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, Victor Harrison, Respondent 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 Victor Harrison, DOAH Case No. 06-3387PL. Mr. Clanton sought documentation from that Respondent in the interest of the recreation of the Cost Approach in the Report. Mr. Clanton asked for the work files supporting the Report. That 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 acknowledged that there were errors in the Cost Approach formulations attributed to Respondent, Victor Harrison, DOAH Case No. 06- 3387PL. 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 Victor Harrison, DOAH Case No. 06-3387PL, 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, Victor Harrison, DOAH Case No. 06-3387PL, 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 Victor Harrison, DOAH Case No. 06-3387PL, as appraiser, and signed by Respondent, 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, Victor Harrison, DOAH Case No. 06-3387PL, did not inspect the interior of the Property as part of the appraisal, by contrast to an awareness of the exterior. Respondent served as the supervisory appraiser and as such did not inspect the Property in any respect. Respondent 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 owners 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.
Findings Of Fact Respondent, Robert T. Sharkey (Sharkey), was at all times material hereto a licensed real estate broker in the State of Florida, having been issued license number 0079702. Sharkey was the qualifying broker of Respondent, Appraisal Associates & Consultants, Inc. (Appraisal Associates), a corporation licensed as a real estate broker in the State of Florida, having been issued license number 0238854. The Real Estate Seminar In 1985 Respondents placed numerous advertisements in the help wanted section of local newspapers seeking to employ real estate appraisers, experienced or inexperienced, and offering to train the inexperienced. Elizabeth Townsend (Townsend) and Robert Newman (Newman) responded to such advertisements. The experiences of Ms. Townsend and Mr. Newman, both licensed real estate salespersons, were similar. Upon responding to the advertisement they were advised that a meeting would be held at Appraisal Associates, and the program would be explained. At the meeting, Ms. Townsend and Mr. Newman were advised that Appraisal Associates was conducting a seminar in residential property appraising and that a fee, $150.00 in the case of Ms. Townsend and $200.00 in the case of Mr. Newman, would be charged. Each paid their fee and executed a "Seminar Reservation and Employment Conditions" agreement which provided: SATISFACTORY COMPLETION OF THE PRESCRIBED COURSE OF STUDY THE TRAINEE WILL HAVE THE OPTION TO PLACE THEIR CURRENT REAL ESTATE LICENSE, UPON ACCEPTANCE BY THE MANAGEMENT, WITH APPRAISAL ASSOCIATES .... FOR THE APPRAISER TRAINEE TO OBTAIN EMPLOY- MENT WITH APPRAISAL ASSOCIATES OR ANOTHER ASSIGNED BROKER IN THE FIRM THEY MUST: SATISFACTORILY COMPLETE THE PRESCRIBED SEMINAR AND/OR COMPLETE A WRITTEN EXAM ADMINISTERED BY APPRAISAL ASSOCIATES AND CONSULTANTS, INC. 2 COMPLETE SATISFACTORILY AT LEAST FIVE SINGLE FAMILY RESIDENTIAL DEMONSTRATION REPORTS. HAVE A CURRENT FLORIDA REAL ESTATE LICENSE. COMPLETE AN APPLICATION FOR MEMBERSHIP OR DESIGNATION TO ANY APPRAISAL ORGANIZATION FOR CANDIDACY OR ASSOCIATE MEMBERSHIP .... The seminars attended by Ms. Townsend and Mr. Newman were similar. Each consisted of 16 hours of class work dedicated to filling out a standardized Fanny Mae form for single family residences, a drive by appraisal of a residential home, and an on site inspection and appraisal of a residential home. While Mr. Newman felt that not enough time was devoted to actual appraising, and Ms. Townsend felt the seminar was terminated prematurely, there was no proof offered that the seminars were not adequate to instruct the participants in the basics of real estate appraisal, or that they were otherwise a sham. Mr. Newman did not take the final examination, did not complete the five single family residential demonstration reports, and never requested employment with Respondents. Ms. Townsend conceded she was familiar with the requirements for employment and that, while she received a "Certificate of Seminar Completion", she never applied for membership in any appraisal organization and never requested employment with Respondents. Sharkey's Qualifications At hearing the Department introduced into evidence a document, titled "Qualifications of R. T. Sharkey, MRA, CRA", which its investigator had secured from Respondent Sharkey. (Exhibit 6) Pertinent to this case' the document provided: AFFILIATES * * * AMERICAN RIGHT OF WAY ASSOCIATION * * * LICENSED REAL ESTATE APPRAISER EXPERIENCE * * * APPRAISER RIGHT OF WAY CONDEMNATION FLORIDA DEPARTMENT OF TRANSPORTATION 1972-1975 The foregoing qualifications attributed to Sharkey are inaccurate, misleading or false. The organization known as the American Right of Way Association has not been known by that name for 3-4 years; the State of Florida does not license real estate appraisers; and Sharkey was never employed by the Florida Department of Transportation as an appraiser for right-of-way condemnation. While the document included qualifications attributed to Sharkey that were inaccurate, misleading, or false, there was no proof that the document was ever presented to any person in the conduct of Respondents' business, or that any person placed any reliance on such document.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Counts 1, 2, 7, 8, and 9 of the Administrative Complaint be DISMISSED with prejudice. DONE AND ENTERED this 10th day of November, 1986, in Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1986. APPENDIX Respondents proposed findings of Fact Consisted of 8 unnumbered paragraphs. These paragraphs have been designated paragraphs 1-8, and addressed as follows: Addressed in paragraphs 2-3. Addressed in paragraphs 4. Addressed in paragraphs 4-5. Addressed in paragraphs 4-5. Addressed in paragraphs 4-5. Addressed in paragraphs 3-5. Addressed in paragraphs 6-8. Addressed in paragraphs 6-8. COPIES FURNISHED: James H. Gillis, Esquire Department of Professional Regulation 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 James G. Kincaid, Esquire 4331 North Federal Highway Fort Lauderdale, Florida 33308 Harold Huff, Executive Director Division of Real Estate/DPR 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
The Issue Whether Respondent violated Florida law related to real estate appraisal professionals as alleged in the administrative complaint; and if so, what penalty is appropriate.
Findings Of Fact Background Petitioner is the state agency charged with regulating the practice of real estate appraisal pursuant to section 20.165 and chapters 455 and 475, Florida Statutes. At all times material to this matter, Respondent was licensed as a state certified general real estate appraiser in the state of Florida, having been issued license number RD 6606. Respondent is also certified as an appraiser in Texas. Respondent has no prior discipline. At all times material to this matter, Respondent’s address of record was 11 Racetrack Road Northeast, Suite F4, Fort Walton Beach, Florida 32547. Respondent has a 15-year history of practicing in the area of appraising property and preparing appraisal reports. She has appraised approximately 15 properties in Santa Rosa County, and has significant knowledge of the geographical area to perform appraisals in Santa Rosa County. Respondent has taken college courses to develop her education of appraisal practice, and she has taken courses on proper supervision of an appraisal trainee. In this case, Respondent was retained by Value Links, an appraisal management company to appraise a residential real estate property located at 6839 Gordon Evans Road, Navarre, Florida 32566 in Santa Rosa County (“Subject Property”). Value Links was serving as the agent for George Mason Mortgage, LLC (“Intended User” or “Lender”). The engagement letter required that the final appraisal report include original photos of all comparable sales. Multiple Listing Services (“MLS”) photos were acceptable if original photos were not available, so long as the report includes a comment disclosing that MLS photos were used. The final appraisal report was required to be submitted to the Intended User. First Appraisal Report At the outset of receiving the appraisal assignment, Respondent assigned the appraisal to herself and had her appraiser trainee, Stephanie Lanette Hansen, assist her with the assignment. Ms. Hansen, a state registered trainee appraiser, has been issued license number RI24220. It is customary that an appraiser trainee under the supervision of a certified residential appraiser is permitted to perform all aspects of an appraisal assignment including inspecting and measuring the Subject Property with or without their supervisor present. Respondent’s appraiser trainee, Ms. Hansen, who did not testify at the hearing, has been training with Respondent since 2014. Ms. Hansen performed a physical inspection including taking pictures of the interior and exterior of the Subject Property. Respondent did not physically visit the property, but rather she visually examined the photographs Ms. Hansen took during her inspection. A material issue of dispute in this matter is whether Respondent’s review of the photographs taken by her trainee could be considered an inspection of the property. Petitioner’s expert testified that the term “visual” inspection is known within the real estate appraisal industry to mean “personal” inspection. Petitioner also pointed to the language of USPAP Standards Rule 2-3 for guidance regarding the meaning requirement of a personal inspection. USPAP Rule 2-3 provides a standard certification that the appraiser shall indicate whether he or she made a personal inspection of the property that is the subject of the report. The language of the rule does not require a personal inspection. Moreover, the certification cites to an advisory opinion regarding Inspection of Subject Property. See USPAP Advisory Opinion 2 (AO-2). The advisory opinion regarding minimum level of inspection provides as follows: “An appraiser may use any combination of property inspection, plans and specifications, asset records, photographs, property sketches, recorded media, etc., to gather information about the relevant characteristics of the subject property….” On or about September 5, 2019, with an effective date of August 23, 2019, Respondent prepared and transmitted the first appraisal report for the Subject Property, with the assistance of her trainee. Respondent assessed the market value of the property at $388,000. In the appraisal report, Respondent indicated in the additional certification comments section that: “State Registered Trainee Appraiser Florida License Number RI 24220, Stephanie Lanette Hanson has contributed significant assistance in this report. The extent of the assistance includes: inspecting, gathering, analyzing, and verifying data of the [Subject Property] and comparable properties, data entry, market adjustments, reporting and reconciliation of market value.” In the first appraisal report, Respondent did not identify the presence of any fireplace. Respondent used MLS photos for the comparable properties. However, she did not disclose in the report that the photos were not original. Respondent’s appraisal report included a standard Fannie Mae certification form. The certification form listed a provision regarding performance of a complete “visual” inspection of the interior and exterior of the Subject Property. Respondent testified that she performed a visual inspection of the property by examining the photographs, which, according to her experience, is permitted in the appraisal industry. Respondent signed the first appraisal report as the primary appraiser, instead of as the supervising appraiser. Respondent’s signature on the report was her attestation that she certified the representations in the report. Respondent also maintained a work file for her appraisal of the Subject Property. Respondent’s work file contained all documentation required to comply with USPAP rules, including the name of the Intended User, copies of all written reports, all data, and documentation necessary to support her opinion and conclusions. After transmission of the first appraisal report, the Intended User contacted Respondent and advised her that the buyer, sellers, and listing agent wanted reconsideration of the value of the property. Respondent agreed to amend her report. Second Appraisal Report Respondent revised her first appraisal report as requested and addressed the concerns in the second report, including a comparable sales assessment for a comparable property, the absence of a fireplace, and the value assessment of the property. In her second appraisal report, Respondent addressed the requested revisions. First, she noted that the comparable sale assessment as a Q3 construction rating and supported her reason for assessing the Subject Property as a Q4 rating because it was located in a superior neighborhood with amenities. Respondent also addressed the omission of the fireplace. She testified that she inadvertently missed the permanent fireplace. She further explained that the second alleged fireplace was electric and, thus, considered personal property. As a result, she did not give the electric fireplace consideration in the assessment. She provided this same support for her decision in the second appraisal report. Based on her identification of the permanent fireplace, Respondent corrected the assessment of the property to reflect a $2,000 increase in value. Respondent’s $2,000 increased adjustment for the fireplace was also supported in Respondent’s work file that she maintained for this appraisal assignment. In determining the value of the Subject Property’s fireplace, Respondent considered the cost stated in Marshall Swift Cost Handbook that she maintains in her office, the local builders in the area, consultation with her father who is a general contractor, and her peers in the area where the Subject Property is located. Respondent testified that she did not intend to mislead anyone when she transmitted the report. She inadvertently failed to include the fireplace in the first report, but corrected her mistake when she revised the report. On or about September 16, 2019, with an effective date of August 23, 2019, Respondent submitted the amended appraisal report for the Subject Property. In that report, Respondent assessed the value of the property at $390,000. As she did with the first report, she signed the second report as the primary appraiser. Petitioner’s Expert Petitioner’s expert, Joel Salley, a State Certified Residential Appraiser, reviewed Respondent’s report to determine compliance with USPAP rules. Mr. Salley was critical of Respondent’s performance in appraising the property and her reports. He was critical of Respondent’s omission of the fireplace from her first report. He credibly testified that the omission of the fireplace impacted the assessed value of the property. Mr. Salley also credibly testified that Respondent’s work file included a description compliant with a Q3 quality rating for comparable property No. 4. He further testified that the alleged lack of inspection resulted in omission of other things, which will not be addressed as a violation in this matter, as they were not alleged in the Administrative Complaint.1 Respondent’s Testimony Respondent asserted that she did not intend to mislead the Intended User by using MLS photographs of the comparable sale, the Intended User never complained about Respondent’s use of MLS photographs, and the use of MLS photographs had no overall effect on the credibility of the appraisal report. Respondent testified that she signed both appraisal reports as the primary appraiser to demonstrate that she was accepting full responsibility for the appraisal reports. She also indicated in both of her reports that her appraiser trainee provided significant assistance with the appraisal. She asserted that when more than one appraiser is involved in an assignment, USPAP allows for only one appraiser to sign the certification as long as it is disclosed that another appraiser provided significant assistance and the 1 The allegations of fact set forth in the Administrative Complaint are the grounds upon which this proceeding is predicated. Trevisani v. Dep’t of Health, 908 So. 2d 1108, 1109 (Fla. 1st DCA 2005); see also Cottrill v. Dep’t of Ins., 685 So. 2d 1371, 1372 (Fla. 1st DCA 1996). Thus, the scope of this proceeding is restricted to those matters as framed by Petitioner. M.H. v. Dep’t of Child. & Fam. Servs., 977 So. 2d 755, 763 (Fla. 2d DCA 2008). nature of the assistance. The undersigned does not find Respondent’s explanation for signing the appraisal reports as the appraiser instead of the supervisory appraisal persuasive. The undersigned finds that the competent substantial evidence demonstrates that she signed both appraisal reports as the appraiser when she actually served as the supervising appraiser. Although the Intended User was aware of the errors made regarding the appraisal assignment, it did not file the complaint against Respondent and Value Link continues to retain Respondent to perform appraisals. Ultimate Findings of Fact The undersigned finds that there is no clear and convincing evidence that Respondent did not inspect the property as the term is used under the USPAP rules, which governs appraisers. Respondent included a description and support in her work file to support the Q3 quality construction rating for comparable property No. 4. Respondent failed to identify a fireplace in the Subject Property in the first appraisal report, but corrected her error in the second report. The competent substantial evidence demonstrated that Respondent was reasonably diligent in her preparation of the appraisal reports to meet the needs of the Intended User. While there may have been errors in the initial report, the competent substantial evidence demonstrates that Respondent exercised reasonable diligence in preparing the appraisal reports to meet the needs of the Intended User.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered as follows: Finding Respondent guilty of Counts 1 and 2 of the Administrative Complaint; Finding Respondent not guilty of Count 3 of the Administrative Complaint; Imposing a penalty against Respondent’s real estate appraisal license RD 6606 as follows: Placing Respondent on probation for a period of 12 months from the effective date of the Board’s Final Order in this case; Requiring attendance, virtually or in person, at three complete Florida Real Estate Appraisal Board meetings within the probationary period; completion of four (4) corrective Continuing Education courses within six (6) months from the effective date of the Board’s Final Order in this case as follows: Appraiser Self-Protection: Documentation and Record Keeping; Report Certifications: What Am I Signing and Why?; Residential Report Writing vs. Form Filling; and Scope of Work: Appraisals and Inspections. Requiring Respondent to pay stipulated costs in the amount of $1,000 within the probationary period; and Requiring Respondent to pay an administrative fine in the amount of $1,500 within the probationary period. DONE AND ENTERED this 8th day of March, 2021, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Mackenzie K. Medich, Esquire Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399 S YOLONDA Y. GREEN Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of March, 2021. Daniel Villazon, Esquire Daniel Villazon, P.A. Suite 535 5728 Major Boulevard Orlando, Florida 32819 Delhon Braaten, Assistant General Counsel Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399 Julie I. Brown, Secretary Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202 Cristy Conolly, Chair Real Estate Appraisal Board Department of Business and Professional Regulation 400 West Robinson Street, N801 Orlando, Florida 32801 David Axelman, General Counsel Office of the General Counsel Department of Business and Professional Regulation 2601 Blair Stone Road Tallahassee, Florida 32399-2202
