The Issue Whether the Respondent, Andrew S. Meltzer, committed the violations alleged in the Administrative Complaint involving the standards for the development of or the communication of real estate appraisals and, if so, what penalty should be imposed.
Findings Of Fact The Petitioner (Department) is the state agency charged with the responsibility of regulating persons holding real estate appraisers' licenses in Florida. At all times material to the allegations of this matter the Respondent has been a State-certified residential real estate appraiser holding license number 3190. He is 38 years old and has been a real estate appraiser for approximately seventeen years. During that time, he has never been disciplined nor has he been removed from a bank's approved list of appraisers. On or about October 23, 2006, the Respondent prepared a Uniform Residential Appraisal Report for property located at 9900 Southwest 72nd Avenue, Pinecrest, Florida ("the subject property"), for the F S Lending Group. In September 2007, an investigator for the Department received a copy of an appraisal report (Report One) from a closing agent. The report showed that "Aida Martinez" was the name of the buyer. Based on his investigation and her admissions, the investigator found that Martinez was a "straw buyer" and was paid $10,000 for the use of her name and credit report. The person who is alleged to have paid her was not available to talk to investigators due to possible criminal proceedings, but the Department's investigator made it clear that he found no evidence of a connection between that person and the Respondent. A copy of the contract, also provided by the closing agent, showed a different name for the buyer, "Aida Barrero" or "Aida Barren," as best the handwriting and poor quality of the copy could be read. In addition, an addendum to the contract for a purchase price of $999,000, provided that "seller will contribute [provide concessions in the amount of] $173,000 at closing with (sic) to the buyer (for repair of subject property and buyer closing costs). The amount that seller will receive for the property will be $825,000 less seller (sic) closing costs and mortgage payoff if any." Report One has the Respondent's digital signature on it. A mortgage loan on the subject property is now in foreclosure, but no one from the Department contacted the lender to see what appraisal was the basis for making the loan. Based on the fact that the property was listed for sale, Report One has an incorrect "no" answer on page 1 to a question regarding a current or other sales listings in the last 12 months. Based on the provisions in the contract, it also has an incorrect "no" answer to whether there are seller's concessions. When an investigator showed Report One to him, the Respondent immediately retrieved what has been designated "Report Two" from his computer files. Report Two on page 1 named the buyer as "Barren" using only the last name as is customary for the Respondent, and using the same name that was on the appraisal order form sent to the Respondent. Report Two has what appears to be a signed transmittal page to F S Lending Group. It also has a correct "yes" answer on page 1 to the question regarding a current or sales listings in the last 12 months, unlike Report One. Like Report One, it erroneously has a "no" answer on page 1 regarding seller's concessions and is, in all other respects, the same as Report One. The witnesses agreed that the most likely explanation for Report One is that page 1 was altered fraudulently after Report Two was no longer within the Respondent's control. The Respondent's appraisal work file for the subject property included another report (Report Three) that also listed "Barren" as the buyer, but had no signature on it, and was an earlier draft of Report Two. Although the Department's expert said an oral communication of its contents could make Report Three an appraisal, he and the Department's investigator had no evidence of that and agreed that it was not an appraisal. A three-page excerpt of the contract in the Respondent's work file did not include and did not refer to the addendum to the contract with concessions that indicated work needed to be done on the house and that the purchase price was reduced. The three pages were clearly not the entire sales contract, based on missing page and item numbers on the standard form. The Respondent admitted that he only instructs clients to send the "first page, signature pages, addendum pages, and anything that would [a]ffect the purchase price." He said that he only asks for pertinent pages and he could not survive in the industry if he reviewed seventy or a hundred page construction contracts, although he checked the box on the appraisal from that says, "I did analyze the contract for sale of the subject property." The Department's expert prepared a One-Unit Residential Appraisal Field Report (field report) to evaluate Report One that is, except for the name of the buyer and the answer regarding the sales listing, applicable to Report Two. He cited numerous errors and omissions in Report One. He admitted, however, that his work was "sloppy" because he listed the incorrect property address as 12745 Southwest 72 Avenue, the address for the subject property, not 9900 Southwest 72nd Avenue. In his review, the Department's expert found that the Respondent incorrectly categorized the pool on the subject property as a structural improvement rather than a site improvement. Comparable one in Report Two was a superior property, so the Respondent used matched paired sales data that he keeps in his office among other reference material, including the Marshall and Swift publication on cost estimates. He made adjustments for square footage and room count accordingly. The Department's expert testified that USPAP required documentation for any adjustments, and, regarding where the records had to be kept, responded as follows: Q. Now, and again I'm referring to comp number, report number two, comp number one. What documentation does he need in his file to support his adjustment for the site square footage? A. Either -- I would say the best support would be a paired, p-a-i-r-e-d, sales analysis. Q. Does that have to be in the work file? A. Yes. No-no-no-no. It does not have to be in the work file. It could be somewhere in your office readily accessible . . . Adjustments to comparable two were reasonable based on the Respondent's observation that it was "a lot more superior," and his determination, after talking to the realtor that it was completely "renovated like new" which he wrote in his notes. The MLS listing also reported that the renovations were made in 2006. The Respondent received conflicting information from two different data sources concerning the square footage for comparable two, so he called the realtor and used the figure that the realtor verified in his analysis, as the Department's expert testified he should have done. No adjustment was made based on his note that the comparable was "similar in square footage" and less than a 100-square foot difference. The Department's expert differed with the selection and adjustment of comparables three and four due to lot sizes and bedroom/bathroom counts. The subject property is on a lot of 15,832 square feet, or less than half an acre, has four bedrooms and two and a-half baths, with 2,639 square feet of livable, air conditioned space. Comparable three has a lot size of 32,670 square feet, although the living area is similar, and it has only one half bath more than the subject. Although comparable three has a much larger site, the sales price was only $25,000 difference, because of its condition. So the Respondent reasonably made a consistent negative adjustment based on sales history. Comparable four is within a half mile of the subject property, in the Pinecrest area, but it has a lot size of 33,541 square feet, has five bedrooms and four full baths, and has 4,283 square feet of livable space. The Respondent agreed that, as a rule, comparables should have not more than a ten percent adjustment, and that, as the Department's expert noted, lenders require only three comparables. To provide as much information as possible, the Respondent included a fourth comparable with a greater adjustment down because it had a tar and gravel roof, and because the realtor told him "it needed updating." He made it the fourth comparable because it was the least desirable one, but he did not include the fact that it had a tennis court, as he should have. He failed to note that it was gated property, although the Department's expert agreed that whether a gate adds or does not add value to property is "a matter of professional opinion." He also agreed that the differences between a tar and gravel roof and a tile roof would not usually be documented in a work file. It was appropriate to make adjustments based on the condition of the property. As USPAP required, the Respondent inspected the comparables from the street. In reviewing the Respondent's work, the Department's expert observed only the subject property from the street, but not the comparables and testified as follows: Q. But you did not inspect each of the comparable sales at least from the street? A. Correct, correct. * * * Q. -- you testified that you did not inspect the comparables? A. I agree. * * * Q. Correct. And that goes to the whole point where you were earlier discussing that it's hard to verify what he did because you actually didn't go out and see the comparables? A. Correct. Q. Which is contrary to what you were supposed to do? A. Correct. The Respondent made a mathematical error in the calculation of the depreciation at 22% when it should have been 20%, resulting in an underestimate of $8,541. Although he correctly noted that the subject property was listed for sale for $999,000, the Respondent failed to include the Multiple Listing Service (MLS) history, including,". . . data source(s), offering price(s), and date(s)" of listings in the twelve months prior to the effective date of the appraisal. The sales prices for the subject property were listed as $885,000 in June 2006; reduced to $875,000 in July 2006, reduced again to $849,990 in August 2006; and increased to $999,000 on October 14, 2006. The Department's investigator testified that the listing broker said she raised the price based on an appraisal that was faxed to her, but he agreed that it could not have been based on the Respondent's appraisal since the price increase took effect on October 14, 2006, and the Respondent's appraisal report was dated October 23, 2006. Concerning the MLS listings, the Respondent said he called and asked the realtor why the listing price was increased. He accepted the realtor's explanation that improvements in the last six months, a new roof and a new garage door, would justify the increase in the sales price. In his notes, the Respondent wrote "property renovated" and "big realtor" because the realtor was well-known and he believed he could rely on her representations. He also saw the new roof himself, and it made sense to him that a million dollar house could have a 10% increase in value because of those improvements. While this may have been a logical explanation, the Respondent failed to document it in his work file despite the fact that the MLS fluctuations were a "red flag," possibly indicating fraud. The Department's expert found no support in the work files for the Respondent's allocation of 61% of the total value of $903,100, or $550,000 ($34.74), to the site value, but agreed that differences in value based on what buyers might pay for additional land is a matter of legitimate differences in "appraiser opinion." In summary, the Department's expert established that Report Two was inaccurate and misleading because it (1) did not include the terms of the entire contract that affected the price; (2) did not show the value of the pool in the appropriate category; (3) did not report the MLS listings history for the subject property for the past year; (4) had an incorrect value for depreciation; and (5) did not show the tennis court on comparable four. Based on the evidence, the Department did not show, as alleged in paragraph 7 (A) through (D) of the Administrative Complaint, that the Respondent made errors and omissions on Report One other than those carried over from Report Two, before it was altered. Report One was not alleged or proven to be the document communicated by the Respondent's client. Based on the evidence, Report Two is the only accurate representation of the Respondent's work appraising the subject property. Paragraph 8 (A) of the Administrative Complaint alleging that the name of the borrower was incorrect is not supported by the evidence. The Department's assertion in paragraph 8 (B) that the MLS listing history is incomplete is clearly and convincingly supported by the evidence. Paragraph 8 (C) of the Administrative Complaint, alleging that the Respondent failed to review all agreements for sale, and paragraph 8 (D), regarding the misstatement on seller's concessions, are clearly and convincingly established by the evidence. The Department's allegations in paragraphs 9 (A)-(D), related to Report Three, are not established by clear and convincing evidence based on the witnesses' agreement that Report Three was not an appraisal report. With regard to Report Two, the only appraisal report for the subject property that was shown to have been developed and communicated by the Respondent, the evidence is not clear and convincing that the Respondent made the following errors and omissions: as alleged in paragraph 10 (A) and (B), that adjustments for room count and square footage were not explained for comparable sales one and that discrepancies were not resolved for comparable sale two; in paragraph 10 (C), that room count and square footage adjustments for comparable three are not accurate and supported; and in paragraph 10 (D), that room count and square footage adjustments for comparable four are not accurate and supported. With regard to Report Two, the evidence is clear and convincing, as alleged, in paragraph 10 (E) and (F), that the Respondent omitted the tennis court on comparable four and showed no adjustment or reasonable explanation for not doing so. The evidence was not clear and convincing, as alleged in paragraph 10 (G), that different comparables should have been used. The evidence is clear and convincing that the Respondent made a mathematical error in determining the amount of depreciation in Report Two, as alleged in paragraph 11 (A). Depreciation of improvements, as alleged in paragraph 11 (b), is not clearly and convincingly shown to be erroneous. The comparisons of Reports One, Two, and Three in paragraph 12 are rejected as irrelevant, because Report One is altered except for the mistakes carried over from Report Two, and Report Three was a draft. Charges related to Report Three are also not proved for the same reason. Paragraph 13 is established by clear and convincing evidence because the entire sales contract is not in the working files for the subject property. 32. Paragraphs 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 and 26, all related to the absence of documentation for comparable adjustments, the square footage price, value of improvements, and condition are not supported by clear and convincing evidence based on the testimony of Department's expert regarding the required documentation and his incomplete review of the comparables. Paragraph 27, alleging that Aida Martinez was a "straw buyer" is supported by the undisputed evidence presented by the Department.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Appraisal Board: Finding the Respondent guilty on Counts I, II, III, IV, V, VI, VII, IX, X and XI. Recommending suspension of the Respondent's appraisal license for a period of 30 days, followed by probation for a period of six months. Requiring the Respondent to pay an administrative fine of $7,500; and Requiring the Respondent to pay the investigative costs of $1,501.50. DONE AND ENTERED this 17th day of March, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 17th day of March, 2009. COPIES FURNISHED: Robert Minarcin, Esquire Department of Business & Professional Regulation 400 West Robinson Street, N801 Orlando, Florida 32801-1757 Daniel Villazon, Esquire Daniel Villazon, P.A. 1420 Celebration Boulevard, Suite 200 Celebration, Florida 34747 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business & Professional Regulation 400 West Robinson Street, N802 Orlando, Florida 32801-1757 Ned Luczynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Vincent A. Riggio was at all times material hereto a licensed real estate salesperson in the State of Florida, having been issued license number 0206262, effective in 1978, and as such was authorized to prepare real estate appraisals. Respondent completed basic real estate appraisal classes and attended seminars relating to property appraisal. Respondent was an associate with Grover H. Vass & Associates, Inc., 414 West Colonial Drive, Orlando, Florida from July 11, 1986 to December 21, 1988. Respondent's appraisal services were retained by United Mortgage Company on an ongoing basis for the purpose of granting second mortgage loans. In September, 1986, Respondent was requested by United Mortgage Company to prepare the subject appraisal for property located in Lake County, Florida, that was owned by Floyd Bush and his wife. The subject property consisted of land, a single family residential structure, and plant nursery structures and equipment. Pursuant to the request of United Mortgage Company, Respondent undertook the subject appraisal and performed reasonable and necessary investigations and reviews to prepare the same. Respondent had appraised the subject property once before and was aware of the property's unique character. Respondent visited and viewed the property. He observed the nursery business in operation at the time of the inspection. He also attempted to obtain comparable sales and market data but found that , due to the location and uniqueness of the property, he would be required to use, in part, an appraisal method based on the cost approach. Respondent determined the current market value of the property to be $136,800 and prepared his written appraisal report accordingly. The report was transmitted to United Mortgage Company as directed by and with the limitations imposed by them. Respondent had no financial interest in the real estate being appraised nor in any other aspect of the subject transaction. George Jeknavorian loaned $23,500 to Mr. and Mrs. Floyd Bush. The loan was secured by a second mortgage on the subject property, which was processed through United Mortgage Company in September, 1986. At the time of the loan, George Jeknavorian had neither seen the subject appraisal report nor the subject real estate. He relied on persons other than Respondent for his information relating to this loan transaction. The property was apparently encumbered by a first mortgage in the approximate amount of $64,800 at the time of the second mortgage which made a total debt on the property of approximately $88, 300. After two payments had been made subsequent to the closing of the second mortgage loan transaction, the Bushs defaulted on the required payments. Thereafter, Jeknavorian opted to accept a deed in lieu of foreclosure instead of proceeding forward with the foreclosure. Jeknavorian became the owner of the subject property in March of 1988. Jeknavorian listed the property for sale with Ms. Jean Williams, a licensed real estate salesperson. She determined the value of the property to be between $100,000 and $110,000, and with the concurrence of the new owner, she listed it for sale at $110,000. When she inspected the property in 1988, before listing it, Williams observed it to be in serious disrepair. The property as listed consisted of a house, land and plant nursery with all equipment, but with no inventory and no warranty as to the equipment. The price was reduced, but the property did not sell. In late 1988, the holder of the first mortgage took back the property. At that time, Jaknavorian had invested or was owed a total of $33,000. His losses consisted of the amounts due and owing on the second mortgage, payments to the holder of the first mortgage after he became the owner of the subject property and the costs of trash removal after he became the owner of the property in March, 1988. The most credible testimony indicates that the appraisal had several technical defects, but, as a whole, was acceptable to the requirements of United Mortgage Company for which it was prepared.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Administrative Complaint against Respondent be DISMISSED. DONE AND ENTERED this 31st day of January, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings of Fact: Accepted: paragraphs 1,2 (in substance),3,4(in part),6 and 7(in substance) Rejected: paragraphs 5 and 4 (that portion of paragraph 4 which proposes that the complaining witness relied upon the appraisal to his detriment and also that the property was worth no more than $95,000 at the time of the appraisal) as unsupported by the weight of the evidence. Respondent's Proposed Findings of Fact: Accepted: paragraphs 1,2 (in part) ,3,4 (in substance) ,5,7 (sentence 1), 8, 10, 11(in substance), 13(in substance), 14(in substance) Rejected: paragraphs 6(witness not credible),7(several sentences not relevant), 9 (argument). COPIES FURNISHED: Steven W. Johnson, Esquire Division of Real Estate 400 W. Robinson Street Post Office Box 1900 Orlando, FL 32802 Robert L. Taylor, Esquire 225 E. Robinson Street Suite 445 Orlando, FL 32801 Darlene F. Keller Division Director 400 W. Robinson Street Post Office Box 1900 Orlando, FL 32801 Kenneth E. Easley General Counsel Department of Professional Regulation Northwood Centre 1940 North Monroe Street Suite 60 Tallahassee, FL 32399-0792
Findings Of Fact Respondent is a registered real estate broker and was so licensed at all times relevant to this proceeding. At the time of the alleged forgeries, Respondent was an officer of John F. Ring Realty, Inc., and was the manager of that firm's office at 201 North University Drive, Ft. Lauderdale, Florida. On June 25, 1980, Respondent wrote two checks on the account of John F. Ring Realty, Inc., payable to Phyllis Cohen in the sum of $425, and to Ann Sanders in the sum of $550. On July 10, 1980, and on the same account, Respondent wrote a second check to Phyllis Cohen in the amount of $1,000. On September 19, 1980, on the same account, Respondent wrote a check payable to Dan Dickerhoff in the sum of $1,210. Respondent wrote a fifth check on this account on September 26, 1980, payable to Rose Friedman, in the sum of $815. All of these checks were purportedly written to cover sales commissions. Each check bore an endorsement which was purportedly that of the payee, and was endorsed by Respondent. Each named payee testified that the endorsement was not his or her signature, that he or she was not entitled to the funds represented by the checks, and never received the check or the funds. Each identified the signature of Respondent as the drawer. Respondent admitted to his ex-partner, Petitioner's investigator and Phyllis Cohen that he had endorsed and cashed these checks. Respondent also apologized to Ann Sanders when she confronted him with the forgery. These were statements against interest and are therefore admissible as hearsay exceptions. 1/ Respondent's character witnesses established that he has a good reputation in the realtors community. These witnesses have found Respondent to be honest and reliable, and would continue doing business with him regardless of any adverse findings here.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of allegations set forth in the Administrative Complaint. It is further RECOMMENDED that Respondent's license as a real estate broker be revoked. DONE AND ENTERED this 28th day of December, 1981, in Tallahassee, Florida. R. T. CARPENTER, 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 28th day of December, 1981.
Findings Of Fact At all times here involved Defendant, Helen Marie McHenry, was a registered real estate broker with Keim & Hipshire, Inc. and Robert H. Parker was a registered real estate salesman with Keim & Hipshire, Inc. In August, 1975 James and Martha Barber were shown property by Defendant Parker when they visited the office of Keim & Hipshire for the purpose of purchasing a building site in Cape Coral. At this time Keim & Hipshire had listed for sale lots 11 and 12, amongst others, in block 839 in Cape Coral Florida. After showing the Barbers the lots Defendant Parker drove them back to the office of Keim & Hipshire and marked a map of Cape Coral with the site of the lots they had recently visited and gave this map to the Barbers. Thereafter the Barbers executed a contract to purchase lots 11 and 12 and did so purchase these two lots. The offer to purchase dated August 14, 1975 was admitted into evidence as Exhibit 1. The Parkers visited the site marked on the map, which was entered into evidence as Exhibit 2, several times prior to the time that the construction on their house commenced. When construction did commence they did not see any sign of construction on the lots that had been marked on Exhibit 2 but did see, some 4 lots away, construction being commenced, or grading being commenced, on Lots 21 and 22 and their name on the building permit at the property. Believing that lots they had purchased were different they called the office of Keim & Hipshire to complain. Mrs. McHenry asked them to come in to talk about it. At the meeting the Barbers said that the lots they were shown were different than the ones on which the construction was being commenced. The Barbers acknowledged that they had been given a map by Mr. Parker but could not find the map. Lots 11 and 12 and 21 and 22 are both located in Block 839, Unit 26 of Cape Coral. Lots 11 and 12 face in the identical position opposite 37th Terrace that Lots 21 and 22 face opposite 37th Lane. Both lots face west on the same street. These are 4 building sites intervening between these two building sites. At the time they visited the site and at present the topography of both Lots 11 and 12 and Lots 21 and 22 are very similar and there is similar construction in the vicinity of each. When the Barbers were unable to present the map that they acknowledged had been given to them by Mr. Parker, the real estate office was disinclined to give credence to their allegation that they had been sold lots different than the ones they had been shown. The Barbers felt that they were being unfairly treated and made a complaint to the local office of the Florida Real Estate Commission. Shortly thereafter Mr. Lane visited the office of Keim & Hipshire to investigate the complaint that had been made. In the meantime Mrs. Barber was diligently searching for the map that she had been given and located this map after she had called the Real Estate Commission. While Mr. Lane was in the office of Keim and Hipshire to investigate Barber's complaint Mrs. Barber called the real estate office to advise that she had found the map. Mrs. McHenry asked her to please bring the map down, and that Mr. Lane was in the office at that time. When Mrs. Barber brought in the map it became evident that a mistake had been made either in marking the map or in showing the property to the Barbers and Defendants McHenry and Parker forthwith repurchased the lots from the Barbers. In repurchasing the lot they paid the Barbers for all expenses they had incurred. The Barbers ascertained that Lots 21 and 22 were owned by a third party who had these lots for sale. They thereafter purchased the lots from the third party for the identical price that they had originally contracted to purchase Lots 11 and 12. Mr. Parker has been selling lots in Cape Coral for some ten or eleven years. He was thoroughly familiar with the area and recognized that there were many streets with the same numbers and that it was very difficult for people to find sites in Cape Coral absent a map. When he took people out to a site in which they showed interest, he, upon returning to the office and after checking the plot plans, would mark on a map the lot that they had visited. None of the lots involved in this area are marked with signs, there are no lot markings that can readily be found and the only way that one can ascertain with certainty the lot number of a particular tract of land is by either having this lot surveyed or pacing off the distance from a known geographical location such as a street corner.
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 Respondent is a state certified general appraiser, holding license number RI 0000912. In late 1993 First Sarasota Mortgage Company hired the appraisal company for which Respondent worked to prepare a "small income property report." This was a short form appraisal report used for multifamily housing, up to seven attached units. Respondent visited the subject duplex to meet the borrower and inspect the property. He found the duplex in bad disrepair. The building was constructed in 1928. Forty or fifty years ago a prior owner removed a second story from the building, leaving it a single-story building. The interior walls are the original walls of the building, which is a legal nonconforming use in an area without other duplexes or similar properties. The building also suffered from a serious termite inspection. Respondent reported what he had seen to the loan officer at First Sarasota. He told her that the property had considerable deferred maintenance and was not as represented by the borrower to the bank. Contrary to the borrower's assurances, the building was infested with termites, either uninsured or underinsured, and not owner-occupied. The loan officer instructed Respondent to continue the appraisal and try to find comparables. After about two and one- half days of research over a five day period, during which time he kept the loan officer informed of his lack of progress, Respondent contacted the loan officer and told her what he had found. After searching in a 15 mile-radius Respondent had still been unable to find properties that did not require large adjustments due to the age or condition of the property. The loan officer agreed that the comparables were useless. Respondent asked her whether he should continue the project or stop. She said that she would talk to the borrower and get back to Respondent. The loan officer called Respondent the next day and said stop working on the project. The loan officer denied the loan application, evidently due to the inadequacy of the property to be mortgaged. Although the lender ordered the appraisal, the borrower had paid the lender in advance for the appraisal. Respondent went to his supervisor and explained that the borrower had already paid $450, and Respondent felt uncomfortable not giving him anything. Respondent suggested that they provide the lender with a letter of opinion based on their opinion of the worth of the property using a cost approach, omitting the market and income approaches due to the absence of comparables. The supervisor approved the issuance of a letter of opinion. A copy of the letter went to the borrower. Respondent did not hear from the borrower for some time after issuing the letter of opinion. Then the borrower asked for a formal appraisal report. Respondent offered a partial refund or the letter of opinion, but the borrower insisted on a formal appraisal report. which Respondent could not provide. The letter of opinion is on the letterhead of Respondent's employer and is dated October 4, 1993. Addressed to First Sarasota, the letter, which is signed by Respondent, describes the property and states: After a thorough inspection of the property, an intensive search of the Lee County Property appraisers tax records, the last three years of recorded sales taken from the Lee County REDI records, sales from the past two years taken from the Ft. Myers MLS and telephone interviews with local realtors and appraisers, it is our opinion that if an appraisal were to be per- formed on this property, the estimated fair market value of the subject property as of the date of inspection, 09/02/93, would be $65,000 to $75,000. The one-page letter explains in detail the calculations under the cost approach for the property, leading to a total value of $92,000 for land and building. A note adds that the cost approach was given little weight due to the magnitude of needed repairs, including repairs for termite damage. The final sentence of the letter states: "This is a letter of opinion only and is not meant to be misinterpreted or utilized as an appraisal." Twice, the letter disclaims being an appraisal report. The letter is accurate, reasonably detailed, and carefully conditioned. The main issue in the case is whether the letter of opinion is a permissible alternative to a formal appraisal report under the Uniform Standards of Professional Appraisal Practice (USPAP) that are incorporated into the disciplinary statutes. Statement of Appraisal Standards No. 7 was adopted on March 22, 1994, and is included in the 1995 USPAP. Statement No. 7 addresses the situations under which an appraiser may perform an assignment that calls for something less than, or different from, a formal appraisal, as required by USPAP standards. The commentary identifies the issue as follows: Throughout the history of real property appraisal practice, a perception has existed that certain types of transactions in the real estate market require something less than or different from a Complete Appraisal. The phrase something less than or different from in this context has meant a Limited Appraisal and a condensed report. To distinguish this type of assignment from a Complete Appraisal, different names have been created for this activity, including Letter Opinion of Value, Update of an Appraisal, Recertification of Value, and, more recently, Evaluation of Real Property Collateral. 1995 USPAP, page 73. Statement No. 7 proceeds to describe a "complete appraisal" and "limited appraisal" and a "self-contained appraisal report," "summary appraisal report," and "restricted appraisal report." Mentioning a provision that permits an appraiser to enter into an agreement that "calls for something less than, or different from, the work that would otherwise be required by the specific guidelines," Statement No. 7 explains: This provision goes on to permit limited departures from specific guidelines provided the appraiser determines the appraisal process is not so limited as to mislead the client and intended users of the report, the appraiser advises the client of the limitations and discloses the limitations in the report, and the client agrees that the limited service would be appropriate. 1995 USPAP, page 73. After an extended discussion of the types of appraisal reports and appraisals, Statement No. 7 concludes in part: Clarification of Nomenclature Various nomenclature has been developed by clients and client groups for certain appraisal assignments. The development of this Statement on Appraisal Standards is a response to inquiries about several types of appraisal assignments, and it is appropriate to clarify the meaning of these terms for future reference. The term Letter Opinion of Value has been used to describe a one-page letter sent to a client that stated a value estimate and referenced the file information and experience of the appraiser as the basis for the estimate. This type of service does not comply with USPAP, and should be eliminated from appraisal practice. . . . The Restricted Report is the minimum report format and replaces the concept of the Letter Opinion of Value. 1995 USPAP, page 75. The 1993 Uniform Standards of Professional Appraisal Practice, which was in effect at the time of the subject transaction, does not contain Statement No. 7 because the statement was not in effect at the time, nor at the time of the subject transaction. Appraisers have historically used letters of opinion and not been disciplined. Statement No. 7 represents an attempt, in 1994, to provide and clarification "for future reference." Nothing in Statement No. 7 nor the 1993 USPAP supplies Petitioner with any basis for disciplining Respondent for the use of the letter of opinion in 1993. The client in this case was First Sarasota, to which the borrower paid the appraisal fee. Respondent's letter is directed to the client, not the borrower. Nothing in the letter could possibly mislead the client or the borrower. The limitations of the letter are largely apparent in the letter itself. Perhaps most important, Respondent consistently kept the client informed about the project and disclosed for his client the abject condition of the property and misrepresentations of the borrower. Respondent's diligence in fact engendered the complaint from the borrower that resulted in this case. After the subject transaction the restricted appraisal report replaced the letter of opinion. Respondent discontinued use of letters of opinion since the October 4, 1993 letter. In October 1993, however, Petitioner could not discipline an appraiser for the use of a letter of opinion, at least under the facts of this case. The October 4, 1993 letter was not an appraisal report under either then-existing USPAP standards, but was a widely recognized alternative to a formal appraisal report. In October 1993, as is clear from the language of Statement No. 7, USPAP had not created the alternative of the restricted appraisal report and had not limited all communications from appraisers to one of three types of reports. There is absolutely no evidence that Respondent failed to use reasonable diligence in the preparation of an appraisal report.
Recommendation It is RECOMMENDED that the Florida Real Estate Appraisal Board enter a final order dismissing the Administrative Complaint against Respondent. ENTERED on December 21, 1995, in Tallahassee, Florida. ROBERT E. MEALE, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December, 1995. COPIES FURNISHED: Linda Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Steven W. Johnson, Senior Attorney Department of Business and Professional Regulation Division of Real Estate P.O. Box 1900 Orlando, FL 32802 Gary A. Berleue, pro se 13604 Wainwright Ave. Port Charlotte, FL 33953 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, FL 32802-1900
Findings Of Fact At all times relevant hereto, respondent, Landmark Real Estate and Investment Exchange, Inc. (Landmark), was a corporation licensed as a broker. It holds license number 0170938 issued by petitioner, Department of Professional Regulation, Division of Real Estate (Division). Respondent, Stephen P. McCrady, was a licensed real estate broker having been issued license number 0227524 by petitioner. McCrady was also the qualifying broker and officer of Landmark. License renewal fees have apparently not been paid by respondents since 1984 and their licenses are accordingly considered to be inactive. However, such licenses can be reactivated by respondents paying the required fees and completing any necessary continuing education requirements. At the present time, McCrady's license has a status of "pending litigation" because of the instant proceeding. On October 28, 1983, the Division (then the Florida Real Estate Commission) entered a Final Order against respondents in which respondents were reprimanded and ordered to pay a $500 fine within thirty days from the date of order. This fine was never paid. On April 3, 1984, respondent McCrady filed a chapter 7 petition in the United States Bankruptcy Court for the Southern District of Florida. On September 17, 1984, that Court entered a Discharge of Debtor order which released the debtor (McCrady) "from all dischargeable debts" and declared null and void certain other debts. The order further provided that "all creditors who [sic] debts are discharged ... (or) whose judgments are declared null and void ... are hereby enjoined from commencing, continuing or employing any action, process or act to collect, recover or offset any such debt as a personal liability of the debtor." Respondent Landmark did not file a petition nor was it a party to McCrady's bankruptcy proceeding. When the agency Final Order was entered, McCrady could not afford to pay the $500 fine. However, he telephoned a Division attorney and asked if he could pay the fine by installments. He was told he could not do this. Shortly afterwards he filed for personal bankruptcy. It was his impression that the bankruptcy proceeding discharged all debts, including the $500 administrative fine. McCrady did not advise the Division that he had filed for bankruptcy until after the complaint in this proceeding had been filed. McCrady intends to again use his real estate license in the future. Because of serious personal and financial problems, he has not used the license for several years.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondents be found guilty of violating Rule 21V-10.31, Florida Administrative Code, and Subsection 475.25(1)(e), Florida Statutes (1985), and that they each be required to pay $250 within thirty days from date of the final order in this proceeding to satisfy the terms of the Final Order previously entered on October 23, 1983. Otherwise, their licenses should be revoked. DONE and ORDERED this 19th day of August, 1986, in Tallahassee, Florida. DONALD R. ALEXANDER 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 19th day of August, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1145 Petitioner: Covered in finding of fact 1. Covered in finding of fact 2. Covered in finding of fact 2. Covered in finding of fact 3. COPIES FURNISHED: Susan J. Hartman, Esquire Post Office Box 1900 Orlando, Florida 32802 Ronald R. Rogowski, Esquire 628 S.E. 5th Avenue Ft. Lauderdale, Florida 33301 Mr. Harold R. Huff, Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802
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.
