Findings Of Fact Respondent is duly registered as a real estate salesman and as a broker by Florida Real Estate Commission. On his application for registration as a salesman, in answer to question 9 on the application as to whether he had ever been arrested for, or charged with, the commission of an offense against the laws of any municipality, state or nation, he answered "yes" and completed the "If yes, state details in full" part of the question with "traffic citation (speeding) 1970." On his application for registration as a broker some 16 months later he answered Question 9 "no". Exhibit 2, a certified copy of the court of record of Broward County, shows that on April 28, 1970, Respondent pleaded nolo contendere to the offense of attempted bookmaking and was fined $50. When questioned by the investigator for the Florida Real Estate Commission prior to the filing of this information, Respondent admitted that he had been arrested in California in 1960 and 1961 on charges of suspicion of assault and a traffic offense involving driving while under the influence of intoxicants. Testifying in his own behalf Respondent acknowledged that he had inadvertently failed to include those arrests on his application, and that in so doing he had no intention to conceal those arrests. The arrests for suspicion of assault involved a marital dispute with his former wife and those charges were dismissed. On the DWI charge he was fined $150. The breathalizer test he had taken was borderline and he was advised by the Public Defender that if he pleaded guilty he would be fined $150 as a first offender and if he employed the services of a lawyer to contest the charge the attorney's fee would be at least $250. He pleaded guilty to the charge. The attempted bookmaking arrest occurred while he was working in a bar in Deerfield Beach. The police suspected this bar was involved in bookmaking. Fetters had worked there only a week or two when two undercover agents, who had patronized the bar on a daily basis for several days, asked him to place a bet for them. He told them he had no information on how to place a bet, but after they insisted he took their money and made a call to someone he knew in Miami. The undercover agents then identified themselves and arrested him. Respondent holds a Cosmetology license in California, and an insurance salesman's license. He is currently working for Nichols' Realty in Boca Raton. His broker, Roy Nichols, has known Respondent for about three years and Respondent's reputation in the community is excellent. He has found Respondent's conduct exemplary both as a real estate salesman and as a family man.
The Issue In this disciplinary proceeding, the issues are, first, whether Respondent, a certified real estate appraiser, committed various disciplinable offenses in connection with three residential appraisals; and second, if Respondent is guilty of any charges, whether she should be punished therefor.
Findings Of Fact The Florida Real Estate Appraisal Board ("Board") is the state agency charged with regulating real estate appraisers who are, or want to become, licensed to render appraisal services in the State of Florida. The Department of Business and Professional Regulation ("Department") is the state agency responsible for investigating and prosecuting complaints against such appraisers. At all times relevant to this proceeding, Elsa Cartaya ("Cartaya") was a Florida-certified residential real estate appraiser. Her conduct as an appraiser in connection with the matters presently at issue falls squarely within the Board's regulatory jurisdiction. Case No. 04-1680 In the Administrative Complaint that initiated DOAH Case No. 04-1680, the Department charged Cartaya with numerous statutory violations relating to her appraisal of a residence located at 930 East Ninth Place, Hialeah, Florida (the "Hialeah Property"). Specifically, the Department made the following allegations against Cartaya:1 Respondent developed and communicated an appraisal report (Report) for the property commonly known as 930 E. 9 Place, Hialeah, Florida 33010. A copy of the report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. On the Report, Respondent represents that: she signed it on July 27, 2000, the Report is effective as of July 27, 2000. On or about October 26, 2001, Respondent provided a "Report History" to Petitioner's investigator. A copy of the report history is attached hereto and incorporated herein as Administrative Complaint Exhibit 2. On the Report History, Respondent admits that she completed the report on August 7, 2000. On Report, Respondent represents that there were no prior sales of subject property within one year of the appraisal. Respondent knew that a purchase and sale transaction on subject property closed on July 28, 2000. Respondent knew that the July 28, 2000, transaction had a contract sales price of $82,000. A copy of the closing statement is attached hereto as Administrative Complaint Exhibit 3. Respondent knowingly refused to disclose the July 28, 2000, sale on Report. On [the] Report, Respondent represented that the current owner of subject property was Hornedo Lopez. Hornedo Lopez did not become the title- owner until on or about July 28, 2000, but before August 7, 2000. On [the] Report, Respondent represents that quality of construction of subject property is "CBS/AVG." The public records reflect that subject property is of mixed construction, CBS and poured concrete. On [the] Report, Respondent represents: "The income approach was not derived due to lack of accurately verifiable data for the mostly owner occupied area." The multiple listing brochures indicate as follows: for comparable one: "Main House 3/2 one apartment 1/1 (Rents $425) and 2 efficiencies each at $325. Live rent free with great income or bring your big family." A copy of the brochure for comparable one is attached hereto and incorporated herein as Administrative Complaint Exhibit 4. for comparable three: "Great Rental . . . two 2/1 two 1/1 and one studio. Total rental income is $2,225/month if all rented." A copy of the brochure for comparable three is attached and incorporated as Administrative Complaint Exhibit 5. On or about October 23, 2001, Petitioner's investigator inspected Respondent's work file for Report. The investigation revealed that Respondent failed to maintain a true copy of Report in the work file. On [the] Report, Respondent failed to analyze the difference between comparable one's listing price, $145,000, and the sale price, $180.000. On [the] Report History, Respondent admits to having received a request for appraisal of subject property indicting a contract price of $195,000. On [the] Report History, Respondent admits that the multiple listing brochure for subject property listed the property for $119,900, as a FANNIE MAE foreclosure. On [the] Report History, Respondent also admits that she had a multiple listing brochure in the file, listing subject property for $92,000. On [the] Report History, Respondent admits that she did not report the listings in Report. On [the] Report History, Respondent admits knowledge that comparable three was "rebuilt as a 2/1 with two 1/1 & 1 studio receiving income although zoned residential." On [the] Report, Respondent failed or refused to explain or adjust for comparable three's zoning violations. On the foregoing allegations, the Department charged Cartaya under four counts, as follows: COUNT I Based upon the foregoing, Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest conduct, culpable negligence, or breach of trust in any business transaction in violation of Section 475.624(2), Florida Statutes.[2] COUNT II Based upon the foregoing, Respondent is guilty of having failed to use reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT III Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice in violation of Section 475.624(14), Florida Statutes. COUNT IV Based upon the foregoing, Respondent is guilty of having accepted an appraisal assignment if the employment itself is contingent upon the appraiser reporting a predetermined result, analysis, or opinion, or if the fee to be paid for the performance of the appraisal assignment is contingent upon the opinion, conclusion, or valuation reached upon the consequent resulting from the appraisal assignment in violation of Section 475.624(17), Florida Statutes.[3] In her Answer and Affirmative Defenses, Cartaya admitted the allegations set forth in paragraphs 5-9, 11, 13-15, 17-19, and 23-25 of the Amended Complaint. Based on Cartaya's admissions, the undersigned finds these undisputed allegations to be true. Additional findings are necessary, however, to make sense of these particular admissions and to determine whether Cartaya committed the offenses of which she stands accused. In April 2000, Southeast Financial Corporation ("Southeast") asked Cartaya to prepare an appraisal of the Hialeah Property for Southeast's use in underwriting a mortgage loan, the proceeds of which would be applied by the prospective mortgagor(s) towards the $205,000 purchase price that he/she/they had agreed to pay Hornedo Lopez ("Hornedo") for the residence in question.4 In preparing the appraisal, Cartaya discovered that the putative seller, Hornedo, was actually not the record owner of the Hialeah Property. Rather, title was held in the name of the Federal National Mortgage Association ("Fannie Mae"). The Hialeah Property was "in foreclosure." Cartaya informed her contact at Southeast, Marianella Lopez ("Marianella"), about this problem. Marianella explained that Hornedo was in the process of closing a sale with Fannie Mae and would resell the Hialeah Property to a new buyer soon after acquiring the deed thereto. Cartaya told Marianella that, to complete the appraisal, she (Cartaya) would need to be provided a copy of the closing statement documenting the transfer of title from Fannie Mae to Hornedo. No further work was done on the appraisal for several months. Then, on July 25, 2000, Marianella ordered another appraisal of the Hialeah Property, this time for Southeast's use in evaluating a mortgage loan to Jose Granados ("Granados"), who was under contract to purchase the subject residence from Hornedo for $195,000. Once again, Cartaya quickly discovered that Fannie Mae, not Hornedo, was the record owner of the Hialeah Property. Once again, Cartaya immediately informed Marianella about the situation. Marianella responded on July 26, 2000, telling Cartaya that the Fannie Mae-Hornedo transaction was scheduled to close on July 28, 2000. On July 27, 2000, Marianella faxed to Cartaya a copy of the Settlement Statement that had been prepared for the Fannie Mae sale to Hornedo. The Settlement Statement, which confirmed that the intended closing date was indeed July 28, 2000, showed that Hornedo was under contract to pay $82,000 for the Hialeah Property——the property which he would then sell to Granados for $195,000, if all the pending transactions closed as planned. Upon receipt of this Settlement Statement, Cartaya proceeded to complete the appraisal. In the resulting Appraisal Report, which was finished on August 7, 2000,5 Cartaya estimated that the market value of the Hialeah Property, as of July 27, 2000, was $195,000. The Department failed to prove by clear and convincing evidence that the house at the Hialeah Property was, in fact, constructed from CBS and poured concrete, as alleged.6 At the time Cartaya gave the Department a copy of her workfile for this appraisal assignment, the workfile did not contain a copy of the competed Appraisal Report.7 (The workfile did, however, include a working draft of the Appraisal Report.) The allegation, set forth in paragraph 21 of the Administrative Complaint, that Cartaya "failed to analyze the difference between comparable one's listing price, $145,000, and the sale price, $180,000," was not proved by clear and convincing evidence. First, there is no nonhearsay evidence in the record that "comparable one" was, in fact, listed at $145,000 and subsequently sold for $180,000. Instead, the Department offered a printout of data from the Multiple Listing Service ("MLS"), which printout was included in Cartaya's workfile. The MLS document shows a listing price of $145,550 for "comparable one" and a sales price of $180,000 for the property——but it is clearly hearsay as proof of these matters,8 and no predicate was laid for the introduction of such hearsay pursuant to a recognized exception to the hearsay rule (including Section 475.28(2)). Further, the MLS data do not supplement or explain other nonhearsay evidence.9 At best, the MLS document, which is dated July 25, 2000, establishes that Cartaya was on notice that "comparable one" might have sold for more than the asking price, but Cartaya has not been charged with overlooking MLS data. Second, in any event, in her Report History, Cartaya stated that she had analyzed the putative asking price/sales price differential with respect to "comparable one" and concluded that there was no need to make adjustments for this because available data relating to other sales persuaded her that such differentials were typical in the relevant market. Cartaya's declaration in this regard was not persuasively rebutted. Since the evidence fails persuasively to establish that Cartaya's conclusion concerning the immateriality of the putative asking price/sales price differential as a factor bearing on the value of "comparable one" was wrong; and, further, because the record lacks clear and convincing evidence that an appraiser must, in her appraisal report, not only disclose such information, even when deemed irrelevant to the appraisal, but also expound upon the grounds for rejecting the data as irrelevant, Cartaya cannot be faulted for declining to explicate her analysis of the supposed price differential in the Appraisal Report. The evidence is insufficient to prove, clearly and convincingly, that Cartaya "failed or refused to explain or adjust for "comparable three"'s zoning violations." This allegation depends upon the validity of its embedded assumption that there were, in fact, "zoning violations."10 There is, however, no convincing evidence of such violations in the instant record. Specifically, no copy of any zoning code was offered as evidence, nor was any convincing nonhearsay proof regarding the factual condition of "comparable three" offered. Cartaya cannot be found guilty of failing or refusing to explain or adjust for an underlying condition (here, alleged "zoning violations") absent convincing proof of the underlying condition's existence-in-fact. Case No. 04-1148 In the Administrative Complaint that initiated DOAH Case No. 04-1148, the Department charged Cartaya with numerous statutory violations relating to her appraisals of residences located at 1729 Northwest 18th Street, Miami, Florida ("1729 NW 18th St") and 18032 Northwest 48th Place, Miami, Florida ("18032 NW 48th Place"). These appraisals will be examined in turn. With regard to 1729 NW 18th St, the Department alleged as follows: On or about April 29, 1999, Respondent developed and communicated a Uniform Residential Appraisal Report for the property commonly known as 1729 NW 18th Street, Miami, Florida. A copy of the report is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. On or about March 18, 2001, David B. C. Yeomans, Jr., A.S.A., and Mark A. Cannon, A.S.A., performed a field review of the report. A copy of the review is attached hereto and incorporated herein as Administrative Complaint Exhibit 2. The review revealed that unlike it states in the Report, the subject property’s zoning was not "Legal," but "legal noncomforming (Grandfathered use)." The review further revealed that Respondent failed to report that if the improvements sustain extensive damage or demolishment or require renovation which exceeds 50% of the depreciated value, it is likely that a variance would be necessary to build a new dwelling. The review further revealed that Respondent failed to report that subject property has two underground gas meters. The review further revealed that unlike Respondent states in Report, subject property’s street has gutters and storm sewers along it. The review further revealed that subject property is a part of a "sub-market" within its own neighborhood due to its construction date of 1925. Respondent applied three comparables built in 1951, 1953, and 1948, respectively, all of which reflect a different market, without adjustment. Respondent applied comparables which have much larger lots than the subject, which is of a non-conforming, grandfathered use. Respondent failed to adjust for quality of construction even though subject is frame and all three comparables are of concrete block stucco construction. Respondent failed to note on the Report that comparables 1 and 2 had river frontage. Respondent failed to adjust comparables 1 and 2 for river frontage. The review revealed that at the time of the Report there were at least five sales more closely comparable to Subject than those which Respondent applied. On the foregoing allegations, the Department brought the following three counts against Cartaya: COUNT I Based upon the foregoing, Respondent is guilty of having failed to use reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT II Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice in violation of Section 475.624(14), Florida Statutes. COUNT III Based upon the foregoing, Respondent is guilty of culpable negligence in a business transaction in violation of Section 475.624(2), Florida Statutes. Cartaya admitted the allegations set forth in paragraph 4 of the Administrative Complaint. Those undisputed allegations, accordingly, are accepted as true. The rest of the allegations about this property were based upon a Residential Appraisal Field Review Report (the "Yeomans Report") that David B.C. Yeomans, Jr. prepared in March 2001 for his client Fannie Mae. The Yeomans Report is in evidence as Petitioner's Exhibit 2, and Mr. Yeomans testified at hearing. Mr. Yeomans disagreed with Cartaya's opinion of value regarding 1729 NW 18th St, concluding that the property's market value as of April 29, 1999, had been at the low end of the $95,000-to-$115,000 range, and not $135,000 as Cartaya had opined. The fact-findings that follow are organized according to the numbered paragraphs of the Administrative Complaint. Paragraphs 6 and 7. The form that Cartaya used for her Appraisal Report regarding 1729 NW 18th St contains the following line: Zoning compliance Legal Legal nonconforming (Grandfathered use) Illegal No zoning Cartaya checked the "legal" box. Mr. Yeomans maintains that she should have checked the box for "legal nonconforming" use because, he argues, the property's frontage and lot size are smaller than the minimums for these values as prescribed in the City of Miami's zoning code. The Department failed, however, to prove that Cartaya checked the wrong zoning compliance box. There is no convincing nonhearsay evidence regarding either the frontage or the lot size of 1729 NW 18th St.11 Thus, there are no facts against which to apply the allegedly applicable zoning code provisions. Moreover, and more important, the Department failed to introduce into evidence any provisions of Miami's zoning code. Instead, the Department elicited testimony from Mr. Yeomans regarding his understanding of the contents of the zoning code. While Mr. Yeomans' testimony about the contents of the zoning code is technically not hearsay (because the out-of-court statements, namely the purported code provisions, consisted of non-assertive declarations12 that were not offered for the "truth" of the code's provisions13), such testimony is nevertheless not clear and convincing evidence of the zoning code's terms.14 And finally, in any event, Cartaya's alleged "mistake" (which allegation was not proved) was immaterial because, as Mr. Yeomans conceded at hearing, in testimony the undersigned credits as true, the alleged "fact" (again, not proved) that 1729 NW 18th St constituted a grandfathered use would have no effect on the property's market value. Paragraphs 8 and 9. The Yeomans Report asserts that "[b]ased on a physical inspection as of March 17, 2001[,] it appears that the site has two underground gas meters and there were gutters and storm sewers along the subject's street." It is undisputed that Cartaya's Appraisal Report made no mention of underground gas meters or storm water disposal systems. While the Department alleged that Cartaya's silence regarding these matters constituted disciplinable "failures," it offered no convincing proof that Cartaya defaulted on her obligations in any way respecting these items. There was no convincing evidence that these matters were material, affected the property's value, or should have been noted pursuant to some cognizable standard of care. Paragraphs 10 and 11. The contention here is that Cartaya chose as comparables several homes that, though relatively old (average age: 48 years), were not as old as the residence at 1729 NW 18th St (74 years). Mr. Yeomans asserted that older homes should have been used as comparables, and several such homes are identified in the Yeomans Report. The undersigned is persuaded that Mr. Yeomans' opinion of value with respect to 1729 NW 18th St is probably more accurate than Cartaya's. If this were a case where the value of 1729 NW 18th St were at issue, e.g. a taking under eminent domain, then Mr. Yeomans' opinion might well be credited as against Cartaya's opinion in making the ultimate factual determination. The issue in this case is not the value of 1729 NW 18th St, however, but whether Cartaya committed disciplinable offenses in appraising the property. The fact that two appraisers have different opinions regarding the market value of a property does not mean that one of them engaged in misconduct in forming his or her opinion. Based on the evidence presented, the undersigned is not convinced that Cartaya engaged in wrongdoing in connection with her appraisal of 1729 NW 18th St, even if her analysis appears to be somewhat less sophisticated than Mr. Yeomans'. Paragraphs 12 through 16. The allegations in these paragraphs constitute variations on the theme just addressed, namely that, for one reason or another, Cartaya chose inappropriate comparables. For the same reasons given in the preceding discussion, the undersigned is not convinced, based on the evidence presented, that Cartaya engaged in wrongdoing in connection with her appraisal of 1729 NW 18th St, even if he is inclined to agree that Mr. Yeomans' opinion of value is the better founded of the two. With regard to 18032 NW 48th Place, the Department alleged as follows: On or about August 9, 1999, Respondent prepared and communicated a Uniform Residential Appraisal Report for the Property commonly known as 18032 NW 48th Place, Miami, Florida, 33055. (Report) A copy of the Report is attached hereto and incorporated herein as Administrative Complaint Exhibit 3. On the Report, Respondent incorrectly stated that the property is in a FEMA Zone X flood area. In fact, the property is in an AE Zone. In Report, Respondent states: "Above sales were approximately adjusted per market derived value influencing dissimilarities as noted." Respondent failed to state in Report, that comparables 1 and 3 have in-law quarters. In [the] Report, Respondent represented comparable 1 had one bath, where in fact it has at least two. In [the] Report, Respondent failed to state that comparable 1 has two in-law quarters. In [the] Report, Respondent stated that comparable 3 is a two-bath house with an additional bath in the in-law quarters. On the foregoing allegations, the Department brought the following three counts against Cartaya: COUNT IV Based upon the foregoing, Respondent has violated a standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice in violation of Section 475.624(14), Florida Statutes. COUNT V Based upon the foregoing, Respondent is guilty of having failed to use reasonable diligence in developing an appraisal report in violation of Section 475.624(15), Florida Statutes. COUNT VI Based upon the foregoing, Respondent is guilty of culpable negligence in a business transaction in violation of Section 475.624(2), Florida Statutes. Cartaya admitted the allegations set forth in paragraphs 18 and 20 of the Administrative Complaint. Those undisputed allegations, accordingly, are accepted as true. The rest of the allegations about this property were based upon a Residential Appraisal Field Review Report (the "Marmin Report") that Frank L. Marmin prepared in May 2001 for his client Fannie Mae. The Marmin Report is in evidence as Petitioner's Exhibit 5. Mr. Marmin did not testify at hearing, although his supervisor, Mark A. Cannon, did. Mr. Marmin disagreed with Cartaya's opinion of value regarding 18032 NW 48th Place, concluding that the property's market value as of August 9, 1999, had been $100,000, and not $128,000 as Cartaya had opined. The fact-findings that follow are organized according to the numbered paragraphs of the Administrative Complaint. Paragraph 19. Cartaya admitted that she erred in noting that the property is located in FEMA Flood Zone "X," when in fact (she agrees) the property is in FEMA Flood Zone "AE." She did, however, include a flood zone map with her appraisal that showed the correct flood zone designation. Cartaya's mistake was obviously unintentional——and no more blameworthy than a typographical error. Further, even the Department's expert witness conceded that this minor error had no effect on the appraiser's opinion of value. Paragraphs 20 through 24. The Department asserts that two of Cartaya's comparables were not comparable for one reason or another. The Department failed clearly and convincingly to prove that its allegations of fact concerning the two comparables in question are true. Thus, the Department failed to establish its allegations to the requisite degree of certainty. Ultimate Factual Determinations Having examined the entire record; weighed, interpreted, and judged the credibility of the evidence; drawn (or refused to draw) permissible factual inferences; resolved conflicting accounts of what occurred; and applied the applicable law to the facts, it is determined that: Applying the law governing violations arising under Section 475.624(2), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that Cartaya did not commit culpable negligence in connection with the appraisals at issue. Applying the law governing violations arising under Section 475.624(15), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that Cartaya did not fail to exercise reasonable diligence in developing the appraisals at issue. Applying the law governing violations arising under Section 475.624(14), Florida Statutes, to the historical facts established in the record by clear and convincing evidence, it is found as a matter of ultimate fact that, in connection with the Appraisal Report relating to the Hialeah Property, Cartaya did commit one unintentional violation of Standards Rule 2- 2(b)(vi) of Uniform Standards of Professional Appraisal Practice and two unintentional violations of Standards Rule 2-2(b)(ix).
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board enter a final order finding that: As to Case No. 04-1148, Cartaya is not guilty on Counts I through VI, inclusive; As to Case No. 04-1680, Cartaya is not guilty on Counts I, II, and IV; she is, however, guilty, under Count III, of one unintentional violation of Standards Rule 2-2(b)(vi) and two unintentional violations of Standards Rule 2-2(b)(ix). As punishment for the violations established, Cartaya's certificate should be suspended for 30 calendar days, and she should be placed on probation for a period of one year, a condition of such probation being the successful completion of a continuing education course in USPAP. In addition, Cartaya should be ordered to pay an administrative fine of $500. DONE AND ENTERED this 10th day of November, 2004, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 2004.
The Issue Whether Respondent's License No. 0003558 as a real estate salesman should be suspended, revoked, or the licensee otherwise disciplined for violation of Section 475.25(1)(e), Florida Statutes. Petitioner served a copy of its Administrative Complaint, Explanation of Rights, and Election of Rights upon the Respondent at the last address he had registered with the Commission, i.e., 6800 W. 16th Avenue, Hialeah, Florida 33014, by registered mail on July 31, 1975. Respondent executed the "Election of Rights" form in which he requested a hearing, on August 19, 1975, and returned it to Petitioner. On December 5, 1975, Petitioner mailed a copy of Notice of Hearing to the Respondent by registered mail to the same address. It was returned by the U. S. Post Office to Petitioner with the notation "Moved, Left No Address" (Exhibit 1). Accordingly, it was considered that Petitioner had complied with applicable requirements concerning notice and, the Respondent not being present at the time of hearing, the hearing was conducted as an uncontested proceeding.
Findings Of Fact Respondent received his registration as a real estate salesman on June 18, 1973, and has been continuously registered with Petitioner since that date (Exhibit 2). An Information filed by the State Attorney of the Eleventh Judicial Circuit of Florida, Number 73-3060, charged Respondent with nine counts of violating Section 832.05(3), Florida Statutes, by nine worthless checks in the amount of $50.00 each which were unlawfully drawn, made, uttered, issued or delivered to Winn Dixie Stores, Inc., during the period December 27, 1972 to January 8, 1973. A similar Information, Number 73-2663, was filed with respect to four checks to the Grand Union Company during the period October 18, 1972 through October 24, 1972 in the same amounts (Exhibits 3, 5). On September 13, 1973, Respondent pleaded guilty to the charges filed against him in the Circuit Court of the Eleventh Judicial Circuit of Florida, in and for Dade County, and an Order Withholding Adjudication was issued in Case No. 73-3060, finding the Respondent guilty based upon the entry of a guilty plea to the charge of unlawfully obtaining services, goods, wares, or other things of value by means of a worthless check or draft in the amount of $50.00 (nine counts) and withholding adjudication of guilt. On the same date, the same court issued another Order Withholding Adjudication of guilt in Case No. 73-2663 for the four fifty dollar checks involved therein (ExhibitS 4, 6).
Recommendation That the registration of Leonard H. Balkan as a real estate salesman be suspended for a period of two years. DONE and ENTERED this 3rd day of February, 1976, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Leonard H. Balkan Louis B. Guttmann, III, Esquire 6800 West 16th Avenue 2699 Lee Road Hialeah, Florida 33014 Winter Park, Florida
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 to be determined are whether Respondents violated the provisions of Section 475.624, Florida Statutes (2007), and Florida Administrative Code Rule 61J1-7.001, as charged in the Administrative Complaints, and if so, what penalty should be imposed?
Findings Of Fact Petitioner is the state agency charged with the licensing and regulation of real estate appraisers pursuant to Section 20.165 and Chapters 455 and 475, Part II, Florida Statutes (2009). Respondent, Fred Catchpole, is a licensed real estate appraiser, having been issued license number RD-7674. Respondent, William E. Woods, is a registered trainee appraiser, issued license RI-4855. At the times relevant to these complaints, Mr. Woods was supervised by Respondent Catchpole. On October 8, 2009, the Department issued Administrative Complaints against both Respondents. At the heart of both Administrative Complaints were allegations related to an appraisal report allegedly prepared by Catchpole and Woods. With the exception of the order in which Respondents are identified, the allegations in paragraphs four and six of the Administrative Complaints are identical. Quoting from the Administrative Complaint in Case No. 09-6822 (DBPR Case No. 2009016581), the Administrative Complaint alleges the following: On or about September 25, 2007, Fred Catchpole (Respondent) and William Woods developed and communicated an appraisal report (Report 1) for property commonly known as 2250 Braxton Street, The Villages, Florida 32162 (Subject Property), and estimated its value at $190,000.00. A copy of Report I is attached hereto and incorporated herein as Administrative Complaint Exhibit 1. * * * 6. Respondent made the following errors and omissions in Report 1: Incorrect effective on the cover of the report, the correct date is September 25, 2007; Incorrect effective date on in the Reconciliation section of the report; Incorrect effective date on the signature page of the Report; Incorrect Subject Property Inspection date on the signature page of the Report; Incorrect Comparable Sales inspection date on the signature page of the report; . . . . The Amended Administrative Complaint alleges the same facts, with the same dates. At hearing, it was established that there is no appraisal report developed or communicated that is dated September 25, 2007. The Report, attached to each Administrative Complaint and each Amended Administrative Complaint, is actually dated February 25, 2007. Once it was established that there was no appraisal report matching the dates alleged in the Administrative Complaint, the Department moved to dismiss the Amended Administrative Complaints in their entirety, with prejudice.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the Florida Real Estate Appraiser's Board enter Final Orders with respect to each Respondent dismissing the Amended Administrative Complaints in their entirety. DONE AND ENTERED this 27th day of April, 2010, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 27th day of April, 2010. COPIES FURNISHED: Robert Minarcin, Esquire Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801-1757 Fred Catchpole 5449 Marcia Circle Jacksonville, Florida 32210 William Woods 2103 Herndon Street Dover, Florida 33527 Reginald Dixon, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Thomas W. O'Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street, Suite N801 Orlando, Florida 32801-1757
Findings Of Fact Louis W. George has been registered as a real estate broker in Florida for seven years; he holds license No. 0030981. At all pertinent times, he has done business as Apollo Realty of Miami, and has been, in addition, co-owner with Allen Scherer of Karma Properties, Inc. In an effort to sell a house he owned at 1105 Sharazad Boulevard in Opa locka, Florida, John F. German placed a classified advertisement in a newspaper. Seeing the ad, respondent George telephoned Mr. German and offered his services as a real estate broker. As a result, Mr. German eventually signed an agreement listing the house with Apollo Realty of Miami for 90 days, which elapsed without a sale, in late 1978 or early 1979. In June of 1979, Mr. German again visited respondent, telling him he would let the property go for $25,000. The following day respondent telephoned Mr. German to say, "I'll take it," to which Mr. German replied, "That was yesterday." Later in the telephone conversation, however, Messrs. George and German agreed on a price of $25,000. On June 29, 1979, respondent presented Mr. German with a form "Deposit Receipt." Petitioner's Exhibit No. 2. Mr. German lined through $23,500, substituted $25,000, initialled the alteration, and signed the document. Respondent had already signed. Petitioner's Exhibit No. 2 recites: Receipt is hereby acknowledged of the sum of . . .$500.00. . .from KARMA PROPERTIES, INC. proceeds to be held in escrow by APOLLO REALTY OF MIAMI subject to the terms hereof. . . This offer is subject to obtaining an FHA commitment of not less than $35,000.00 if commitment is less than-the above $35,000.00 this offer will be null and void . . . [I]n case of default by the purchaser. . .the seller may at his option retain one-half of the deposit herein paid as consideration for the release of the purchaser. . . These written provisions notwithstanding, respondent told Mr. German that he would give the $500 deposit to his attorney, rather than place it in Apollo Realty's escrow account. The deal fell through. On November 19, 1979, Albert I. Caskill, Esquire, wrote Apollo Realty of Miami, on behalf of Mr. German: Demand is herewith made upon you for the $500 deposit being held in your escrow account in relation to the above-referenced transaction. We have been notified by the attorney for the purchasers, Lawrence M. Weiner, that his clients will not be going forward with the purchase, and, accordingly, their failure to complete the transaction pursuant to the contract constitutes a breach of the agreement. Please forward all deposit moneys to this office, same being made payable to the seller, John German. Petitioner's Exhibit No. 4. The house was off the market from June until the end of November. Mr. German never received any money on account of the transaction. (He did not even get the keys back.) Respondent never deposited any money anywhere on account of this transaction, nor did he pay Mr. German any money directly. He testified that he instructed Allen Scherer, the other principal in Karma Properties, Inc., to deposit $500 with Lawrence Weiner, Esquire; that he read Mr. Caskill's letter of November 19, 1979, and passed it on to Mr. Scherer with instructions to "correct" (T. 36) the situation; but only learned that there was no money in escrow when he received the administrative complaint with which these proceedings began. In these particulars, respondent's testimony has not been credited. The parties stipulated that Mr. Weiner would testify, under oath, that he "never held or received any money in connection with the subject transaction." Petitioner filed a proposed recommended order which has been reviewed and considered. The proposed findings of fact have been adopted in substance for the most part. Proposed findings of fact not adopted have been rejected as immaterial or as inconsistent with the weight of the evidence.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner reprimand respondent. DONE AND ENTERED this 11th day of May, 1982, in Tallahassee, Florida. ROBERT T. BENTON, II 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 11th day of May, 1982. COPIES FURNISHED: Joel S. Fass, Esquire 626 Northeast 124 Street North Miami, Florida 33161 Adam Kurlander, Esquire 1820 Northeast 163 Street North Miami Beach, Florida 33162 Samuel R. Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Carlos B. Stafford Executive Director Board of Real Estate Post Office Box 1900 Orlando, Florida 32802 Frederick H. Wilsen, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
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
The Issue The issues in this case are whether Respondent, Jessalyn Rodriguez, committed the violations alleged in a seven-count Administrative Complaint, filed with the Petitioner Department of Business and Professional Regulation on June 10, 2008, and, if so, what disciplinary action should be taken against her Florida real estate appraiser certification.
Findings Of Fact The Parties. Petitioner, the Department of Business and Professional Regulation, Division of Real Estate (hereinafter referred to as the “Division”), is an agency of the State of Florida created by Section 20.165, Florida Statutes. The Division is charged with the responsibility for the regulation of the real estate industry in Florida pursuant to Chapters 455 and 475, Florida Statutes. Respondent, Jessalyn Rodriguez, is, and was at the times material to this matter, a Florida-certified residential real estate appraiser having been issued license number 4120. The last license issued to Ms. Rodriguez is now an inactive Florida-certified residential real estate appraiser license at 12071 Southwest 131st Avenue, Miami Florida 33166. Appraisal of 6496 Southwest 24th Street. On or about June 1, 2007, Ms. Rodriguez developed, signed and communicated an appraisal report (hereinafter referred to as the “Appraisal”), for property located at 64967 Southwest 24th Street, Miami, Florida 33155 (hereinafter referred to as the “Subject Property”). At the time the Appraisal was made, Ms. Rodriguez was a Florida-certified residential real estate appraiser. The Subject Property, however, was zoned BU-1, a commercial district. The Administrative Complaint entered against Ms. Rodriguez, however, does not allege that Ms. Rodriguez committed any violation by performing an appraisal on commercially zoned property. Errors and Omissions in the Appraisal. Ms. Rodriguez on her sketch of the Subject Property contained in the Appraisal indicates that the total square footage of the Subject Property is 2,105 square feet. On the sketch, she breaks down the property into a 34.0 x 55.6 area of 1890.4 square feet, and a 5.0 x 43.0 area of 215 square feet. In her documentation for the Appraisal, Ms. Rodriguez notes that the adjusted square footage of the Subject Property is 1,890 square feet and that the property appraiser reported the square footage at 1,709 square feet. Ms. Rodriguez failed to verify that the reported 2,105 square feet contained in the Appraisal was accurate. Ms. Rodriguez admitted in her Answer and Response to Administrative Complaint, Respondent’s Exhibit 1, that she failed to verify that a rear addition to the Subject Property, most likely the 5.0 x. 43.0 additional area she measured, had not been permitted through Miami-Dade County. This unpermitted addition would account for the discrepancy in the square footage of the Subject Property noted in Ms. Rodriguez’s notes. Had she investigated the discrepancy in square footage, it is possible she would have discovered the unpermitted addition and reported it in the Appraisal. Ms. Rodriguez indicates in the Appraisal that the Subject Property has a “porch.” The “porch” she was referring to is a rather small area in the front of the Subject Property which has an overhang. The evidence failed to prove that this area, which is depicted in photos accepted in evidence, does not constitute a “porch.” Ms. Rodriguez incorrectly indicated in the Appraisal that the Subject Property had a “patio.” Her suggestion that a “grass area” constituted a patio is rejected as unreasonable. While the Subject Property has a small “yard,” it does not have a patio. Ms. Rodriguez failed to indicate in the Appraisal that the Subject Property did not have any “appliances.” The fact that appliances were to be installed after closing fails to excuse this omission. Ms. Rodriguez did not make any adjustment for, or any explanation of, the 13-year age difference between the Subject Property and comparable sale 3. The Supplemental Addendum section of the Appraisal incorrectly reports that the Subject Property had wood floors and that it had a new pool deck. Ms. Rodriguez has admitted these errors, indicating that they are “[t]ypographical error[s] but did not effect value since no monetary adjustment was made.” Failure to Document. Ms. Rodriguez’s documentation for the Appraisal lacked a number of items, all of which Ms. Rodriguez admits were not maintained. The missing documentation included the following items which were not contained in her work file: Support for a $40 per square foot adjustment for comparable sale 1 and comparable sale 3 in the Sales Comparison Approach section of the Appraisal; Support for a site size adjustment made to comparable sale 1 and comparable sale 2 in the Sales Comparison Approach section of the Appraisal; Support for a $1,500.00 “bathroom” adjustment to comparable sale 1, comparable sale 2, and comparable sale 3 in the Sales Comparison Approach section of the Appraisal; Support for a $5,000.00 “good” location adjustment made to comparable sale 1 and comparable sale 2 in the Sales Comparison Approach section of the Appraisal; Support for the $4,000.00 garage adjustment made to comparable sale 2 in the Sales Comparison Approach section of the Appraisal; Support for the $15,000.00 pool adjustment made to comparable sale 2 in the Sales Comparison Approach section of the Appraisal; Support for the $350,000.00 Opinion of Site Value in the Cost Approach section of the Appraisal; Support for the $10,000.00 adjustment for the “As Is” Value of Site Improvements in the Cost Approach section of the Appraisal; Support for the $20,000.00 adjustment for Appliances/Porches/Patios/Etc. in the Cost Approach section of the Appraisal; and Marshall and Swift pages for the time frame that the Appraisal was completed to justify the dwelling square footage price in the Cost Approach section lf the Appraisal.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Commission: Finding that Ms. Rodriguez is guilty of the violations alleged in Counts One through Seven of the Administrative Complaint as found in this Recommended Order; Placing Ms. Rodriguez’s appraiser license on probation for a period of two years, conditioned on her successful completion of the 15-hour USPAP course; Requiring that she pay an administrative fine of $2,000.00; and Requiring that she pay the investigative costs incurred in this matter by the Division. DONE AND ENTERED this 23rd of February, 2009, in Tallahassee, Leon County, Florida. LARRY J. SARTIN 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 23rd day of February, 2009. COPIES FURNISHED: Ainslee R. Ferdie, Esquire Ferdie & Lones, Chartered 717 Ponce de Leon Boulevard Suite 223 Coral Gables, Florida 33134 Jessalyn Rodriguez 9972 Southwest 125th Terrace Miami, Florida 33176 Robert Minarcin, Esquire Department of Business & Professional Regulation 400 West Robinson Street, N801 Orlando, Florida 32801-1757 Thomas W. O’Bryant, Jr., Director Division of Real Estate Department of Business and Professional Regulation 400 West Robinson Street Hurston Building-North Tower, Suite N802 Orlando, Florida 32801 Ned Luczynski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issues are essentially whether Respondent failed to use reasonable diligence on four appraisals of residential condominiums in Orlando done in 2007, and whether he failed to register his appraisal business with Petitioner; and, if so, how he should be disciplined.
Findings Of Fact Respondent is a certified Florida real estate appraiser, holding DBPR license 5422. In 2007, Respondent was appraising through Rush Realty Appraisal Services, LLC (Rush Realty), which he owned and operated. Rush Realty was registered with the Florida Department of State as a limited liability company, but it was not registered with DBPR. The Appraisals In 2007, Rush Realty, through Respondent and a trainee he supervised, appraised four condominium units in a residential complex in Orlando called the Residences at Millenia (Millenia). Three of the appraisals were done in January and the other in June. In January, Rush Realty appraised two of the condos at $279,500 and appraised the third at $258,500; in June, it appraised the fourth condo at $279,500. Respondent is responsible for these appraisals. One January appraisal was based on five comparables, three of which were sales of Millenia condos; one of those three was a pending sale. The other two January appraisals were based on four comparables, two of which were sales of Millenia condos, both of which were pending sales. One of the pending Millenia sales used for the January appraisals was for $290,000 ($282 per square foot, abbreviated psf). The other Millenia pending sale used for the January appraisals was for $279,500 ($272 psf). The closed sales used in the January appraisals included one at Millenia for $209,800 ($204 psf), another at Millenia for $207,400 ($202 psf), two at nearby Sunset Lake Condos for $275,900 ($265 psf), one at Sunset Lake for $259,900 ($251 psf), and one at Sunset Lake for $254,900 ($256 psf). According to the January appraisal reports, the sources of the comparables used by Respondent were the public records and the Multiple Listing Service (MLS) for the closed sales and the Millenia sales office for the pending sales. The June appraisal was based on two Millenia condo sales. These were the two sales that were pending at the time of the January appraisals. According to the June appraisal, those sales closed in March 2007, one at $280,000 and the other at $279,900. The June appraisal listed only the Millenia sales office as the source of the data on the two Millenia closed sales used as comparables for that appraisal. The June appraisal listed only the Millenia sales office as the source of the data on the two Millenia closed sales used as comparables for that appraisal. Respondent's January appraisal reports stated that the price range of properties similar to the subject property sold within the year prior to the appraisal report was from $100,000 to $400,000. In fact, according to MLS, the range was $25,000 to $313,000. Only seven of the 186 comparable sales were over $250,000. Respondent's June appraisal report also stated that the price range of properties similar to the subject property sold within the year prior to the appraisal report was from $100,000 to $400,000. In fact, according to MLS, the range was $102,000 to $313,900. Only four of the 88 comparable sales were over $250,000. Whether Respondent Used Reasonable Diligence The information provided by the Millenia sales office for the pending sales used as comparables for the January appraisals was unverifiable at the time. It was inappropriate for Respondent to use the Millenia sales office as the source of comparables for the January appraisals (or to use it to verify other sources) because Millenia was interested in the transaction for which the appraisals were done. Respondent testified that he and his trainee used a research tool called Microbase to obtain public records information on comparable sales for the appraisals. He testified that the information from the public records used for the January appraisals, and from the Millenia sales office for the June appraisal, was verified by the MLS, HUD-1 closing statements, and contracts. The use of MLS for verification for the closed sales in the January appraisals is indicated by the inclusion of MLS in the part of those appraisal report forms used to indicate data source(s). Although the data and verification sources other than the Millenia sales office and MLS were not indicated on the report forms for the January appraisals, and no source other than the Millenia sales office was indicated on the report form for the June appraisal, Respondent testified that his work files document the use of all of these sources for the closed sales used as comparables in the four appraisals. DBPR questions the veracity of Respondent's testimony regarding his work files and the use of these data and verification sources based on his failure to replicate his work files when asked to do by Petitioner's investigator. DBPR points to no requirement for Respondent to replicate his work files upon request. It appears from the evidence that Respondent understood he was being asked to produce the files, not to replicate (i.e., recreate) them. His response was in the negative based on his explanation that the files had been confiscated by and remained in the possession of the Federal Bureau of Investigation. The FBI has not returned Respondent's work files. Neither party attempted to subpoena the work files in this case, and the work files were not placed in evidence. DBPR also questions the veracity of Respondent's testimony regarding his work files and the use of these data and verification sources based on his failure to use any of the numerous other comparable sales that were available from those sources, most of which were sold for considerably less money than the comparables used by Respondent. For example, for the January appraisals, there were 37 comparable sales in the preceding six months available through MLS that ranged from $39,000 to $235,000; and, for the June appraisal, there were 16 comparable sales in the preceding six months available through MLS that ranged from $134,900 to $190,000. DBPR's expert utilized these comparables in MLS and reached value conclusions that were approximately $90,000 lower than Respondent's. According to MLS, other closed sales at Millenia between July 27, 2006, and January 27, 2007, ranged from $180,000 ($184.82 psf) to $205,000 ($207.49 psf), with an average of $198,472 ($196.96 psf) and a median of $205,000 ($199.42 psf). Comparable sales of condos within a mile from Millenia that closed between July 27, 2006, and January 27, 2007, ranged from $39,000 ($38.24 psf) to $306,000 ($275.93 psf), with an average of $187,279 ($183.82 psf) and a median of $188,500 ($189.95 psf). Comparable sales of condos within a mile from Millenia that closed between January 27, 2006, and January 27, 2007, ranged from $25,000 ($30.56 psf) to $317,900 ($256.28 psf), with an average of $168,468 ($152.69 psf) and a median of $169,650 ($159.49 psf). Respondent testified that he rejected the comparables he did not use based on the properties' relative poor condition, effective age, and lack of amenities. He also testified that, in some cases, the sellers appeared to be in financial distress and extremely motivated to sell, even at lower than market value; or, in other cases, the sellers did not raise their prices as the market rose. Taking all the evidence into account, DBPR did not prove that Respondent did not use any data and verification sources other than the Millenia sales office for the closed sales used as comparables in the four appraisals; however, Respondent inappropriately used pending sales instead of the available comparables and did not diligently review the available comparables before choosing the comparables he used. Instead, he quickly focused on sales at Millennia and Sunset Lakes that were significantly higher than the predominant prices of other comparable sales available to him through MLS and other sources. Respondent failed to exercise reasonable diligence in developing the appraisals and preparing the appraisal reports. If pending sales had not been used as comparables in the January appraisals, or if other available comparables had been used, the appraised values would have been significantly lower. The June appraisal would have been lower if other available comparables had been used. Other Errors in Appraisal Reports For two of the closed sales, in the part of the appraisal report form for describing sales and financing concessions, Respondent mistakenly entered MLS, with an official public records book and page number. This labeling error could have been confusing, but there was no evidence that anyone was misled by the error. The report forms used by Respondent included an addendum indicating that closed sales were used for comparables. This language was inconsistent with the indications elsewhere in the January appraisal reports that pending sales were used for that purpose. While potentially confusing, there was no evidence that anyone actually was misled by the addendum language. The addendum language also stated that all comparables were given equal consideration. Actually, in one of the January appraisals, the higher comparables were given greater weight. In that report, the property appraised for approximately $30,000 more than it would have if all comparables had been given equal consideration. This language was misleading in that computations would have been required to determine that it was in error. USPAP Rule 1-1(a) of the 2006 Uniform Standards of Professional Appraisal Practice (USPAP) requires a real property appraiser to be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal. Respondent violated this rule. Rule 1-1(b) prohibits substantial errors of omission or commission that significantly affect an appraisal. Respondent violated this rule. Rule 1-1(c) of USPAP prohibits rendering appraisal services in a careless or negligent manner, including making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of the results. Respondent violated this rule. Rule 1-4(a) of USPAP requires that, when a comparable sales approach is necessary for a credible result, an appraiser must analyze such comparable sales data as are available. Respondent violated this rule. Rule 2-1(a) of USPAP requires that written and oral appraisal reports be set forth in a manner that is clear and accurate and not misleading. Respondent violated this rule. Aggravating and Mitigating Circumstances Respondent had not been disciplined and had not received a letter of guidance prior to the four appraisal reports at issue in this case. His license was in good standing at the time. When an appraiser does not exercise reasonable diligence in doing an appraisal and preparing the appraisal report and the result is an unreasonably high value conclusion, as happened in the four appraisal reports at issue in this case, and a lender relies and acts on the appraisal report, the lender is harmed ipso facto, and the borrower and public may also be harmed, notwithstanding that many residential loans defaulted after 2007 besides the loans made based on these four appraisals. There was no evidence as to the specific extent of the actual harm to this lender. Although DBPR filed a separate administrative complaint for each of the four appraisals, the conduct complained of in each administrative complaint was similar. Each administrative complaint has three counts: one for not using reasonable diligence in doing the appraisal and preparing the appraisal report; another for not registering Rush Realty; and a third for violating USPAP provisions. Respondent testified without contradiction that revocation or suspension of his appraisal license, and even a substantial fine, would be a devastating financial hardship to him and his family.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that DBPR enter a final order finding Respondent subject to discipline under sections 475.624(4) (through violations of section 475.623, USPAP, and rule 61J-9.001) and 475.624(15); suspending his license for three months, subject to probation upon reinstatement for such a period of time and subject to such conditions as the Board may specify; fining him $2,000; and assessing costs related to the investigation and prosecution of the cases in accordance with section 455.227(3)(a). DONE AND ENTERED this 26th day of October, 2012, in Tallahassee, Leon County, Florida. S J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2012.
Findings Of Fact Respondent is a registered real estate broker and was so licensed at all times relevant to this proceeding. At the time of the alleged forgeries, Respondent was an officer of John F. Ring Realty, Inc., and was the manager of that firm's office at 201 North University Drive, Ft. Lauderdale, Florida. On June 25, 1980, Respondent wrote two checks on the account of John F. Ring Realty, Inc., payable to Phyllis Cohen in the sum of $425, and to Ann Sanders in the sum of $550. On July 10, 1980, and on the same account, Respondent wrote a second check to Phyllis Cohen in the amount of $1,000. On September 19, 1980, on the same account, Respondent wrote a check payable to Dan Dickerhoff in the sum of $1,210. Respondent wrote a fifth check on this account on September 26, 1980, payable to Rose Friedman, in the sum of $815. All of these checks were purportedly written to cover sales commissions. Each check bore an endorsement which was purportedly that of the payee, and was endorsed by Respondent. Each named payee testified that the endorsement was not his or her signature, that he or she was not entitled to the funds represented by the checks, and never received the check or the funds. Each identified the signature of Respondent as the drawer. Respondent admitted to his ex-partner, Petitioner's investigator and Phyllis Cohen that he had endorsed and cashed these checks. Respondent also apologized to Ann Sanders when she confronted him with the forgery. These were statements against interest and are therefore admissible as hearsay exceptions. 1/ Respondent's character witnesses established that he has a good reputation in the realtors community. These witnesses have found Respondent to be honest and reliable, and would continue doing business with him regardless of any adverse findings here.
Recommendation From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent be found guilty of allegations set forth in the Administrative Complaint. It is further RECOMMENDED that Respondent's license as a real estate broker be revoked. DONE AND ENTERED this 28th day of December, 1981, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of December, 1981.
