra's appraisal business in general. Under Florida law, real estate appraisers must maintain a file with all documents pertaining to an appraisal for at least five years after the date of the issuance of the appraisal, and for at least two years after final disposition of any judicial proceeding in which testimony concerning the appraisal was given, whichever period expires last. Thus, by the time Piper met with Becerra regarding the February 2, 1996 appraisal, Becerra was no longer legally obligated to have documents relating to that appraisal in his possession. He was, however, required to cooperate with Piper's investigation. Instead, he was hostile, suspicious, and secretive in his dealings with Piper. Becerra would have been within his rights to say, unambiguously, that the file concerning this appraisal, or any 1996 appraisal for that matter, had been discarded in the ordinary course of business sometime after the five-year statutory record keeping period expired. Becerra did not make such a representation. Instead, he suggested to Piper that his documents were maintained on a computer, and/or at another location. As an afterthought, he raised the possibility that the documents no longer existed. Piper asked, as he was entitled to do, questions regarding Becerra's practices regarding the development and maintenance of records concerning appraisals. Becerra refused to answer. Frustrated in his efforts to determine whether the complaint regarding the 1996 appraisal was valid, Piper sought to exercise on behalf of the state its right to conduct a spot- audit of Becerra's books and records related to pending appraisals. Observing what appeared to be appraisal request forms taped to the wall of the Becerra's office, Piper sought access to the files concerning these appraisals. Becerra refused to cooperate and demanded that Piper leave his home/office. Becerra did not then and did not at hearing claim that Piper had requested information or made demands that he was not lawfully entitled to request or make. Instead, he contended that because more than five years had elapsed between the date of the appraisal and the time the state was able to find Becerra to ask him to produce the documents, Becerra cannot be disciplined for failing to produce the documents. The evidence established that Piper and DBPR acted at all times reasonably and in accordance with their legal duty to investigate specific complaints and to, more generally, monitor the operations of state-licensed appraisers to assure that they are performing their jobs in accordance with Florida law and the public interest. The evidence further established that Becerra's failure to fulfill his statutory duty to keep the state informed of his whereabouts was the sole reason the state had been unable to directly inform Becerra of its need to review the documents, and to conduct appropriate investigations into the quality of the February 2, 1996, appraisal; and, later, into the management of his appraisal business at the time of Piper's visit to Becerra's home office on January 29, 2002. A comparison of the February 2, 1996, appraisal for the subject property with public records which were available at the time the appraisal was rendered revealed several discrepancies. For example, the appraisal reported an incorrect folio number for the subject property, an error which Becerra admits. In addition, the appraisal contained inaccurate information regarding the then-owner of the property and the square footage of the house. It also omitted reference to a previous sale, and made no mention of the fact that the subject property was located in a gated community. Transactions cited in the appraisal as comparable sales were not, in fact, comparable. The appraisal left out the impacts of Hurricane Andrew upon the property; those impacts were, at the time of the appraisal, significant. While the evidence is sufficient to establish that the appraisal was not a model of accuracy and attention to detail, the absence of Becerra's records, coupled with the fact that several pages of the appraisal were missing from the (anonymous) complaint which precipitated the investigation, render it impossible to determine whether Becerra did, in fact, fail to fulfill the minimum standards expected in an appraisal prepared by a Florida licensee. By the time the state was able to locate Becerra and conduct its investigation, the statutory period for which documents pertaining to the appraisal had expired, and it was no longer possible to determine whether Becerra had fulfilled his legal duty to maintain the file for five years. Additionally, it was no longer possible to determine whether there were credible explanations for the discrepancies and apparent errors in the appraisal of the subject property, or whether he had in fact performed the appraisal negligently. Becerra unlawfully failed and refused to cooperate with the state's reasonable inquiry into his current appraisal cases.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a Final Order be entered finding Respondent guilty of violating Section 475.624(1), Florida Statutes, by reason of his violations of Sections 475.623 and 425.626(1)(f), Florida Statutes, imposing a fine of $5,000 and permanently revoking respondent's real estate appraisal license. DONE AND ENTERED this 10th day of July, 2003, in Tallahassee, Leon County, Florida. S FLORENCE SNYDER RIVAS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of July, 2003. COPIES FURNISHED: Sergio A. Becerra 665 West 35th Street Hialeah, Florida 33012 Juana Carstarphen Watkins, Esquire Department of Business and Professional Regulation Hurston Building, North Tower, Suite N308 400 West Robinson Street Orlando, Florida 32801 Frank Gregoire, Chairman Real Estate Appraisal Board Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issue is whether the Respondent's Florida Appraisal License should be disciplined upon the charge that the Respondent performed appraisal services in a careless or negligent manner in violation of Uniform Standards of Professional Appraisal Practice, Rule 1-l(c), Florida Administrative Code, and in violation of Subsection 475.624(14), Florida Statutes.
Findings Of Fact The Petitioner is a state licensing and regulatory agency charged with the responsibility and duty to prosecute Administrative Complaints pursuant to Florida Statutes. The Respondent, Michael B. Limanti, is now and was at all times material to the Administrative Complaint, a State Certified General Real Estate Appraiser having been issued license number RZ000708, in accordance with Chapter 475, Florida Statutes. The last license issued to the Petitioner as a State Certified General Real Estate Appraiser listed his address as 807 St. Johns Avenue, Palatka, Florida 32177. On or about March 26, 1996, the Respondent conducted an appraisal of residential property owned by John and Carol Sherer for a fee of Three Hundred Dollars ($300.00), paid by the Sherers. The Respondent's residential appraisal report, which was received as Exhibit 1, indicated that the real property being appraised was located at 115 Shoreside Trail, in Crescent City, and estimated the market value of the real property at Fifty-Three Thousand Five Hundred Dollars ($53,500.00). The appraisal report contained the following factual assertions which were the subject of the controversy concerning the descriptions of the subject property: A private road adjoining the property was marked as being public on the appraisal form. There were no notes in the comments about the road. The road was a private road with a public easement. There was no clear evidence of the road's status. The appraisal form specifically referenced paragraph six of the form, which is a general disclaimer provision. The age of the house was stated as an effective age of twenty (20) years. The house was built in 1979. The appraisal was in 1996. The effective age of the house takes into consideration maintenance and other conditions. Another appraiser appraised the house subsequent to the Respondent's appraisal. The opinion of the Department's expert at hearing is that the age of the house was not inordinately different from the Respondent's opinion, and was not a major factor. The Petitioner's appraisal report contained several mix-statements regarding the characteristics of the house. The full bathroom was mix-characterized as .75 of a bathroom. The floors of the house were erroneously indicated as being carpeted, when in fact they were vinyl tile at the time of the appraisal. The walls were characterized as sheet rock, when in fact they were wooden paneling. The appraisal also referenced a scuttle hole, which does not exist. The Department's investigator interviewed the Respondent who stated that he had made a mistake in entering data from his notes regarding the property. However, the Respondent felt that the errors were inconsequential and did not affect the value of the property. The Department's expert opined that the aforementioned errors indicated carelessness; however, the Department's expert agreed that they did not impact the ultimate value of the property. The photographs, purportedly of the subject property, were identified by the owner and the Department's expert as not being of the lakefront on the subject property. The Department's expert opined that the difference in square footage of the Respondent's appraisal and the second appraisal was negligible and within limits. The principal objection of the Department's expert was to the location of the properties selected as comparables. One of the properties was on a smaller lake, another on a larger lake, and the third on a canal adjoining the St. Johns River. However, in each instance the price of the other properties has been adjusted by Respondent with regard to the site location. Upon cross-examination, the Department's expert indicated that there were few sales of property due to a depressed market at the time the appraisal was conducted and there were a limited number of "comparables" from which to select. The Department's expert was most concerned about the Respondent's choice of comparable sales which the expert felt were inappropriate.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Petitioner enter its Final Order finding Respondent in violation of Section 475.624(14), Florida Statutes, and fine him $1,000 and place him on probation for one(1) year. DONE AND ENTERED this 13th day of November, 1997, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1997.
The Issue Should the Florida Real Estate Appraisal Board (the Board) take action against Respondent, a licensed real estate appraiser (appraiser), for violations set forth in Chapter 475, Part II, Florida Statutes (1995)?
Findings Of Fact Stipulated Facts: Respondent is a state-licensed appraiser. On or about January 9, 1997, Respondent, Fred Catchpole, and Rhonda Guy developed and communicated an appraisal report for property commonly known as 693 Broad Street, Pensacola, Florida 32819. In developing the subject property appraisal report, the Cost Approach and the Sales Comparison Approach were utilized. Additional Facts: Eventually the circumstances concerning the Uniform Residential Appraisal Report (the Report) at the 693 Broad Street, Pensacola, Florida, property (the Property) came to Petitioner's attention upon a complaint. On February 13, 2001, the complaint was made. The complaint was made by Daniel Alvin Ryland, a Florida-licensed appraiser who has provided appraisal services in Escambia and Santa Rosa counties in Florida. The investigation of the complaint covered the period February 20, 2001, through December 26, 2001. Benjamin F. Clanton was the principal investigator. At present, he is an investigator supervisor for Petitioner. He has held that position since 2002. Mr. Clanton started investigating appraisal cases in 1995, when he retired from the Birmingham Police Department in Birmingham, Alabama. In that year, he was employed by the Alabama Real Estate Appraisal Board. While there, he took three courses: the Appraisal of Real Estate, a 45-hour course; the Basic How to Appraise, a 25-hour course; and Uniform Standards of Professional Appraisal Practices (USPAP), a 16-hour course. He took an update in USPAP in 1997, a four-hour course. Mr. Clanton continued with Appraisal Institute courses or courses involving appraisal principles and procedures, basic income capitalization, residential case studies and a national USPAP course and other updates. As part of the investigation, Mr. Clanton interviewed Respondent Harrison. Mr. Clanton sought documentation from the Respondent in the interest of the recreation of the Cost Approach in the Report. Mr. Clanton asked for the work files supporting the Report. Respondent provided work files. Discrete information concerning recreation of the Cost Approach was not received by Mr. Clanton. From his observations related to the Cost Approach within the Report, Mr. Clanton describes problems with the calculations of the Cost Approach where the stated effective age in the comments on the Cost Approach was 25 years. That calculated to be significantly different, in his understanding, than the number used in the depreciation in the Cost Approach. The Report reflected a remaining economic life of 35 years and a total life expectancy of 60 years. He refers to the Report's statement of the effective age of the Property as 15 years. In his testimony, Mr. Clanton describes the age life depreciation method leading to establishment of the effective age but he was never qualified as an expert to allow consideration of the testimony on the age life depreciation method or other issues related to the Cost Approach. Therefore, no further facts are found on that topic. When interviewed by Mr. Clanton, Respondent Catchpole in DOAH Case No. 06-3389PL acknowledged that there were errors in the Cost Approach formulations attributed to Respondent Harrison. The nature of any errors was not explained. Without that explanation they become inconsequential. More particularly, the Property neighborhood is slightly north of Interstate 10 in Pensacola, Florida, west of Pine Forrest Road, to the west side of Highway 29, and south of Alternate 90. The Property is located in what is referred to as the Ensley area. The Property is one of the largest residences in the Ensley area, in particular in Ensley Gardens. Immediately off of Highway 29 are rows of commercial buildings. Behind those rows is a railroad track. The Property is about 200 feet from the railroad track. An Escambia County utilities substation, pumping station, is located north of the Property. The Escambia County public utilities facility is about 200 feet from the Property. The Property is located north of Broad Street. The Property is on a large lot. Homes across from the Property on Broad Street are located on smaller lots. The property is not in a Planned Unit Development (PUD). The area of the subject property is not homogenous, in that the homes vary widely in quality, design, age and size. By choice of the appraiser, the Sales Comparison Approach was used in determining the appraisal for the Property. There were three comparable sales. At the time the Report was written the Property was 27 years old. Comparable sale one was two years old. Comparable sale two was 12 years old. Comparable sale three was 9 years old. The Property site was 120 feet by 260 feet according to the Report. This was larger than the comparable sales sites. Respondent, in providing information from the work file related to the Report, included information from a Multiple Listing Service (MLS) for January 1997 from the Pensacola Association of Realtors. In reference to comparable sale one, the MLS refers to the location as Creekside Oaks Subdivision, a luxury home under construction and a Parade Home entry. It refers to a sprinkler system, pantry, cathedral ceilings, security alarm, two+ closets in the master bedroom, separate shower in the master bedroom, an open patio, laundry/utility room, on a golf course, with a two-car garage. It has a whirlpool for the master bedroom bath. It has double pane glass. In relation to comparable sale two, the MLS refers to soaring cathedral ceilings with a fireplace in living room and screen porch, a hot tub and gorgeous yard with pool. The pool is described as an in-ground pool. There is a reference to a unique atrium, an inside laundry, walk-in closets, sprinkler systems, laundry/utility room and security alarm. The MLS pertaining to comparable sale three refers to the Kings Road Subdivision in Cantonment, whereas the Report refers to the location as Pensacola. In relation to comparable sale three on Kings Road in Cantonment, that neighborhood has deed restrictions limiting the type of homes and the size of homes. It has a public sewer. It has underground utilities. It has a concrete curb and gutter. The house is described as having a fireplace, sprinkler system, screen porch, high ceilings, security alarm, two-car garage, with a garden tub in the master bath. It refers to a laundry inside. There is a pool. The Report in the section under the Comparable Sales Approach, under the sales comparison analysis that refers to design and appeal described the Property and the comparables as ranch/average. The Property and the comparable sales properties were all described as suburban-average as to location. The sites were described as average for the Property and inferior for the comparables with a $3000 positive adjustment in each comparable sale to compensate for the difference. The Property did not have a pool. Two of the comparable sales had pools. Mr. Clanton asked the Respondent to provide him with a second appraisal report on the Property. Respondent agreed to provide it and mailed it to Mr. Clanton. A second appraisal report was not received by Mr. Clanton. Nothing more is known about a second appraisal report. In the appraiser certification signed by Respondent as appraiser and signed by Respondent Catchpole, DOAH Case No. 06- 3389PL, as supervisory appraiser, under item 8 it was stated: "I have personally inspected the interior and exterior areas of the subject property . . . ." Within item 8 to the appraisers certification, it went on to say that there was a personal inspection of " . . . the exterior of all properties listed as comparables in the appraisal report " Respondent in this case did not inspect the interior of the Property as part of the appraisal, by contrast to an awareness of the exterior. Respondent Catchpole, DOAH Case No. 06-3389PL, served as the supervisory appraiser and as such did not inspect the Property in any respect. Respondent Fred R. Catchpole, DOAH Case No. 06-3389PL, reviewed comparable property data in relation to the sales comparison analysis but was not involved in the selection process in choosing comparable sales. The form used in preparing the Report is referred to variously as Freddie Mac Form 70 6/93 and Fannie Mae Form 1004 6/93. In the Report in the section involving subject matter, Fred and Juanita Hicks were listed as borrowers and the current owner of the Property. The property rights being appraised were under the heading "fee simple." There was a reference to a lender/client as Home Star Mortgage Lending. The results of the Report did not lead to any direct harm to a consumer, in particular, the listed borrowers, Fred and Juanita Hicks.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 30th day of May, 2007, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings This 30th day of May, 2007.
The Issue The issue presented is whether Petitioner achieved a passing grade on the May 20, 1991, certified residential appraiser examination.
Findings Of Fact Petitioner took the May 20, 1991, certified residential appraiser examination. He was subsequently advised that he had correctly answered 74 out of the 100 questions and had therefore achieved a score of 74. A score of 75 is the passing score on that examination. In the development of the state certified residential appraiser examination, a job analysis was performed by Educational Testing Service of Princeton, New Jersey, a national psychometric company. From that job analysis, a list of tasks routinely performed by appraisers was developed. From that list of tasks, the uniform examination content outline was developed specifying the areas to be covered by the examination. From that uniform content outline, Educational Testing Service then developed a bank of questions to be utilized in the examinations for licensure or certification. Each item in the bank was validated by Educational Testing Service. Once Respondent received that bank of validated test items, it sent all of the items to the Appraiser Qualifications Board of the Appraisal Foundation, an entity involved in establishing uniform standards on a national level for real estate appraisers. Respondent's examination bank was also validated by the Appraiser Qualifications Board. In addition, Respondent has its own validation committee which meets prior to the administration of an examination to review the items on that examination to again verify that the test items are valid, are not ambiguous, and are correct and proper for a residential appraiser certification examination. The five questions challenged by Petitioner are part of the bank that was approved by the Appraiser Qualifications Board. Those five questions have been used on past examinations and have previously been determined to be valid. The five questions challenged by Petitioner ranged from moderately difficult to extremely easy. Subsequent to the filing of Petitioner's examination challenge, Respondent reviewed the questions challenged and performed a statistical item analysis. All of the questions had a positive point biserial correlation. The number of candidates correctly answering each of those questions was approximately the same as the number of candidates correctly answering those questions on previous examinations. For example, 94% of the candidates correctly answered question numbered 4. On previous examinations, 93% to 95% of the candidates had correctly answered that same item. Sixty-seven per cent of the candidates taking the May 20, 1991, certified residential appraiser examination achieved a passing grade. Their examination was a typical examination in that the usual percentage of candidates achieved a passing score. Question numbered 4 required the examinee to identify the item which was not a fixture. The correct answer was "D," which answer specified that the personalty was "unattached." Petitioner chose answer "C," which answer specified that the personalty was attached to the structure. Petitioner's answer was not correct. Question numbered 73 required the examinee to name the cost method defined in the question. The correct answer was "B." Petitioner chose answer "A," which was not a correct answer. Question numbered 32 tested the examinee's understanding of valuing property containing superadequacies and was written in the negative. The correct answer was "C." Petitioner's choice of "D" was not correct since that was one of the approaches that can be used. Question numbered 76 tested the examinee's understanding of the difference between reproduction costs and replacement costs. The correct answer was "B." Petitioner chose answer "D." Petitioner's answer was wrong. Although the testimony at the final hearing indicated that answer "A" may also have been a correct answer to this question, Petitioner did not choose answer "A." Question numbered 93 tested the examinee's knowledge of proper appraisal practices. Answer "A" was the correct answer. Petitioner chose answer "C," which was not correct. Although Petitioner questioned the propriety of this question as part of the residential appraiser examination, the expert testimony indicates that the question was appropriate. Further, the question has been validated as being appropriate by the Appraiser Qualifications Board applying national standards. The parties have stipulated that Petitioner meets all of the requirements for licensure as a certified residential appraiser except for achieving a passing grade on the certification examination.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered dismissing the Petitioner's examination question challenges and finding that Petitioner failed to achieve a passing grade on the May 20, 1991, certified residential appraiser examination. DONE and ENTERED this 16th day of March, 1992, at Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SC 278-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of March, 1992. Copies furnished: Mr. Stephen Metro 1841 Northwest 22nd Street Pompano Beach, Florida 33069 Fred H. Wilsen, Chief Staff Attorney DPR - Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
