The Issue Whether Respondent committed the violations alleged in the Administrative Complaint in the manner specified therein and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is now, and has been since March 25, 2004, a Florida-certified residential real estate appraiser, holding license number RD 4405. She has not been the subject of any prior disciplinary action. From 1998 until becoming certified as a residential real estate appraiser, Respondent was a Florida-registered trainee appraiser. At all times material to the instant case, the Subject Property was a single-family residential property, owned by Pablo Perez, housing the residents of an assisted living facility (ALF) operated by South Florida Home Services, Inc., pursuant to a license issued by the Agency for Health Care Administration (AHCA). At all times material the instant case, the Subject Property was zoned by the City of Miami for residential use. The ALF that operated on the premises of the Subject Property was inspected by Miami-Dade County Health Department Code Inspector Manuel Alzugaray on April 6, 2007. This was the only Miami-Dade County Health Department inspection of the premises conducted in April 2007. The "results" of Mr. Alzugaray's April 6, 2007, inspection were "unsatisfactory." The written "inspection report" that Mr. Alzugaray completed following the inspection contained the following "comments and instructions": Repair wall in the 2nd stall of the restroom across from Rm. #5. Repair all holes throughout the facility & floor tiles also. Maintain restrooms & facilities clean. Provide screen for kitchen restroom. Evidence of rodents in the kitchen. Evidence of termites in restroom across from Rm. 5. Mr. Alzugaray noted, during his inspection, that the doors of the residents' bedrooms had removable numbers displayed on them and that the "restroom across from Rm. #5" had two toilets separated by a "divider." Mr. Alzugaray returned to the Subject Property to conduct a follow-up inspection on May 17, 2007. The "results" of Mr. Alzugaray's May 17, 2007, inspection were "unsatisfactory." The written "inspection report" that Mr. Alzugaray completed following this May 17, 2007, inspection contained the following "comments and instructions": Evidence of rodent droppings in the kitchen. Provide screen for window in the kitchen bathroom. Remove mold & mildew from shower in the kitchen restroom. Repair restroom in the 2nd floor (toilet doesn't flush). During both the April 6, 2007, and May 17, 2007, inspections, there were, by Mr. Alzugaray's count, 14 ALF residents present on the premises. (The facility had a licensed capacity of 14 residents.) Mr. Alzugaray conducted two additional inspections of the ALF in 2007, one on September 12, 2007, and the other on November 2, 2007, with the former yielding "unsatisfactory" "results" (due to "drawers in [the] kitchen [not being] clean" and there being "evidence of roach droppings in the kitchen area") and the latter yielding "satisfactory" "results." In April 2007, Respondent was working as a residential real estate appraiser for Atlantic Appraisal Consultants Corporation, when she received an assignment to conduct a residential appraisal of the Subject Property for Affordable Finance Group (Affordable). Affordable was in the business of making residential mortgage loans, and only residential mortgage loans. It did not make commercial mortgage loans. Affordable had received an application from Adolfina Ortega for a residential mortgage loan to purchase the Subject Property from its owner, Mr. Perez. The purpose of the appraisal was to determine whether the market value of this single-family residential property justified Affordable's making the loan. Affordable had telephoned Respondent's secretary on April 10, 2007, to order the appraisal. Respondent's secretary inputted the information she had received from Affordable "in the [office] computer" and generated a printed appraisal order (Order), which she gave to Respondent. The Order indicated that Affordable was requesting an "SFA" (a shorthand reference to a "single family appraisal") of the Subject Property in connection with a mortgage loan sought by Ms. Ortega. This was an appraisal Respondent was competent and qualified to perform by herself as a Florida-certified residential real estate appraiser. The same day the appraisal was requested (April 10, 2007), Respondent telephoned Affordable and discussed the appraisal assignment with an Affordable representative. During this telephone conversation, Respondent was told that the Subject Property was owner-occupied and that its sale was "pending contract." She was also given the name of the owner/seller, Mr. Perez, and his telephone number. Nothing was said to Respondent to suggest that she was expected to perform anything other than the "SFA" indicated on the Order. No mention was made of any business that was part of the sale. Later in the day on April 10, 2007, Respondent telephoned Mr. Perez and made arrangements to visit the Subject Property on the morning of April 12, 2007, as part of the appraisal process. Before her visit, to find out more information about the Subject Property and to obtain possible "comparable sales" properties, Respondent performed internet-based research using generally accepted data sources (MLS, FARES, and RealQuest) that Florida-certified residential real estate appraisers typically employ for such purposes. According to the data her research uncovered, the Subject Property was a one-story, single-family residence, with three bedrooms and two bathrooms, that was owned by Mr. Perez and had R-4 zoning. There was nothing in any of the data sources that she used to indicate that an ALF or any other business was operating on the premises of the Subject Property. Respondent visited the Subject Property the morning of April 12, 2007, as scheduled. When she arrived (somewhere between 10:00 and 10:30 a.m.), she was greeted by a "gentleman."4 Respondent and this "gentleman" were the only persons present at the Subject Property during the entire time Respondent was there. After measuring the exterior of the structure, Respondent asked for and was granted permission to go inside to do a "very basic" "walk[] through," the purpose of which was to note the number and location of the rooms and the general condition of the residence. Respondent's "walk[] through" took approximately ten minutes, which was an adequate amount of time for her to accomplish what she needed to. As part of the "walk[] through," she "peek[ed] in" the bathrooms. The last thing that Respondent did during her visit was to take photographs outside the residence.5 Respondent witnessed nothing during her visit to suggest that the Subject Property was anything other than a single-family residential property. She had no reason to believe, based on the observations she made,6 that the property was being used as an ALF or to conduct any other business activity. She did discover, however, as a result of the observations she made during her visit, that the on-line information she had obtained about the Subject Property was inaccurate to the extent that it indicated that the Subject Property was a one-story structure with three bedrooms, not a two-story structure with five bedrooms. Appropriately, in completing her appraisal, she relied, not on this erroneous information, but on what she had actually observed during her visit. On her way back from the Subject Property, Respondent drove to, and parked on the street outside of, each of the three possible "comparable sales" properties she had selected before setting out that morning (all of which were located within 1.28 miles of the Subject Property). She looked at and took exterior photographs of each property, but did not go inside any of them. On the Order, which she had taken with her, she wrote notes recording her observations about each property. Thereafter, Respondent sought to verify the information she had gleaned from her internet-based research about these three "comparable sales" properties (as she was professionally required to do, if she wanted to use them for her appraisal). She did so, appropriately, by contacting individuals who had been involved in these "comparable sales" transactions (realtors, in the case of two of the transactions, and the purchasers, in the case of the other). Where there was a conflict between what her research had revealed and what she was told by these individuals, she, again appropriately, relied on the latter in completing her appraisal. Using a pre-printed Fannie Mae form, Respondent completed a Summary Appraisal Report (Report), dated April 30, 2007, containing her opinion that the market value of the Subject Property as of April 25, 2007 (the date Respondent started preparing the Report) was $590,000.00 (which was price Ms. Ortega had agreed to pay Mr. Perez for the Subject Property). Respondent arrived at her opinion by conducting a sales comparison analysis. (She conducted neither a cost analysis nor an income analysis.) As she indicated in the Report, Respondent, appropriately, appraised the Subject Property as a single-family residential property, as she had been asked to do by Affordable. The first page of Respondent's Report contained five sections: "Subject," "Contract," "Neighborhood," "Site," and "Improvements." The "Subject" section of the Report read, in pertinent part, as follows: Property Address: 140 NW 9 AVENUE City: MIAMI State: FL Zip Code: 33128 County: MIAMI DADE Borrower: ORTEGA Owner of Public Record: PEREZ Neighborhood Name: RIVERVIEW * * * Occupant: X Owner _ Tenant _ Vacant * * * Property Rights Appraised: X Fee Simple _ Leasehold _ Other (Describe) * * * Assignment Type: X Purchase Transaction _ Refinance Transaction _ Other (describe) Lender/Client: AFFORDABLE FINANCIAL GROUP . . . . . Report data source(s) used, offering price(s), and date(s): PUBLIC RECORDS, MLS TAX ROLLS, REALQUEST The "Contract" section of the Report read, in pertinent part, as follows: I _ did X did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. SALE PRICE IS $590,000 AND 4/2007 CONTRACT DATE PER SALES CONTRACT. Contract Price: $590,000 Date of Contract: 4/2007 Is the property seller the owner of public record: X Yes _ No Data Sources: PUBLIC RECORDS Is there any financial assistance (loan charges, sale concessions, gift or down payment assistance, etc.) to be paid by any party on behalf of the borrower? X Yes _ No If Yes, report the total dollar amount and describe the items to be paid: 20,000 SELLER TO PAY $20,000 TOWARDS BUYER[']S CLOSING COST[s]. Respondent did not "analyze the contract for sale for the subject purchase transaction" because she was not in possession of a written contract at the time she prepared her Report. She had merely been told (by the Affordable representative) of the purported existence of such a contract and of its salient terms. It was not unreasonable, however, for her to have relied on these oral representations and included in the Report the information with she had been provided, as she did. Following the development and communication of the Report, Respondent received a copy of a written contract, dated May 11, 2007, signed by Mr. Perez, as the seller of the Subject Property, and Ms. Ortega, as the buyer. Respondent maintained this written contract in her work file.7 The contract was a "standard purchase and sale contract for the sale of a residential home." Consistent with the information contained in the "Contract" section of the Report, the "contract price" was $590,000.00, and provision was made in the contract for a $20,000.00 "seller contribution toward closing costs." The contract made clear that what was being purchased and sold was the Subject Property, "together with all improvements and attached items," as well as "all appliances in working condition[]," and nothing else (including any business enterprise that might have been operating on the premises or any items associated therewith).8 In the "Neighborhood" section of the Report, Respondent identified the boundaries of what she considered, in her judgment, to be the "neighborhood" in which the Subject Property was located. She identified these boundaries as follows: "US-1 TO THE SOUTH, I-95 TO THE EAST, SR 836 TO THE NORTH, AND SW 17TH AVENUE TO THE WEST." She then provided the following "Neighborhood Description" and "Market Conditions": Neighborhood Description: Subject is located in a typical neighborhood. Typical neighborhood amenities such as schools, shopping, parks, houses of worship and transportation are within a reasonable distance of the subject but do not intrude on residential areas. No unfavorable factors affect marketability. Subject is convenient to employment centers and is stable at present time. The predominate price for the area does not appear to [sic]. Market Conditions (including support for the above conclusions): Property values are stable along with supply and demand. Competitive listings are selling within 3-6 months. Typical sales are at 93-95% of listing price. Sellers need not negotiate financing related concessions as most sales are conventional or FHA/VA financed. Identifying the precise boundaries of a property's "neighborhood" is largely a subjective exercise.9 While Petitioner's expert, Mr. Spool, may have drawn different, narrower "neighborhood" boundaries had he been the one doing the appraisal (as he testified he would have at hearing), it cannot be clearly said that the boundaries identified by Respondent in her Report were "incorrect," as alleged in numbered paragraph 13A. of the Administrative Complaint's "Essential Allegations of Material Fact." Where the boundaries of the Subject Property's "neighborhood" lie is a matter of judgment about which reasonable people may disagree. The "Site" section of the Report read, in part, as follows: * * * View: RESIDENTIAL Specific Zoning Classification: R-4 (AS PER TAX ROLL). Zoning Description: MULTI-FAMILY HIGH- DENSITY RESIDENTIAL. Zoning Compliance: X Legal _ Legal Nonconforming (Grandfathered Use) _ No Zoning _ Illegal (describe) Is the highest and best use of subject property as improved (or as proposed per plans and specifications) the present use? X Yes _ No If no, describe. * * * In the "Improvements" section of the Report, Respondent indicated, among other things, that the Subject Property was a one-unit structure built in 1920, with an "effective age" of 30 years. Next to "# of stories," Respondent inadvertently entered, "One," but next to "Design (Style)," she put, "2 Story" (which, as the "Subject Front" photograph appended to the Report plainly showed, was, of these two conflicting entries, the correct one). Other information provided in this section included the following: Finished area above grade contains: 8 Rooms, 5 Bedrooms, 2 Bath(s) 1,971 Square Feet of Gross Living Area Above Grade. Additional features (special energy efficient items, etc.) THE SUBJECT HAS A COVERED ENTRY, TILE/WOOD FLOORS, CENTRAL AND UNIT A/C, CHAIN LINK FENCE, OPEN PARKING, ALUM. PATIO, AND GRAVEL DRIVEWAY. Describe the condition of the property (including needed repairs, deterioration, renovation, remodeling, etc.). NORMAL PHYSICAL DEPRECIATION FOR AGE. THE SUBJECT APPEARS TO BE IN OVERALL AVERAGE CONDITION. Are there any physical deficiencies or adverse conditions that affect livability, soundness, or structural integrity of the property? _ Yes X No If Yes, describe Does the property generally conform to the neighborhood (functional utility, style, condition, use, construction, etc.)? X Yes _ No If No, describe The second page of Respondent's Report contained two sections: "Sales Comparison Approach" and "Reconciliation." In the "Sales Comparison Approach" section of the Report, Respondent identified the three "comparable sales" properties ("comparables") that she initially examined to estimate (using a sales comparison analysis) the market value of the Subject Property, and she provided information about these "comparables," as well as the Subject Property. The following were the three "comparables" Respondent selected for her sales comparison analysis: Comparable Sale 1, located at 2805 Southwest 4th Avenue in Miami (1.28 miles from the Subject Property); Comparable Sale 2, located at 460 Southwest 18th Terrace in Miami (.92 miles from the Subject Property); and Comparable Sale 3, located at 1285 Southwest 16th Street in Miami (1.18 miles from the Subject Property). It is alleged in numbered paragraph 13D. of the Administrative Complaint's "Essential Allegations of Material Fact" that Respondent erred in using these "comparables" because none of them were "located in the Subject Property's defined market area."10 It is not at all clear from a review of the evidentiary record, however, what constituted the "Subject Property's defined market area," as that phrase is used in the Administrative Complaint,"11 and it therefore cannot be said, without hesitation, that any of these "comparables" were located outside of this "market area." The Report accurately reflected that the "comparables," as well as the Subject Property, were "Residential" properties. Contrary to the assertion made in numbered paragraph 13E. of the Administrative Complaint's "Essential Allegations of Material Fact," "Respondent's use of single family Comparable Sales was [not] inappropriate," given that the Subject Property was a single-family residential property (that, according to the information Respondent had obtained from the client, Affordable, was being sold to an individual seeking a mortgage loan from Affordable to finance the purchase transaction), and Affordable had requested, and Respondent was performing, appropriately, an "SFA" to determine the value of this single-family residential property. That an ALF (which was not part of the purchase transaction) was operating on the premises of this single-family residential property did not render "Respondent's use of single family Comparable Sales . . . inappropriate." Comparative information relating to the three "comparables" chosen by Respondent and the Subject Property was set forth in a grid (Sales Comparison Grid) in the "Sales Comparison Approach" section of the Report. On the "Design (Style)" line of the Sales Comparison Grid, Respondent indicated that the Subject Property was a "2 Story" structure. On the "Above Grade Room Count" line of the Sales Comparison Grid, Respondent entered the following with respect to the Subject Property and the three "comparables": Subject Property: 8 (Total); 5 (bdrms.); (Baths). Comparable Sale 1: 6 (Total); 3 (bdrms.); (Baths). Comparable Sale 2: 6 (Total); 3 (bdrms.); 1 (Bath). Comparable Sale 3: 7 (Total); 4 (bdrms.); 3 (Baths). The following "Adjusted Sale Price[s]" for the three "comparables" were set forth on the last line of the Sales Comparison Grid: Comparable Sale 1: $595,800.00; Comparable Sale 2: $571,400.00; and Comparable Sale 3: $628,700.00. At the end of the "Sales Comparison Approach" section (beneath the grid) was the following "Summary of Sales Comparison Approach" and "Indicated Value by Sales Comparison Approach": Summary of Sales Comparison Approach: SEE ATTACHED ADDENDUM. THE SUBJECT PROPERTY IS SIMILAR TO ALL THREE COMPARABLE CLOSED SALES WHICH WERE CAREFULLY SELECTED AFTER AN EXTENSIVE SEARCH IN AND OUT OF THE SUBJECT NEIGHBORHOOD. THIS SEARCH CONSISTED OF ANALYZING NUMEROUS CLOSED SALES AND NARROWING THIS LIST DOWN TO THE THREE MOST SIMILAR. AFTER CLOSE EVALUATION OF THE THREE COMPARABLE SALES UTILIZED, ADJUSTMENTS TO ALL COMPARABLES[S] WERE MADE ACCORDINGLY. Indicated Value by Sales Comparison Approach: $590,000. In the first part of the "Reconciliation" section of the Report, Respondent reiterated that $590,000.00 was the "Indicated Value by [the] Sales Comparison Approach," and she added that she used this approach in valuing the Subject Property because it "best reflect[ed] [the] action of buyers and sellers in the market place." The second and final part of the "Reconciliation" section of the Report read, in part, as follows: This appraisal is made x "as is," . . . . . Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser's certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is $590,000, as of APRIL 25, 2007, which is the date of inspection and the effective date of this appraisal. The "date of inspection" was actually April 12, 2007, not April 25, 2007. On the third page of the Report, Respondent indicated that the "income approach [was] not applied [to determine the Subject Property's value] due to lack of rental data." The fourth page of the Report contained pre-printed boilerplate, including the following: This report form is designed to report an appraisal of a one-unit property . . . . The appraisal report is subject to the following scope of work, intended use, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary, based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser's continuing education or membership in an appraisal organization, are permitted. SCOPE OF WORK: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form, including the following definition of market value, statement of assumptions and limiting conditions, and certifications. The appraiser must, at a minimum: perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at least the street, research, verify, and analyze data from reliable public and/or privates sources, and report his or her analysis, opinions, and conclusions in this appraisal report. INTENDED USE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client. DEFINITION OF MARKET VALUE: The most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. * * * STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser's certification in this report is subject to the following assumptions and limiting conditions: The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that the title is good and marketable and will not render any opinions about the title. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. * * * The fifth and sixth pages of the Report contained additional pre-printed boilerplate in the form of an "Appraiser's Certification," wherein "the Appraiser [Respondent] certifie[d] and agree[d] that": I have, at a minimum, developed and reported this appraisal in accordance with the scope of work requirements stated in this appraisal report. I performed a complete visual inspection of the interior and exterior areas of the subject property. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness or structural integrity of the property. I performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison approach to value. I have adequate comparable market data to develop a reliable sales comparison approach for this appraisal assignment. I further certify that I considered the cost and income approaches to value but did not develop them, unless otherwise indicated in this report. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report. I researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise indicated in the report. I selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property. I have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land. I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales. I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property. I have knowledge and experience in appraising this type of property in this market area. I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located. I obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct. I have taken into consideration factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the inspection of the subject property or that I became aware of during research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property. I have not knowingly withheld any significant information from this appraisal and, to the best of my knowledge, all statements and information in this appraisal report are true and correct. I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owner or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supporting) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application). I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report.[12] I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in this appraisal report; therefore any change made to this appraisal is unauthorized and I will take no responsibility for it. I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report. The lender/client may disclose or distribute this appraisal to the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser's or supervisory appraiser's (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party, including, but not limited to, the public through advertising, public relations, news, sales, or other media. I am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further, I am also subject to the provisions of the Uniform Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me. The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties. If this appraisal was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. Any intentional or negligent misrepresentation contained in this appraisal report may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Section 1001, et seq., or similar state laws. Directly beneath the foregoing boilerplate was Respondent's signature. Appended to the Report was a "Supplemental Addendum," which read, in pertinent part, as follows: ALL SALES WERE CLOSED SALES AND CONSIDERED STRONG MARKET VALUE INDICATORS FOR THE SUBJECT PROPERTY. THEY ARE RELATIVELY SIMILAR TO THE SUBJECT IN TERMS OF LOCATION, QUALITY OF CONSTRUCTION, RELATIVE SIZE, ROOM COUNT AND MARKET APPEAL. THEY ARE LOCATED IN THE SUBJECT'S IMMEDIATE AREA AND ALL SHARE THE SAME IF NOT SIMILAR NEIGHBORHOOD AMENITIES. ADJUSTMENTS WERE REQUIRED FOR SITE CONDITION, BATH, GLA, CARPORT AND POOL. AFTER EXTENSIVE RESEARCH, THE THREE SALES USED WERE DEEMED GOOD INDICATORS OF MARKET VALUE. EQUAL EMPHASIS WAS PLACED ON ALL THREE SALES. * * * SCOPE OF APPRAISAL The appraisal is based on the information gathered by the appraiser from public records, other identified sources, inspection of the subject property and neighborhood, and selection of comparable sales within the market area. The original source of the comparables is shown in the Data Source section of the market grid along with the source of confirmation, if available. The original source is presented first. The sources and data are considered reliable. When conflicting information was provided, the source deemed most reliable has been used. Data believed to be unbelievable was not included in this report nor was used as a basis for the value conclusion. * * * HIGHEST AND BEST USE The Highest and Best Use of a site is that reasonable and probable use that supports the highest present value, as defined, as of the effective date of the appraisal. For improvements to represent[] the highest and best use of a site, they must be legally permitted, be financially feasible, be physically possible and provide[] more profit than any other use of the site would generate. SITE The improvements on the property are legal and conform to current zoning regulations. In the event of a loss by fire [] all improvements could be rebuilt without obtaining a zoning variance. The opinion of zoning compliance requirements expressed in this appraisal is based on the appraiser's inspections of the subject property and comparison to the appropriate zoning ordinance. This opinion does not represent a certification which can only be obtained from the proper jurisdictional authority. * * * ROOM LISTS The number of rooms, bedrooms, baths and lavatories is typical of houses in this neighborhood. Foyers, laundry rooms and all rooms below grade are excluded from the total room count. * * * CONDITION OF COMPONENTS Any opinion expressed in this appraisal pertaining to the condition of the appraised property's, or comparable property's components, is based on observation[s] made at the time of inspection. They rely on visual indicators as well as reasonable expectations as to adequacy and dictated by neighborhood standards relative to marketability. These observations do not constitute certification of condition, including roof or termite problems, which may exist. If certification is required, a properly licensed or qualified individual should be consulted. * * * DIRECT SALES COMPARISON APPROACH Direct Sales Comparison Approach is based on the comparison of the subject with sales of similar type properties. Adjustments are made to these sales for differences with the subject. [T]his is generally considered the best indicator of value. * * * CONDITIONS OF APPRAISAL PERSONAL PROPERTY/INTANGIBLE/NON-REALTY ITEMS Items of personal property and other non- realty items have not been included in the appraisal o[f] the subject property. The indicated Market Value for the subject property does not include items o[f] personal property or other non-realty property. * * * Via the "Supplemental Addendum," Respondent advised the reader of the Report that, where she had "conflicting information," she included in the Report only the data that was, in her view, "most reliable." While she did not, anywhere in the Report, specify or describe how this included data differed from the less reliable data she excluded, she was under no professional obligation to do so (contrary to the allegation made in numbered paragraph 13C. of the Administrative Complaint's "Essential Allegations of Material Fact"). Appended to the Report, in addition to the "Subject Front" photograph referenced above, were five other photographs: two additional photographs Respondent took when she was at the Subject Property on April 12, 2007 (a "Subject Rear" photograph and a "Subject Street" photograph); and an exterior photograph of each of the three "comparables." Also appended to the Report was a sketch of the Subject Property, showing it to be a two-story, five-bedroom, two-bath structure. Approximately two months after Respondent had developed and communicated the Report, Affordable asked her to examine two "additional comparables to support [the determination of] value" she had made. Respondent complied with this request. The two "additional comparables" she selected were Comparable Sale 4, located at 330 Southwest 29th Road in Miami (1.02 miles from the Subject Property), and Comparable Sale 5, located at 441 Southwest 29th Road in Miami (1.29 miles from the Subject Property). According to Respondent's calculations, Comparable Sale 4 had an "Adjusted Sale Price" of $603,800.00, and Comparable Sale 5 had an "Adjusted Sale Price" of $599,200.00. She further determined, and on or about June 25, 2007, reported to Affordable, that her analysis of these two additional comparables "support[ed] [her prior determination of] market value."13
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board issue a Final Order finding the record evidence insufficient to support a finding of Respondent's guilt of any of the counts of the Administrative Complaint and, based upon such finding, dismissing the Administrative Complaint in its entirety. DONE AND ENTERED this 28th day of January, 2010, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 28th day of January, 2010.
Findings Of Fact Respondent Lynde1 Gale Goodwin is a licensed real estate broker with license number 0032681 Respondent Florida Appraisal Department, Inc., is a corporation licensed as a broker having been issued license number 0233195. Goodwin's last license was issued as a broker c/o Florida Appraisal Department, Inc., at 2990 North Federal Highway, Ft Lauderdale, Florida 33306 which is the business address of Florida Appraisal Department, Inc. Respondent Goodwin was operating as a real estate broker and as sole qualifying broker and officer of Florida Appraisal Department, Inc., at all times material hereto. On or about March 21, l984 an appraisal on certain real property owned by Robert and Martha Silva, located at 633 Lime Lane, Marathon, Florida was completed and submitted to Government Employees Corporation on behalf of Respondents by Charles Stange, an associate of Respondent Goodwin. At the time Stange held a real estate salesman's license, was receiving training from Goodwin on appraising and was also investing in Florida Appraisa1 Department, Inc. Stange bad been assigned the Silva appraisal by Respondent Goodwin, who accompanied him on a trip to Marathon to inspect the property and to locate comparable properties on which to base the appraisal. When they arrived in Marathon, Stange initially dropped Goodwin off so he could take care of some other business, and Stange proceeded to the Silva property, entered the house, drew a sketch. took picture6 and also attempted to locate three comparables. After completing his business, Goodwin joined Stange and assisted with the measurement of the Silva property. When they returned to their offices at Florida Appraisal Department, Inc , Stange prepared a draft of the appraisal report on the Silva property. When Respondent Goodwin reviewed this draft, he noted a problem with two of the comparables and instructed Stange to get two more comparables since the ones he had chosen were not suitable. Stange objected to having to locate two more comparables because it meant having to make another trip to Marathon. He did not return to Marathon, but redrafted the appraisal using falsified comparables. The addresses he used included what was, in fact, a trailer park and a non-existent address. He also showed the source of these comparables as "Realtron" which is a computerized multiple listing service that does not even serve Marathon. The falsified appraisal was submitted to Government Employees Corporation on or about March 21, 1984 over Respondent Goodwin's signature, and based thereon a loan was approved. Respondent Goodwin does not remember signing the Silva appraisal and disputes the signature appearing thereon as being his. However, after weighing all the evidence and demeanor of the witnesses, it appears that Stange simply changed the information on two of the Silva comparables to satisfy Goodwin's concerns, and presented the redrafted appraisal to Goodwin who assumed, but did not check, that Stange had return d to Marathon to obtain the corrected comparable data. Goodwin thereupon signed the Silva appraisal and it was submitted to Government Employees Corporation. Stange and Goodwin split a $150 fee for this appraisal. Respondent Goodwin does not routinely follow up on appraisal he has assigned to others to perform even though some of those appraisals are sent out over his signature. He has no way of knowing if an appraisal is overdue, other than by the person who ordered it calling to ask about the status. Florida Appraisal Department, Inc., does over 1,000 appraisals a year and employs seven licensees and two clericals. The Silva appraisal report misrepresented that the subject property had been analyzed with reference to single family residential property in the area that had been sold in the last six (6) months. It further misrepresented two of the comparables, one of which was non-existent and the other of which was a trailer park. Finally, the appraisal misrepresented the source of the comparables by indicating "Realtron" which in fact does not serve the Marathon area. Government Employees Corporation required Respondent Goodwin's signature to appear on all appraisals it ordered from Florida Appraisa1 Department, Inc.
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.
The Issue The issues are as follows: (a) whether Respondent violated a standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice (USPAP) in violation of Section 475.624(14), Florida Statutes (1995); (b) whether Respondent failed to exercise reasonable diligence in developing an appraisal in violation of Section 475.624(15), Florida Statutes (1995); and (c) whether Respondent is guilty of culpable negligence or breach of trust in a business transaction in violation of Section 475.624(2), Florida Statutes (1995).
Findings Of Fact Petitioner is the agency charged with the duty of licensing and regulating real estate appraisers in the State of Florida. Respondent is and was at all times material hereto a state-certified general real estate appraiser, having been issued License RZ0001233 in accordance with Chapter 475, Part II of the Florida Statutes. Respondent has been appraising real property in the State of Florida since 1985 and has conducted over 5,000 appraisals. During that period of time, Respondent has not been charged with any disciplinary action or proceeding as an appraiser other than with respect to this particular case. Respondent is the sole shareholder of McCall Realty and Investment, Inc. (McCall Realty). Eighty percent of McCall Realty’s business is appraisals, while 20 percent is attributable to real estate sales, rentals and property management. Respondent is the sole appraiser in his office, but does have two trainees. Imposition of a fine or suspension of Respondent’s license would cause a great degree of financial hardship in that the Respondent and McCall Realty would have to file bankruptcy. On or about March 10, 1996, Respondent developed and communicated an appraisal report (Report) for property identified on the cover page as 5600 Bubba Lane, Milton, Florida 32570 (Subject Property) to Ward Brewer. In his Report, Respondent estimated the market value of the subject property as of February 20, 1996, as $1,095,000.00. The Report contained three separate appraisal form reports as follows: (a) an appraisal of parcel 1, an alleged 160-acre vacant land site valued at $800,000 (Appraisal 1); (b) an appraisal of parcel 2, an alleged 7-acre site with a 1,508 square-foot residence valued at $95,000 (Appraisal 2); and an appraisal of parcel 3, an alleged 25-acre vacant land site valued at $200,000 (Appraisal 3) (the Park Property). Each of the form reports indicated that Respondent was appraising a fee simple interest. On November 28, 1995, Ward Brewer called Respondent’s secretary and indicated that he needed Respondent to do an appraisal. Mr. Brewer indicated that the Subject Property was between 159 and 200 acres and owned by J. W. Hawkins. According to Mr. Brewer, there also was an alleged 25-acre park that was owned by J. W. Hawkins but leased to the State of Florida. Shortly after receiving this message from his secretary, Respondent returned Ward Brewer’s call and confirmed that Mr. Brewer wanted Respondent to appraise the property owned by J. W. Hawkins totaling between 159 to 200 acres, as well as an adjacent park owned by J. W. Hawkins and leased to the State of Florida. Also in that conversation, Mr. Brewer indicated he needed this property to be worth $1 million. In making his investigation for the appraisal, Respondent determined that the Park Property was actually owned by the State of Florida. Respondent then called Mr. Brewer and informed him that Mr. Hawkins did not own the Park Property. Mr. Brewer indicated that the owner, Mr. Hawkins, had donated the Park Property to the State, but that Mr. Hawkins was going to get it back through a reversionary interest because he was having problems with the State of Florida. Mr. Brewer then instructed Respondent to appraise the Park Property as if Mr. Hawkins owned the property in fee simple. Respondent also contacted the property owner, Mr. Hawkins, to determine Mr. Hawkins’ understanding of the reversionary interest. Mr. Hawkins confirmed that he was expecting to get the property back from the State through the reversionary interest. Respondent also inquired of the owner, Mr. Hawkins, as to the size of the property, and Mr. Hawkins indicated that it was somewhere between 150 and 200 acres. Respondent walked the Subject Property on two separate occasions. During his physical inspection of the Subject Property, Respondent walked all over the property except for the island portion. He only viewed the island from the shoreline. He then used an aerial photograph to confirm his understanding of the island. Respondent asked Mr. Brewer if he had a survey of the Subject Property. Mr. Brewer indicated that he did not have a survey. Respondent was not aware that Mr. Brewer was in the process of obtaining a survey. In fact, Appraisal 2 in the Report states that no survey was available. Additionally, the Report contains a disclaimer, which states as follows: This appraiser is not qualified to, nor does the appraisal warrant, the following: * * * 6. The actual location of its designated flood hazard or designated area without a current survey. . . . * * * It is recommended that these items and areas be checked by professionals who specialize in these various fields. It is also recommended that any and all reports prepared by others be made available to this appraiser for consideration in the appraisal process. This appraiser reserves a right of review and/or revision subject to any outside reports submitted on the property appraised. Respondent then began the process of compiling comparable sales. After receiving the Report from the Respondent, Mr. Brewer and others obtained title to a portion of the Subject Property. The purchase price for this phase of the purchase was $300,000. Mr. Brewer and his counsel had the Report and a survey before closing on the Subject Property. Neither Mr. Brewer nor his counsel provided the Respondent with a copy of the survey. Thereafter, Mr. Brewer and the other owners decided to finance the purchase of the remaining portion of the Subject Property. The bank requested Mr. R. Shawn Brantley, to prepare an appraisal of a portion of the Subject Property. Mr. Brantley valued a portion of the Subject Property as of May 2, 1997, at $380,000. Thereafter, Mr. Brantley prepared two additional appraisals of the balance of the Subject Property for $69,000 and $70,000, respectively. Accordingly, Mr. Brantley’s appraised value of the Subject Property a little more than a year after the Report was $519,000. Mr. Brewer and others completed the purchase of the remaining property by paying an additional $270,000, for a total of $570,000. Thereafter, Mr. Brewer and others filed a civil lawsuit against Respondent and McCall Realty. In a settlement of the lawsuit, Mr. Brewer and the other owners received a $300,000 settlement. According to Mr. Brewer, one-half of the settlement amount paid attorneys' fees and costs. The other half of the settlement amount was to offset their losses. Because of the disparity in the appraised values, Mr. Brantley’s client, SunTrust Bank, insisted on knowing why there was a difference in the values. Mr. Brantley subsequently prepared a Review Appraisal Report. Respondent asserts that he had developed one prior appraisal involving wetlands or property with similar characteristics. Respondent did not produce this prior appraisal as requested by Petitioner's investigator. As a result of this entire experience, the Respondent has limited his appraisal practice to single-family residential. Respondent identified the Subject Property in the Report by tax identification numbers, metes and bounds descriptions, aerial photographs and a depiction of the property on a zoning map. Tax identification numbers are found in the Report on the tax roll assessment information sheet. With regard to parcel 2, the assessor’s parcel number is identified as 35-2N-28-0000-00500-0000 on the form report itself. On parcels 1 and 3, the property is identified on the first page of each form appraisal by metes and bounds in Section 35, Township North, Range 28 West and by reference to the “attached aerial photograph.” On the aerial photograph, the Respondent wrote in 1, 2 and 3 corresponding to the separate parcel numbers that he was appraising. Additionally, the Report includes a zoning map that identifies the Subject Property with 1, 5, or 5.3, corresponding to the respective tax identification numbers for the three parcels being appraised. The tax roll assessment information sheet in the Report provides a tax identification number of 35-2N-28-0000- 00100-0000 for parcel 1. One can then go to the zoning map, which identifies parcel 1 by a no. 1 on the zoning map. Parcel is also identified in the Report as containing assessor’s parcel no. 35-2N-28-0000-00500-0000. Here again, this property can be seen on the zoning map and is depicted with a number 5. Finally, parcel 3, the Park Property, is identified as being zoned P-2 and then further identified as the property on the zoning map where the zoning is indicated as P-2. Respondent's effort to identify and describe the Subject Property is inadequate in at least two important respects. First, the Report described the property as 192 acres when it is in fact much smaller, approximately 99 acres. Correct acreage is a fundamental way to describe and identify a property. Second, the Report fails to reveal the existence of wetlands, which were readily apparent. The Report states that the alleged 160-acre tract is bordered by the Blackwater River to the East but fails to specify the following: (a) the property contains seven ponds; (b) a bayou intersects the property; and (c) over half of the property is an island surrounded by at least 50 feet of water. When reading the Report, the only way to discern these characteristics is by reference to the Report's attachments. At the very least, Respondent should have made some attempt to describe the portion of the property that is dry upland and the portion that is covered with water. Respondent did not physically walk the entire length of the island. Instead, he viewed the island across the river and then used an aerial photograph to become familiar with the island. The use of aerial photographs in some instances may be a valuable resource where an appraiser finds it impossible to penetrate every square yard of the property. In this case Respondent did not make an effort to gain access to the island or to navigate around it by boat. Mr. Brewer specifically requested that Respondent appraise the Park Property as if J. W. Hawkins owned it in fee simple. Respondent and Mr. Hawkins discussed the donation of the Park Property and the alleged reversionary interest under which Mr. Hawkins expected to get the property back. Respondent's report failed to disclose the basis of his appraisal of the Park Property. The Report did not mention that the State of Florida had any kind of interest in the land. The report did not refer to a lease or a warranty deed with a reversionary interest. In complying with Mr. Brewer's request regarding the estimated market value of the Park Property, Respondent should have made these disclosures. Respondent failed to provide an adequate analysis and overvalued the Subject Property in part because he failed to consider the impact that wetlands would have on the value of the Subject Property. Respondent did not have to be an environmental or ecological expert to know that property covered by so much water would contain wetlands. Respondent’s Report contains a statement of limitations regarding adverse conditions "such as, needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc." This statement does not refer to wetlands. The multi-purpose appraisal addendum for federally regulated transactions contained in the Report, provides as follows: ENVIRONMENTAL DISCLAIMER The value estimated is based on the assumption that the property is not negatively affected by the existence of hazardous substances or detrimental environmental conditions unless otherwise stated in this report. The appraiser is not an expert in the identification of hazardous substances or detrimental environmental conditions. The appraiser’s routine inspection and inquiries about the subject property did not develop any information that indicated any apparent significant hazardous substances or detrimental environmental conditions which would affect the property negatively unless otherwise stated in this report. It is possible that tests and inspections made by a qualified hazardous substance and environmental expert would reveal the existence of hazardous substances or detrimental environmental conditions on or around the property that would negatively affect its value. Considering the general description of the Subject Property, Respondent was remiss in not directly addressing the existence of wetlands in his Report and in not expressly stating his expertise (or lack thereof) in appraising wetland property in his statement of limitations and/or disclaimers. The Petitioner did not present the testimony of an ecological or environmental expert to establish the existence of wetlands on the Subject Property. Instead, Petitioner relied on the testimony of Mr. Brantley, who is an expert in the appraisal of wetland property. In his own appraisal performed on a portion of the Subject Property, Mr. Brantley expressly stated with respect to jurisdictional wetlands that: This appraisal is based upon the special assumption that the appraiser’s estimates regarding this matter, as set forth herein, are correct. The reader is expressly notified that the appraiser does not hold himself out to be an environmental or ecological consultant, nor a surveyor, and the reader is encouraged to employ such experts for further confirmation of the conclusions and estimates rendered herein, if they should so desire or should consider it practical to do so. Mr. Brantley went on to qualify his own appraisal further with the following language: Certain portions of the subject property consist of jurisdictional wetlands, which are subject to the rights exercised by the various environmental agencies and governments. This appraisal is subject to the special assumption that that appraiser’s estimates of the amount of area subject to environmental scrutiny is accurate. The appraiser has based these estimates upon observation of topography and wetlands species upon the property, as well as review of various soil and aerial maps. While, the appraiser is of the opinion that these estimates are reasonably accurate, he can assume no responsibility for variations that may be identified by an environmental audit and survey of lines established by an ecological expert. The reader is encouraged to consult experts in these fields for professional verification of the appraiser’s assumptions. During the hearing, Mr. Brantley admitted that he does not warrant his conclusions and assumptions regarding jurisdictional wetlands as a qualified ecologist or environmentalist. He acknowledged that the Subject Property possibly was only seasonally wet and could appear dry for as much as six months out of the year. However, Mr. Brantley's persuasive testimony leaves no doubt that Respondent should have recognized the existence of wetlands in his report and calculated their impact on the value of the Subject Property. In all three appraisals, Respondent used the sales comparison approach to determine the value of each of the three parcels. In making the comparisons, Respondent asked his administrative assistant to calculate the acreage of the Subject Property using the scale on the aerial photograph. Respondent failed to adequately calculate the area of certain comparable sales used in the Report. For example, Respondent used the wrong acreage for each of the comparable sales used in Appraisal 1, the alleged 160-acre parcel, and one comparable sale used in Appraisal 3, the Park Property. Comparable 1 for the alleged 160-acre parcel should have been closer to 51 acres instead of the 40 acres reported by the Respondent. With regard to comparable no. 2 on the alleged 160-acre parcel the acreage is closer to 38.5 acres instead of the 15 acres reported by Respondent. As for the acreage on comparable no. 3 on the alleged 160-acre parcel, the actual acreage was 551 acres and not the 303 acres reported by the Respondent. As for the acreage for comparable number 1 on parcel 3 (Park Property), the acreage was 20.4 acres rather than the 6 acres reported by the Respondent. Respondent should not have relied on the owner's assertion that the comparable property contained 6 acres when Respondent knew the tax identification card indicated 12.91 acres. Apparently, Respondent did not attempt to confirm either of these numbers by checking the deed, which indicated 20.4 acres. Respondent relied on inaccurate acreage for each comparable referenced above. The discrepancies increased the cost of comparable price per acre. The final result was a highly inflated value for the Subject Property. Respondent appraised the value of the Subject Property as $1,095,000.00 as of February 20, 1996. Petitioner’s expert, Mr. Brantley, in his own appraisal of the Subject Property, a little over a year later, valued the property at $519,000. Respondent's and Mr. Brantley's opinions of value are different. In response to questioning from the Court as to whether the removal of a levee on the Subject Property between the time the Respondent appraised the Subject Property and the time that Mr. Brantley appraised the Subject Property affected the value of the property, Mr. Brantley acknowledged that it would have decreased the value. Mr. Brantley indicated that the effect would be the approximate cost that it would take to bridge that particular area where the levee was removed. Petitioner never provided any evidence as to the exact amount or approximate cost that it would take to bridge that particular area. Accordingly, there is no evidence from which the Court can determine that there is a drastic difference in the reported value opinions. Even so, the foregoing facts are sufficient to determine that Respondent's report was misleading and inaccurate.
Recommendation Based upon the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner enter a final order suspending Respondent's license for one year and imposing an administrative fine in the amount of $3,000. DONE AND ENTERED this 17th day of March, 2004, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD 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 17th day of March, 2004. COPIES FURNISHED: S. L. Smith, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite 802N Orlando, Florida 32801 Robert E. Thielman, Jr., Esquire Baker & Hostetler, LLP Post Office Box 112 Orlando, Florida 32801-0112 Jason Steele, Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Suite 802, North Orlando, Florida 32801 Nancy Campiglia, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
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.
The Issue Whether the Respondent, Omari Murray, committed the violations alleged in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material to the allegations of this case, the Petitioner was the state agency charged with the responsibility to administer and enforce the real estate licensing laws found in Chapter 475, Florida Statutes (2004). At all times material to the allegations of this case, the Respondent was a registered trainee appraiser who was subject to the provisions of Chapter 475, Florida Statutes (2004). As an appraiser trainee, the Respondent was required to perform appraisal services through a fully registered real estate appraiser licensed pursuant to Florida law. On or about December 21, 2002, Ms. Cesar paid the Respondent $550.00 to perform an appraisal for her vacant lot located at 4229 Southwest Jarmer Road, Port St. Lucie, Florida. Ms. Cesar paid the Respondent by check drawn on her personal bank account. The check was payable to the Respondent individually. The check was negotiated and the account was debited in the full amount of the check. At the time she tendered the check to the Respondent Ms. Cesar was under the impression that the Respondent was an appraiser who could lawfully perform the appraisal sought. The Respondent did not advise Ms. Cesar that he was only a trainee appraiser and that his supervisor would have to sign any appraisal report generated in connection with the Cesar property. Additionally, at that time, the Respondent’s supervising appraiser, Harvel Gray, was not aware of the appraisal assignment from Ms. Cesar, did not authorize the Respondent to accept the job, and did not authorize the Respondent to accept payment for the appraisal in his individual name. The funds for the Cesar appraisal were not forwarded to Mr. Gray. When Ms. Cesar asked the Respondent for the appraisal she had paid for, the Respondent told her it was illegal for him to give her a copy of the appraisal. She did not understand why she had paid $550.00 and was not provided with a copy of the appraisal. Ms. Cesar had planned to build a house on the vacant lot. She believed the Respondent could facilitate that project as he represented to her that he could get plans drawn, perform the appraisal, and help her through the entire process. In total Ms. Cesar paid the Respondent over $2000.00 to further the construction of the house. On or about July 7, 2003, an authorized representative of the Department, Jonathan Platt, contacted the Respondent and requested that the Respondent provide a copy of the appraisal performed for Ms. Cesar. On or about August 11, 2003, the Respondent produced a “comparative market analysis” report (the report) dated December 27, 2002, for the subject property (Ms. Cesar’s vacant lot). The report was on a Uniform Residential Appraisal Report form and identified the Respondent as the appraiser. Additionally, the form noted the Respondent’s license number as 0005168. The report did not indicate that the report had been reviewed or approved by a licensed appraiser. The report claimed the analysis was both “as is” and subject to the completion of work as specified in plans and specifications. There were no plans or specifications attached or included with the report. The report was not signed by a licensed real estate appraiser. After review of the report, Mr. Platt asked the Respondent for the work file that supported the appraisal report. Requests for the work file were made on August 12, 2003, September 30, 2003, and October 1, 2003. As of the time of hearing the Respondent had not made such file available to the Department. Harvel Gray is a licensed real estate appraiser. Mr. Gray appraises real estate and equipment and knows the Respondent. Mr. Gray met the Respondent when he applied to become a trainee appraiser about five years ago. For approximately three or four months Mr. Gray was technically the Respondent’s supervisor but performed no appraisals with the Respondent. In fact, Mr. Gray terminated his relationship with the Respondent before any appraisals could be performed. Mr. Gray did not know anything about the appraisal that was to be performed for Ms. Cesar. Ken Drummond is also a licensed real estate appraiser. Mr. Drummond knows the Respondent from a Gold Coast continuing education class. Mr. Drummond has never been the Respondent’s supervising appraiser. Mr. Drummond has not performed appraisals with the Respondent. According to licensing records, the only supervising appraiser with whom the Respondent was listed during the pertinent period of time as an appraiser trainee was Mr. Gray. Neither Gray nor Drummond authorized the Respondent to perform an appraisal or complete the report for Ms. Cesar. Neither Gray nor Drummond authorized the Respondent to accept payment from Ms. Cesar for any work. Jonathan Platt, the investigator assigned to this case, spoke with the Respondent and exchanged written information with him. The Respondent did not provide information requested by Mr. Platt and did not explain how the report was generated. According to Mr. Platt the Respondent maintained that Mr. Drummond was his supervising appraiser during the time the Cesar report was performed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a Final Order that finds the Respondent guilty of the violations outlined by the Administrative Complaint and revokes his license as a real estate appraiser trainee. S DONE AND ENTERED this 30th day of August, 2005, in Tallahassee, Leon County, Florida. ___________________________________ J. D. PARRISH 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 August 2005. COPIES FURNISHED: Elizabeth Vieira, Director Division of Real Estate 400 West Robinson Street Suite 802 North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Alpheus C. Parsons, Esquire Department of Business and Professional Regulation Hurston Building, North Tower, Suite N801 400 West Robinson Street Orlando, Florida 32801 Omari Murray 201 Southwest 11th Avenue Boynton Beach, Florida 33435
Findings Of Fact The Respondent, Leonard Fernandez, is a licensed real estate salesman, holding license number 0145203. In July and August of 1979, the Respondent was employed as a mortgage solicitor for Southeast Mortgage Company in Broward County, Florida. Alan Edwards was the Respondent's supervisor during this time period. In July, 1979, the Respondent advised Alan Edwards that he was going to purchase property, and requested that Mr. Edwards loan him money for a short period of time. Mr. Edwards loaned the Respondent $4,000 under a verbal agreement that the Respondent would repay the loan within 60 days. When the Respondent failed to repay this loan as agreed, Mr. Edwards had the Respondent sign a promissory note in the amount of $4,000. In an attempt to repay a portion of this note, the Respondent gave Mr. Edwards a check in the amount of $1,800 on or about August 29, 1979. Mr. Edwards presented the check for payment, but it was returned unpaid because the Respondent had stopped payment on it. When Mr. Edwards contacted the Respondent about the check, the Respondent stated that he had expected some funds from a relative, and when he did not receive this money, he stopped payment on the check. The Respondent told Mr. Edwards that he would give him a cashier's check to replace the $1,800 check that had been returned unpaid, but the Respondent never provided the cashier's check. Instead, the Respondent, in September, 1979, gave Mr. Edwards several postdated checks drawn on account number 002312352 at Southeast Bank of Broward County. The purpose of these checks was to repay, the $1,800, after which the Respondent was to pay the remaining debt due under the note. In November, 1979, Mr. Edwards presented the first of the postdated checks, dated November 15, 1979, to Southeast Bank for payment, but was notified that the Respondent's account upon which all the postdated checks had been issued, was closed. When the bank failed to honor this first check, Mr. Edwards sent a notice of dishonored check to the Respondent by certified mail. The return receipt indicates that the Respondent received this notice. In December, 1979, and in January and February of 1980, Mr. Edwards presented to Southeast Bank the postdated checks that Respondent had given him for these months. On each occasion the bank informed Mr. Edwards that the Respondent's account was closed. Mr. Edwards sent the Respondent notices of dishonor of these checks, which the Respondent received. Mr. Edwards never received any payment of the debt owed by the Respondent. On January 7, 1980, in Dade County Circuit Court, the Respondent pled nolo contendere to two counts of conspiracy to sell, deliver or possess with intent to sell or deliver, cocaine, and was found guilty, placed on one year probation, and ordered to pay $2,400 in restitution. On February 29, 1980, the court withheld adjudication on this charge.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that license number 0145203 held by the Respondent, Leonard Fernandez, be revoked. DONE and RECOMMENDED this 9th day of June, 1983 in Tallahassee, Florida. WILLIAM B. THOMAS Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1983. COPIES FURNISHED: Tina Hipple, Esquire Post Office Box 1900 Orlando, Florida 32802 Mr. Leonard Fernandez 10024 S.W. 2nd Terrace Miami, Florida 33174 William M. Furlow, Esquire Post Office Box 1900 Orlando, Florida 32802 Harold Huff, Executive Dir. Florida Real Estate Commission Post Office Box 1900 Orlando, Florida 32802
The Issue Whether respondent violated sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes, by the manner in which she handled the real estate transaction involving the property located at 29 S. Lawsona.
Findings Of Fact Respondent is a licensed real estate salesman and was a licensed real estate salesman at all times relevant to the instant charges. In September 1983, respondent was registered as a real estate salesman with 100 percent Real Estate Incorporated. Robert Sinclair was the qualifying broker for 100 percent Real Estate Incorporated. On or about September 29, 1983, respondent obtained an Offer of Purchase on a home located at 29 S. Lawsona from Linda O'Leary and James T. Bagley along with a check from James T. Bagley in the amount of $500 as earnest money. The resulting contract was entered into evidence as Petitioner's Exhibit 1. On the day the purchasers signed the contract, but after they had signed the contract, the purchasers visited the home and discovered that there appeared to be extensive termite damage. Mr. Bagley was concerned about the termite damage, as was the respondent, and therefore the respondent promised Mr. Bagley that she would hold his check until she could get the termite estimate from Mr. Babcock and check with the termite company to find out how bad the damage was. Although the respondent was able to obtain the termite estimate from Mr. Babcock's office the following day, she was unable to contact the person who had conducted the termite inspection. She also was unable to contact the purchasers. She was unable to contact Mr. Bagley for approximately a week and it was another week before Mr. Bagley went to the house with a contractor to determine how much it would cost to repair the termite damage. The contractor thought that the minimum cost would be $10,000. At that point Mr. Bagley decided that he was no longer interested in the house, and the respondent returned his check. The $500 check was never turned over to Robert Sinclair or 100 percent Realty. Respondent knew she should not have held the check and was aware that by doing so she was, as she stated, "in hot water." However, respondent also believed that the seller had misrepresented the extent of the termite damage and was misinterpreting the terms of the contract. Mr. Sinclair was unaware of the existence of the contract until the end of October, although he had a discussion earlier with the respondent regarding whether an "as is" clause in a contract could override the specific printed provision of the standard contract related to termite infestation. That discussion was obviously related to the contract on the house on Lawsona.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order finding that the respondent is guilty of violating sections 475.25(1)(b) and 475.25(1)(k), Florida Statutes, and suspending respondent's license for a period of three (3) months. DONE and ENTERED this 1st day of May, 1985, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS 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 1st day of May, 1985. COPIES FURNISHED: Harold Huff, Executive Director Department of Professional Regulation P. O. Box 1900 Orlando, Florida 32802 Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Fred Langford, Esquire Department of Professional Regulation Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 Ms. Anne Rockafield 713 Woodward Orlando, Florida 32803 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact Ciccarelli and Moreau are registrants with the Florida Real Estate Commission (Board of Real Estate), both holding registrations as saleswomen. Ciccarelli and Moreau were the real estate salespersons who handled the transaction for the sale of a residence between Dessie Wilson, the seller, and Carl Dudley, the buyer. Darlene Becker, Wilson's daughter, also owned an interest in the property but was not an actual party to the negotiations between Wilson and Dudley as mediated by Ciccarelli and Moreau. Ciccarelli and Moreau presented to Wilson the contract for sale and purchase containing Dudley's initial offer signed July 13, 1978. A copy of this contract was introduced as Exhibit 7. Wilson made a counter offer by interlineating and initialing certain terms in the contract on July 14, 1978, as indicated by her signature and date on Exhibit 2. Dudley had returned to Fort Myers, Florida, where he was living, and Ciccarelli and Moreau communicated Wilson's counter offer to him by telephone July 18, 1978. Dudley made a counter-counter offer in which he accepted the cash terms proposed by Wilson but included the cement table and benches described in Paragraph 1(c) of the contract in the purchase. The table and benches had been stricken and initialed by Wilson in her offer. Ciccarelli and Moreau annotated the contract to reflect the inclusion of these items in the sale by adding "OK for cement table and benches" to Paragraph 1(c). This contract was not initialed by Dudley before presentation to Wilson because Dudley was in Fort Myers. See Exhibit 9. Ciccarelli and Moreau presented the contract, Exhibit 9, to Wilson, who accepted the terms orally. Ciccarelli and Moreau then sent the contract to Dudley by the letter dated July 18, 1978, Exhibit 4. This letter advised Dudley to initial the contract's changes to include the cement table and benches. Dudley did so and returned the contract to Ciccarelli and Moreau, who then presented the contract to Wilson's daughter, Darlene Becker. Becker executed the contract, Exhibit 9, after it was returned. The transaction closed afterward, and a conveyance of the property and payment were exchanged. The closing was attended by Dudley and Wilson, and no objection to the terms of the contract was raised by either party. After closing a controversy arose between Wilson and Dudley concerning the transfer of the cement table and benches. Wilson returned to Dudley the table and benches which she had removed. Paragraph X of the general provisions of the contract provides that the buyer may request personal property be conveyed by absolute bill of sale.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that no action be taken against the licenses of Ciccarelli and Moreau. DONE and ORDERED this 17th day of March, 1980, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings Room 1001, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of March, 1980. COPIES FURNISHED: John Huskins, Esquire Department of Professional Regulation 2009 Apalachee Parkway Tallahassee, Florida 32301 Harvey R. Klein, Esquire 333 North West Third Avenue Ocala, Florida 32670
