The Issue The issues are whether Respondent violated Sections 475.624(2), 475.624(14), and 475.624(15), Florida Statutes, and if so, what penalty should be imposed.
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 here a state-certified residential real estate appraiser. In January 1998, Petitioner issued Respondent residential real estate appraiser certificate number RD-0002524, with a business location of 2607 South Woodlawn Boulevard, No. 271, Deland, Florida, 32720. On or about March 5, 1998, Deborah Jeane Palfrey, as the buyer, and United Capital of Central Florida, Inc. (UCCF), as the seller, entered into a contract for sale and purchase of residential property ("the property") located at 236 Steward Terrace, Deltona, Florida. The contract lists the purchase price of the property as $54,500. Testimony developed at hearing indicates that UCCF did not own the property in fee simple. Instead, UCCF had an assignable contract to purchase the property. UCCF eventually assigned this contract to Ms. Palfrey. In March 1998, John E. Parrot owned both UCCF and Realnet USA. Both companies were located at the same address in Orlando, Florida. Both companies were involved to some extent in the real estate investment business. Competent evidence indicates that Realnet USA was a mortgage broker. Michael Mullvain was vice-president of UCCF and, as such, had signature authority for that company. Mr. Mullvain, a licensed real estate broker, also was the general manager of Realnet USA. On or about March 5, 1998, Mr. Mullvain and/or his assistant at Realnet USA, Tammie Wright, faxed a request for an appraisal of the property to Certified Appraisal Service (CAS), which was located in Winter Park, Florida. The appraisal request was made on behalf of USCCF and directed to the attention of Cecil and Teresa Wright. UCCF and Realnet USA were frequent clients of CAS. Realnet USA had requested CAS to provide as many as 200 similar appraisals in the past. The appraisal request for the property stated that the projected sale price was $79,000. The request contained the following comments: "House to be brought up to FHA specifications with central A/C, new kitchen, and baths." The request also included the following statement: "Cecil: Paul said you have already done some research on the property for him. Please go ahead with drive-by appraisal as usual." In requesting a drive-by appraisal, Mr. Mullvain intended for the appraiser to take note of needed repairs. He wanted an estimate of what the property would be worth based on the repairs being requested. At the time that the appraisal request was made, Mr. Mullvain knew that the property was distressed. His purpose in requesting the appraisal was to determine what the property would be worth if it was brought up to minimum Federal Housing Administration (FHA) standards. These standards require that all surface areas be serviceable. They also require anything that functions to function properly. FHA specifications take into consideration paint, carpet, kitchen, central air conditioning, windows, etc. In other words, the house must be habitable to pass an FHA appraisal inspection. Mr. Mullvain understood that he was ordering a proposed appraisal based on a comparable market analysis of the property's future value after repairs. He did not expect an appraisal based on a cost approach and an income approach, as well as a sales comparison approach. When Mr. Mullvain ordered the appraisal, he did not intend for it to be used by anyone other than UCCF. However, Mr. Mullvain testified that a salesperson would have given the appraisal to potential buyers upon request or in a package to provide additional information about the property. According to its normal business practice, Realnet USA prepared a rehabilitation summary for the property, showing the expected cost of repair. This document listed the following repair items and costs: (a) landscape, $100; (b) roof, $0.00; (c) exterior, $600; windows/doors, $100; (d) kitchen, $200; (e) plumbing-bath, $200; (f) paint & ceilings, $650; (g) carpet, $200; (h) subcontractors, $500; (i) central A/C, $100; (j) termite, $100; (k) appliances, $250; and (l) other, $0.00. The total expected repair cost was $3,000. Realnet USA kept this rehabilitation summary in its file for the property. No one provided a copy of the document to Respondent. Respondent occasionally worked for CAS as an independent contractor. Cecil Wright would call Respondent and ask her to prepare appraisals for Realnet USA. Respondent understood that all appraisal reports for Realnet USA should produce a proposed estimate of value based on the assumption that improvements were to be "better than new" when repairs and renovations were complete. Respondent prepared these reports on forms specified by Mr. Wright and sent them to him without signing her name under her typed signature and without identifying her state-certified residential appraiser number. In March 1998, Mr. Wright requested Respondent to prepare an appraisal report on the property for Realnet USA. He asked her to use a Federal Home Loan Mortgage Corporation (Freddie Mac) form contained in his computer software. Respondent understood that she would be using the forms to prepare a "restricted appraisal," showing the estimated market value of the property as it would exist after improvements were made to bring the house up to FHA specifications, including central air conditioning, a new kitchen, and new baths. Respondent also understood that the appraisal was intended only for Realnet USA's use. After accepting the assignment, Respondent went to the property. She observed the neighborhood and the exterior and interior of the house. She took pictures of the property. As to the exterior of the house, Respondent observed wood damage. She concluded that the damage was probably the result of termites or some other kind of pest infestation. There were little holes in the back of the house. As to the interior of the house, Respondent noted that the kitchen needed new cabinets and appliances. One of two baths needed repairs because the toilet shared plumbing with the kitchen refrigerator's icemaker, which was located on the other side of the wall. The other bathroom had a brick shower stall. Respondent saw that someone had renovated a one-car garage, changing it into living space, but leaving the supporting roof beams exposed. After visiting the property, Respondent performed the necessary research to complete her assignment. This research included performing a computer search of the local multiple listing service and public records to find comparable properties. Respondent did not make and file copies of documents that supported any of her research results. She did take pictures of the properties that she chose as comparable. On March 9, 1998, Respondent produced the report described below. The computer-generated cover page identifies Realnet USA as the entity requesting the appraisal and provides a file number. The following is the only other information on the cover page: In accordance with your request, I have personally made an exterior inspection from the street in front of the real property at: 235 Steward Terrace Deltona, Florida 32738 The purpose of this report is to estimate the market value of the subject property observed. In my opinion, the estimated market value of the property as of March 7, 1998, is: $79,000 Seventy-Nine Thousand The attached report contains the description, analysis, and supportive data for the conclusions, final estimate of value, descriptive photographs, limiting conditions and appropriate certifications. Next, Respondent filed in the two-page Freddie Mac form. The form states as follows at the top: "This form may be used if the second mortgage will not exceed $15,000 and value is based on 'as is' condition." On the form, Respondent typed in UCCF as the borrower. She indicated that the 1,556 square-foot house had six rooms, including three bedrooms, two baths, a family room, and no garage/carport. She noted that the house had central air conditioning. In the Field Report section of the form, Respondent provided information regarding the neighborhood, adding the following comments: "The subject is located in well-established neighborhood conveniently located to schools, shopping, employment, places of worship, and major arteries. There are no apparent adverse factors which would affect the subject's marketability." Respondent also typed information about the property, indicating that it was a detached, rambler-style, building with frame/siding exterior walls and a composite shingle roof material. In the section for favorable or unfavorable comments including any deferred maintenance, Respondent stated as follows: "When renovated to meet FHA/HUD standards, the subject will be a well built dwelling that projects good eye appeal. Functional utility will be average. The subject will meet expectations of purchases in this price range." In a section of the form labeled "Market Comparable Analysis Prior to Improvement," Respondent used the data she had collected from the local multiple listing service and public records to describe four pieces of property that she considered comparable. The four houses that Respondent listed as comparable were located one to fifteen miles from the subject property. Respondent listed the sale price of each house all of which sold between September 1997 and December 1997. Comparable one through four sold for $79,000; $77,700; $85,700; and $77,200, respectively. Respondent included the following general comments about her sales comparable approach: "Sale 3 is located more than one mile from the subject but was included for support purposes to the report. Depreciation is based on the subject being renovated and having an effective life of 3 years. Depreciation is calculated using 1% per year of effective age." Under the general comments in very fine print, the form states as follows: The information shown in this report is derived from an inspection of the neighborhood and exterior inspection of the subject property and market comparisons. The estimated market value is based upon this information and the knowledge of the undersigned. This report is not to be construed as an appraisal report. Respondent filled in the blank for the estimated value of the subject property as $79,000 as of March 7, 1998. She typed in her name as the person completing the report without signing her name under her typed signature and without identifying her state-certified residential appraiser number. Respondent attached the following to the report before she sent it to Cecil Wright at CAS: (a) subject property photo addendum containing three pictures that Respondent took of the property; (b) comparable property photo addendum containing pictures that Respondent took of the four comparable houses described in the report; (c) sketch/area table addendum of the subject property that Respondent prepared. Respondent testified that she also attached some certification pages to her report. However, the record contains no such documents. Respondent expected Mr. Wright to complete the report and sign his name as her supervising/review appraiser. Respondent did not keep a copy of the report she sent to Mr. Wright. The record contains two copies of Respondent's report, the first of which was eventually sent to Realnet USA. The first report contains the following alterations from the work personally prepared by Respondent: (a) An unidentified individual added Respondent's alleged hand-written initials under her typed name at the end of the Freddie Mac form; and (b) An unidentified individual added the alleged signature of Cecil Wright and his alleged state-certified residential appraiser number at the end of the Freddie Mac form. The first copy of the report includes only the cover page and the Freddie Mac form described above that Respondent prepared. It does not include the pictures or sketch prepared by Respondent or any other addendum. Respondent copied the second copy of the report from CAS's files after the initiation of Petitioner's investigation in this case. The second copy of the report includes the pictures and sketch prepared by Respondent but does not contain hand-written initials under Respondent's typed name or Mr. Wright's alleged signature and appraiser number at the end of the Freddie Mac form. Instead, it contains the following additions: (a) three maps prepared by an unidentified individual showing the location of the subject property and the four comparable properties; (b) a CAS certification page, attached by an unidentified individual; and (c) a page setting forth a certification and statement of limiting conditions together with contingent and limiting conditions, attached by an unidentified individual. The first certification page, attached to the second copy of the report, states as follows in relevant part: CERTIFIED APPRAISAL SERVICE CERTIFICATION * * * The appraiser has inspected all improvement on this property, but does not warrant the condition of the roof, floors, appliances, plumbing, electrical, heating and air conditioning. Only a visual inspection has been made and it is assumed that all are in serviceable condition for the purpose of this appraisal. Unless noted, it is assumed the subject property is free from termite infestation. * * * The value estimate is -as is- unless otherwise stated. Certification of Appraiser/Review Appraiser (If applicable) As of the date of this report, Cecil Wright, SRA has completed the requirement of the continuing education program of the Appraisal Institute. Cecil Wright is a State-Certified Residential Appraiser-No.RD 0000219. Additional Certification of the Appraisal Institute The appraisal analysis and opinion were developed and this appraisal report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice, as promulgated by the Appraisal Standards Board of the Apraisal [sic] Foundation, and the requirements of the code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. * * * Definition of Client Neither all nor any part of the contents of this report shall be conveyed to any person or entity, other than the appraiser's or firm's client (the client is defined as the person or firm ordering the appraisal from the appraiser), through advertising, solicitation materials, public relations, news, sales, or other media without the written consent or approval of the authors, particularly as to valuation conclusions. . . . Termite information The appraiser makes a cursory inspection of the exterior wood on the dwelling for the purpose of determining whether there is wood rot, possible termite damage or any other wood related problems. The appraiser is not qualified to determine if any damage is caused by termites as this is beyond our expertise. Should we find any rotted wood damage that requires attention it will be mentioned in the appraisal report. . . . The last certification page attached to the second copy of the report, states as follows in relevant part: CERTIFICATION AND STATEMENT OF LIMITING CONDITIONS Certification: The drive-by inspector certifies and agrees that: * * * The drive-by inspector has inspected the exterior of the property only and that inspection may be limited to what can be seen from the street. To the best of the drive-by inspector's knowledge and belief, all statements and information in this report are true and correct and that the drive-by inspector has not knowingly withheld any significant information. It is assumed that the interior is in good condition but it must be noted that a more complete exterior inspection and/or an interior inspection could produce a substantial change in value from that value indicated in this report. All contingent and limiting conditions are contained herein (imposed by the terms of the assignment or by the undersigned affecting the analyses opinion, and conclusions contained in this report). All conclusions and opinions concerning the real estate that are set forth in the report were prepared by the drive-by inspector whose signature appears on the report, unless indicated as 'reviewer.' No change of any item in the report shall be made by anyone other than the appraiser or the reviewer whose names appear on the report, and the appraiser, the reviewer, or their firm shall have no responsibility for any such unauthorized change. CONTINGENT AND LIMITING CONDITIONS The certification of the drive-by inspector is subject to the following conditions in addition to any other specific and limiting conditions as are set forth by the drive-by inspector in the report: * * * 5. The inspector assumes that there are no hidden or unapparent conditions of the property, subsoil, or structures, which would render it more or less valuable. The inspector assumes no responsibility for such conditions, or for engineering which might be required to discover such factors. * * * Disclosure of the contents of the report is governed by the Bylaws and Regulations of the professional appraisal organization with which the inspector is affiliated. Neither all, not any part of the content of the report, or copy thereof (including conclusions as to the property value . . .) shall be used for any purposes by anyone but the client specified in the report, the mortgagee or its successors and assigns . . . without the previous written consent of the inspector, nor shall it be conveyed by anyone to the public . . . without the written consent and approval of the inspector. On all reports, subject to satisfactory completion, repairs, or alteration, the report and value conclusion are contingent upon completion of the improvements in a professional workmanlike manner. At the end of this last certification page, an unidentified individual signed Respondent's alleged initials as the drive-by inspector. Mr. Wright's alleged signature and appraiser number also appears at the bottom of the page. Respondent's three-page appraisal report did not include the following or state why these factors were not considered: (a) a label or title indicating that the report was restricted in scope as opposed to a conventional summary report; (b) an accurate statement regarding the report's intended use or purpose; (c) a statement regarding the property's highest and best use; (d) a cost approach analysis including an estimate of site value and an estimate of the value of the improvement, together with comments describing the sources used to compute the cost estimate, site value, and square footage; (e) an income approach analysis; (f) a history of prior sales or listing information for the property even though Respondent knew it had been on the market for 18 months for $61,500 and had not sold for that price; (g) an addenda explaining relevant information and including any departures from USPAP not otherwise included in the report; (h) a standard language explaining the scope of appraisal and the appraisal process; (i) a standard language of additional comments, explanations and limiting conditions; (j) a statement of contingent and limiting conditions and appraiser's certification, including the supervisory appraiser's certification; and (k) the signature of appraiser and/or supervisory appraiser, together with their respective state certification numbers. On or about August 12, 1998, William Wynn, inspected the subject property. He prepared a Uniform Residential Appraisal Report on August 17, 1998. Mr. Wynn's report lists Deborah Palfrey as current owner and borrower. It lists Pinnacle Financial Corp. as lender/client. Mr. Wynn's report describes the neighborhood of the property. The report includes comments describing market conditions and factors that affect the marketability of the properties in the neighborhood. Mr. Wynn's report described the property's site, stating that its highest and best use was its present use. It also includes a description of improvements on the property, indicating that the interior floors, walls, trims/finish, bath floor, bath wainscot, and doors were in good condition. Mr. Wynn added the following comments about the condition of the improvement: "The improvements are of average quality construction maintained in good condition. No repairs required at the time of inspection. The garage has been converted into living area." Mr. Wynn's report provides an estimate of the property's value using the cost approach. Regarding the cost approach, Mr. Wynn made the following comments: See attached sketch. Cost calculations are based on Marshall and Swift Guidelines and information for local contractors. Physical depreciation is based on observed conditions and estimated by the age/life method. Land [is] valued by abstraction, sales comparison, and typical ratio of land to improvement for the area. The estimated remaining economic life is 49 years. Mr. Wynn's report provides an estimate of the property's value using a sales comparison analysis. In making this analysis, Mr. Wynn compared the subject property to three comparables. Regarding the sales comparison approach, Mr. Wynn made the following relevant comments: The subject and the three comparable sales are located in Deltona Lakes. See the addendum for additional comments explaining the adjustments for the differences in gross living area and explanation for sales dated over six months. The three closed sales used in the sales comparison approach provide a reliable range of value for the appraiser property. *See Addendum. * * * The subject was listed at $57,500, in the first part of 1998. The subject sold for $50,000 March 1998. Mr. Wynn's report states that the appraisal was made "as is" and not subject to repairs. As part of the final reconciliation, the report states as follows: Emphasis is on the sales comparison approach because it reflects current market trends for similar properties. Typically homes in the subject's neighborhood are not purchased for income; therefore, the income approach was not applied. Cost approach is not required. Mr. Wynn concluded in his report that the property's estimated value was $60,000 as of August 12, 1998. He then signed his name and identified his state certification number. Mr. Wynn attached a General Text Addendum to his report, which states as follows: The comparables are closed sales in the subject's market area. All three sales are considered to be reasonable substitutes for the appraised property. Sale #2 and #3, although dated over six months is [sic] considered a reliable value indicator due to stable market conditions for the time period covered. The subject has a family room 19.9 x 19.8 that is a garage converted to heated and air-conditioned living area. The adjustments for the differences in living area are made at a lower than typical amount ($20 per sq. foot) because the ceiling in the family room has exposed roof trusses (painted). There is no finished drywall ceiling in the family room to cover the roof trusses. The appraiser was not able to bracket the subject in gross living area with a similar comparable sale. Mr. Wynn attached the following additional information to his report: (a) two maps showing the location of the subject property and the comparables; (b) three pictures of the subject property and pictures of the comparables; (c) a sketch/area table addendum; (d) a copy of his curriculum vitae; (e) a definition of market value; (f) a statement of contingent and limiting conditions; (g) an appraiser's certification; and (h) a supervisory appraiser's certification. Mr. Wynn then signed his name to the report and identified his state certification number. Mr. Wynn did not have a supervisory appraiser in making his report. In September 1998, Peter T. Woods, a state-certified general appraiser, requested his employee, Walter A. Drumb, a state-certified residential appraiser, to perform an appraisal of the subject property. Subsequently, Mr. Drumb prepared a Summary Appraisal Report using the form for a Uniform Residential Appraisal Report. The report lists Jean Palfrey as the borrower and Pinnacle Financial Corp. as the lender/client. Mr. Drumb's report states that "[t]he intended use of the appraisal is to aid in mortgage loan negotiations." Mr. Drumb's report also comments that "[t]he dwelling appears to be of average quality construction and in good physical condition with no functional inadequacies noted." In making his report, Mr. Drumb used two approaches: (a) the cost approach; and (b) the sales comparison analysis. The report states that the income approach was not used "due to a lack of reliable market rental data in the subject neighborhood." Regarding the cost approach, Mr. Drumb included the "as is" value of site improvements and made the following comments: "No functional or external obsolescence noted. Cost approach was prepared using Marshall and Swift Residential Cost Handbook and local cost estimates. See attached addendum for measurements. Estimated remaining economic life: 52 years." Regarding the sales comparison analysis, Mr. Drumb made the following comments: "The subject conveyed in March 1998 for $50,000. The public records reveal no prior sales of the comparable sales within the past year." Mr. Drumb concluded that the property had an estimated market value of $63,000 as of September 11, 1998. His report indicates that the appraisal was made "as is" and not subject to repairs and alterations. Mr. Drumb signed his report and identified his state-certified residential appraiser number. Mr. Woods also signed the report as the supervising appraiser and identified his state-certified general appraiser number. Mr. Drumb included an addendum to his report that explained his choice of comparables. He included a floor plan, pictures of the subject property and the properties used as comparables, a map showing the locations of the subject property and comparables, and a subdivision plat. Mr. Drumb included a page in his report that explained the scope of the appraisal and the appraisal process in detail. Finally, Mr. Drumb attached three pages to his report, setting forth additional comments, explanations, and limiting conditions. Included in these comments was a statement of limiting conditions and appraiser's certification. Mr. Drumb and his supervisory appraiser, Mr. Woods, signed the final certification page and identified their state-certified appraiser numbers. Petitioner's investigator, Robert Baird, has personal knowledge of the property as he resided on the same street as the property at all times material here. In late 1997 or early 1998, prior to investigating the complaint, Mr. Baird viewed the property and thought that it was in a state of disrepair. Mr. Baird inspected the property for second time on or about May 17, 1999, as part of his investigation. At that time, the property appeared to have been renovated as compared to its condition in early 1998. In the course of the investigation, Mr. Baird interviewed Respondent. During the interview, Respondent stated that her estimated value of the property included "with improvements." Respondent later admitted that she "could understand how individuals could misunderstand her estimate of value if they were not aware that it was based on proposed renovations." In either case, Respondent was unable to furnish Mr. Baird with documentation to support her estimated value of the property with or without improvements. Respondent admitted in the hearing that the cost of renovating the house could have been more than the renovated house would have been worth. She admitted that, based on her personal experience, the proposed renovations could cost in excess of $20,000, excluding any termite or wood rot. Respondent knew Realnet USA wanted the appraisal to help it "determine whether the house was worth it to purchase or not." If Respondent's estimated value of the property was $79,000 as it existed on March 7, 1998, and as stated on the cover page of her report, then her estimated value was substantially higher than the property's "as is" market value. If Respondent's estimated value of the property was $79,000, taking into consideration the appraisal request for an estimate of the market value after proposed renovations to meet minimum FHA standards, then Respondent failed to place a stated value on the estimated cost for each proposed renovation. During the hearing, Respondent admitted that USPAP required her to prepare an addendum to include necessary information such as prior sales history when the restricted form she was using did not include that information. She acknowledged that she was required to comply with 1998 USPAP even if she was unfamiliar the publication's contents and despite her client's request for something less than a conventional appraisal. Competent evidence indicates that appraisal reports by state-certified residential appraisers are seldom, if ever, free of errors. Certain information is always subjective as it is based upon the appraisers' personal experience and expertise. Additionally, there appears to be some confusion in the profession as to the precise information that a "restricted appraisal" must include. Nevertheless, USPAP requires the all appraisal reports prepared by state-certified residential appraisers to contain certain basic information or an explanation as to any departures from those requirements. At times, a supervisory/review appraiser will make changes to an appraiser's report. Knowing that a supervisory appraiser has this prerogative, does not mean that an appraiser is allowed to submit an incomplete appraisal report with the expectation that the review appraiser will complete the report and sign the appraiser's name. Clear and convincing evidence in this case indicates that the three-page appraisal report prepared by Respondent and submitted to Mr. Wright was substantially deficient and resulted in Realnet USA's receipt of an ambiguous, contradictory, and misleading appraisal based on unverifiable data.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner enter a final order, suspending Petitioner's certification for one year followed by one year of probation in which Respondent shall be required to complete 30 hours of continuing education courses in addition to the courses required to maintain licensure and imposing an administrative fine in the amount of $2,000. DONE AND ENTERED this 20th day of July, 2001, in Tallahassee, Leon County, Florida. 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 20th day of July, 2001. COPIES FURNISHED: Steven W. Johnson, Esquire Steven W. Johnson, P.A. 1801 East Colonial Drive Suite 101 Orlando, Florida 32803 Sunia Y. Marsh, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street, Suite N-308A Orlando, Florida 32801-1772 Herbert R. Fisher, Chairperson Florida Real Estate Commission Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900 Hardy L. Roberts, III, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issue is what penalty should be imposed for a violation by Respondent of the Uniform Standards of Professional Appraising Practice.
Findings Of Fact At all material times, Respondent has been a certified general real estate appraiser, holding license number 000894. He has worked as an appraiser for 14 years and has held his real estate license for 15 years. He has never previously been disciplined. By letter dated March 16, 1995, Respondent sent what he entitled as a "letter of opinion of value for property located at [address omitted]." The letter of opinion states that the document "is not a Real Estate Appraisal Report, rather [it is] an opinion of value." The letter estimates the value of appraised property as $65,000-$70,000. The client for whom the letter of opinion was prepared was satisfied with the process by which Petitioner prepared the letter of opinion and the letter of opinion itself. The letter of opinion caused no one any damage or inconvenience. Standard 2-2 of the Uniform Standards of Professional Appraisal Practice (USPAP) states: "Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used: Self-Contained Appraisal Report, Summary Appraisal Report or Restricted Appraisal Report." SMT-7, which is commentary that accompanies certain standards of the USPAP, provides: Various nomenclature has been developed by clients and client groups for certain appraisal assignments. The development of this Statement on Appraisal Standards is a response to inquiries about several types of appraisal assignments, and it is appropriate to clarify the meaning of these terms for future reference. The term Letter Opinion of Value has been used to describe a one-page letter sent to a client that stated a value estimate and referenced the file information and experience of the appraiser as the basis for the estimate. This type of service does not comply with USPAP, and should be eliminated from appraisal practice. USPAP recognizes that the results of any appraisal assignment may be presented in a letter format provided that the content items in one of the three report options under Standards Rule 2-2 are addressed. The Restricted Report is the minimum report format and replaces the concept of the Letter Opinion of Value. Respondent has stipulated to a violation of USPAP Standard 2-2 in the preparation of the March 15, 1995, letter.
Recommendation It is RECOMMENDED that, in the absence of an agreement of the type described in the preceding paragraph, the Board of Real Estate Appraisers enter a final order reprimanding Respondent. ENTERED on September 30, 1996, in Tallahassee, Florida. ROBERT E. MEALE, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this September 30, 1996. COPIES FURNISHED: Henry M. Solares Division Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Steven W. Johnson Senior Attorney Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Attorney Clifford R. Rhoades 227 North Ridgewood Drive Sebring, Florida 33870
The Issue The issues in this case are whether Respondent violated the provisions of Section 475.624(2), (14) and (15), Florida Statutes (2006)1/, as alleged in the Administrative Complaint, and if so, what penalty should be imposed?
Findings Of Fact The Department of Business and Professional Regulation, Division of Real Estate, is the state agency charged with the licensing and regulation of property appraisers in the State of Florida, pursuant to Section 20.165 and Chapters 455 and 475, Florida Statutes. Respondent, James Lester, Jr., is a Florida state certified general appraiser, holding license number RZ2783. He has been licensed by the Florida Real Estate Appraisal Board since 1991, initially holding a certified residential appraisal license and then a general appraisal license. Kenneth Ardire and Bradley Scott Bozeman formerly worked in the office referred to as J. Lester Company. The business was owned by Respondent's father. Bozeman was a residential appraiser and Ardire was a registered trainee appraiser supervised by Bozeman. During the time material to this Amended Administrative Complaint, Respondent did not act in a supervisory capacity with respect to either Bozeman or Ardire. Neither man currently works for the firm, and Bozeman's appraiser's license has been revoked. In February 2006, Ardire and Bozeman prepared a vacant land appraisal report (Report 3) related to property located on Highway 71 in White City, Florida, for Vision Bank. Respondent was not involved in the preparation of the vacant land appraisal and did not sign the report. Vision Bank also requested a subdivision analysis of the property. Ardire and Bozeman were assigned the report regarding the subdivision analysis because they had prepared the prior report on the same property. They were assigned to this task by an employee in the office other than Respondent. Preparation of a subdivision analysis is considered a commercial appraisal, as opposed to a residential appraisal. Neither Ardire nor Bozeman is licensed to prepare commercial appraisals. For reasons that are unclear, Ardire provided a "draft" report to Vision Bank, which shall be referred to as Report 2. Report 2 is unsigned and contains only the names of Bozeman and Ardire. Report 2 was provided by Vision Bank to Donald Giles, another licensed appraiser. Based on his review of Report 2, Giles filed a complaint with the Department. The complaint was identified as DBPR Case No. 2007-3522. In response to a request from the Department, Bozeman supplied to DBPR a copy of what is now referred to as Report 1 and its supporting work papers. This report indicates that it was prepared by Respondent, Bozeman and Ardire. Based on this report and workfile, DBPR Case No. 2008-1566 (the current proceeding) was initiated against Respondent. Neither report has numbered pages. Reports 1 and 2 differ in the following ways: Report 1 lists all three appraisers, with purported signatures for each. Report 2 lists only Ardire and Bozeman and contains no signatures. However, both reports state on the second page of the cover letter that "the appraisals attached were written, valued, analyzed and concluded by Kenneth Ardire and Bradley Scott Bozeman." The cover letter for Report 1 is on company letterhead, and is addressed to Vision Bank. The cover letter for Report 2 is on plain paper, and is addressed to Capital City Bank, at the same address listed for Vision Bank. The first page of Report 2 lists Vision Bank as the intended user. On the page labeled "Extraordinary Assumptions," Report 2 contains a sixth assumption which states: "The appraiser completing this assignment has a small interest in the property. However, the appraiser was not biased in his final conclusion of value." This assumption is omitted in Report 1. The certification page in Report 2 also lists Bozeman as having a minor interest in the property, lists Ardire and Bozeman but contains no signatures. The certification page for Report 1 has no reference to Bozeman's interest and has three purported signatures (Ardire, Bozeman and Respondent). On the page entitled Certificate of Value, Report 1 has three signature blocks and three purported signatures (Ardire, Bozeman, and Respondent). Report 2 contains two signature blocks (for Ardire and Bozeman) but no signatures. The third paragraph of the section entitled "Approaches to Value Omitted" in Report 2 contains the following sentences: "The market approach is unique since not all properties are alike. In this case the appraiser compared an area in Lands Landing in Wewahitchka and Honey Hill Subdivision in Wewahitchka." These two sentences are omitted from this section of the report in Report 1. With respect to the Highest and Best Use Discussion, the first two pages in both reports are identical. Report 1 includes an additional two pages entitled "Introduction to the Appraisal Process," which appears to be general information related to the appraisal process as opposed to specific information related to the appraisal performed. The written information contained in the "Public and Private Restriction" section is identical. However, Report 1 also includes maps and pictures of the area. Both reports contain the Land Appraisal Report (Report 3) signed by Ardire and Bozeman. Report 1 contains additional information with respect to the vacant land report not included in Report 2. On the page labeled "Land Sales Comparison Chart," under the Section entitled "Reconciliation and Land Value Estimate," Report 2 contains the sentence, "All the sales are zoned for similar use and felt to have the same potential for use as the subject." This sentence is omitted from Report 1. On the page labeled "Income Approach," Report 2 contains the sentence, "Method 2 is the financing and development method." This sentence is omitted in Report 1. Report 1 contains a blank page entitled "Addendum" followed by pages from a book with a heading "Subdivision Analysis." While there are differences between Report 1 and Report 2, they do not make a significant difference in terms of the quality and usefulness of the reports. Section 475.628, Florida Statutes, requires that appraisers comply with the USPAP. Section 475.628 was last amended in 1998, and was enacted in 1991. USPAP is adopted by the Appraisal Foundation, which is authorized by Congress as the Source of Appraisal Standards and Appraiser Qualifications. Pursuant to Section 475.611(1)(q), Florida Statutes, "Uniform Standards of Professional Appraisal Practice" means the most recent standards approved and adopted by the Appraisal Standards Board of the Appraisal Foundation. Section 475.611 was also enacted in 1991, and the language of this subsection has been unchanged, although renumbered, since that time. To this end, the Department has submitted as Exhibit 5 the USPAP Standards that became effective January 1, 2005. The most recent amendments for each section of the Standards is reflected on page four of the exhibit. None of these amendments relevant to these proceedings occurred prior to 1998. The Department alleges that Report 1 and the workfile for the report do not conform to several components of the USPAP standards in effect in 2005. Specifically, the Conduct portion of the Ethics Rule provides in part that "[a]n appraiser must not communicate assignment results in a misleading or fraudulent manner. An appraiser must not use or communicate a misleading or fraudulent report or knowingly permit an employee or other person to communicate a misleading or fraudulent report." Report 1 violated this section of the Ethics Rule contained in USPAP in that it was difficult for a reader of the report to determine exactly what was being appraised. Moreover, the inclusion of the gross sell-out amount on the first page, described as "potential gross income" in bold type is also misleading, because non- appraisers would infer that the potential gross income was the concluded value of the property. The Recordkeeping portion of the Ethics Rule addresses the need for appraisers to keep a workfile for each appraisal. The rule provides in pertinent part: An appraiser must prepare a workfile for each appraisal, appraisal review, or appraisal consulting assignment. The workfile must contain: the name of the client and the identity, by name or type, of any other intended users; true copies of any written reports, documented on any type of media; summaries of any written reports or testimony, or a transcript of testimony, including the appraiser's signed and dated certification; and all other data, information, and documentation necessary to support the appraiser's opinions and conclusions and to show compliance with this Rule and all other applicable Standards, or references to the location(s) of such other documentation. With respect to Report 1, the workfile does not include documentation regarding marketing information for Gulf County, as listed in the report, and also lacks documentation to support any highest and best use analysis, including the four criteria necessary to establish the highest and best use for the property. It also lacks documentation to support the statements in Report 1 regarding the respective public and private restriction section, and lacks any plans or specifications to indicate the type of infrastructure proposed for the subdivision. The workfile also lacks documentation to support the income approach used, and contains no information to support the construction costs, closing costs, real estate taxes, expenses or other calculations used in the Calculations and Comments Section of Report 1. Also missing is any documentation from the identified engineers to support the data used for construction costs. Finally, there is also no documentation to support the data or calculations in the two-year discounted cash flow analysis in Report 1. With respect to Report 3, the workfile lacks documentation to support the single family price ranges in the neighborhood section of the report; lacks documentation to support the information in the Market Data Analysis Section; and lacks any multiple listing services (MLS) data or public records for the comparable sales used in the report. The Amended Administrative Complaint refers to the Scope of Work Rule. This rule is in actuality entitled Standard 1: Real Property Appraisal, Development and states: "In developing a real property appraisal, an appraiser must identify the problem to be solved and the scope of work necessary to solve the problem, and correctly complete research and analysis necessary to produce a credible appraisal." Report 1 identifies the problem as "estimating the value of the proposed subdivision and determines [sic] a value on a typical lot." However, the Report does not identify the scope of work and does not complete the research and analysis necessary to complete the appraisal properly. Standards 1-1(a), (b) and (c) require the following: In developing a real property appraisal, an appraiser must: be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal; not commit a substantial error of omission or commission that significantly affects an appraisal; and not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results. Report 1 violates these standards because, as discussed more fully below, the report contains several significant errors, including the failure to discuss the four criteria for analyzing highest and best use. Standards Rule 1-2(d) requires that in developing a real property appraisal, an appraiser must identify the effective date of the appraiser's opinions and conclusions. Report 1 stated that the value date of the report and the date of the report itself, were the same as the date of the inspection of the property, June 7, 2006. Mr. Grimes, the Department's expert, explained that this was a violation of the standard because in a situation where the appraiser is estimating a value for a project that is not now in existence, the hypothetical nature of the valuation must be adequately explained, and the effective date of the appraisal should reflect the date in the future when the subdivision is scheduled to be completed. Mr. Grimes' testimony is credited. Standards Rule 1-3 requires the following: When the value opinion to be developed is market value, and given the scope of work identified in accordance with Standards Rule 1-2(f), an appraiser must: identify and analyze the effect on use and value of existing land use regulations, reasonably probable modifications of such land use regulations, economic supply and demand, the physical adaptability of the real estate, and market area trends; and develop an opinion of the highest and best use of the real estate. Report 1 does not provide an analysis of the highest and best use of the property. While the factors related to such an analysis are defined, there is no discussion of these factors related to the actual property being appraised. Standards Rule 1-4(a),(c) and (g) provides: In developing a real property appraisal, an appraiser must collect, verify, and analyze all information applicable to the appraisal problem, given the scope of work identified in accordance with Standards Rule 1-2(f). (a) When a sales comparison approach is applicable, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion. * * * When an income approach is applicable, an appraiser must: analyze such comparable rental data as are available and/or the potential earnings capacity of the property to estimate the gross income potential of the property; analyze such comparable operating expense data as are available to estimate the operating expenses of the property; analyze such comparable data as are available to estimate rates of capitalization and/or rates of discount; and base projections of future rent and/or income potential and expenses on reasonably clear and appropriate evidence. Comment: In developing income and expense statements and cash flow projections, an appraiser must weigh historical information and trends, current supply and demand factors affecting such trends, and anticipated events such as competition from developments under construction. * * * (g) An appraiser must analyze the effect on value of any personal property, trade fixtures, or intangible items that are not real property but are included in the appraisal. While the Amended Administrative Complaint refers to all three subparagraphs listed above, the evidence presented dealt solely with the deficiencies related to Standards Rule 1- 4(c). Mr. Grimes opined that with respect to Report 1, the income approach to the cash flow analysis did not support the conclusions, projections on income, and with respect to this project, the sale of lots over a period of time. The statements made in the report are conclusory in nature, with little or no explanation of the basis for forming the conclusions. Standards Rule 1-6(a) and (b) provides: In developing a real property appraisal, an appraiser must: reconcile the quality and quantity of data available and analyzed within the approaches used; and reconcile the applicability or suitability of the approaches used to arrive at the value conclusion(s). Report 1 indicates that there are three traditional approaches to value in the valuation process: the cost approach, the direct sales comparison approach, and the income capitalization approach. While the report states that all three approaches will be considered, the appraisal report omits any discussion of the cost approach and the direct sales comparison approach. By omitting these approaches from the analysis, the report omits an important "check and balance" process that would have caught what Mr. Grimes considered to be a substantial error in the discounted cash flow analysis. Standards Rule 2-1 provides: Each written or oral real property appraisal report must: clearly and accurately set forth the appraisal in a manner that will not be misleading; contain sufficient information to enable intended users of the appraisal to understand the report properly; and clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment. Hypothetical conditions and extraordinary assumptions are considered to be two different things. As noted in Report 1, an extraordinary assumption is defined as an assumption that presumes certain information to be factual. If found to be false, the information could alter the appraiser's opinions or conclusions. A hypothetical condition is something that assumes conditions contrary to known facts about physical, legal or economic characteristics of the property being appraised, or about conditions external to the property, such as market conditions or trends, or about the integrity of data used in the analysis. Hypothetical conditions and extraordinary assumptions should be explained separately in an appraisal report, so that the intended user is in a better position to understand the true value of the appraisal. Report 1 lists 6 conditions and assumptions all together. They are that the proposed subdivision is based on 21 lots; that all plans and specs (unidentified) are to be approved and accepted by all governmental authorities; all work will be completed in a quality workmanship manner with quality materials; assumed the subject property can be developed as proposed; and information on the number of lots was made available by the engineer Bailey, Bishop and Lane. The report does not differentiate which are considered hypotheticals and which are considered extraordinary assumptions. The report does not contain sufficient information to enable the intended user of the appraisal to understand the report and to use it for its intended purpose, i.e., to determine whether the highest and best use for the land is subdivision development. Standards Rule 2-2(b) provides in pertinent part: Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used; Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report. * * * (b) The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: * * * state the intended use of the appraisal; summarize information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment; * * * (vi) state the effective date of the appraisal and the date of the report; * * * summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions; state the use of the real estate existing as of the date of value and the use of the real estate reflected in the appraisal; and, when reporting an opinion of market value, summarize the report and rationale for the appraiser's opinion of the highest and best use of the real estate; . . . Report 1 states that the intended use of the appraisal is to determine the fair market value of the property. It also provides sufficient information to identify the real estate involved. However, as noted at finding of fact 18, the effective date of the appraisal, the date of the property inspection and the date of the report are the same. Where, as here, the appraisal is determining value of a proposed subdivision as completed at some future time, the date of the report cannot be the effective date of the appraisal. The report fails to have any discussion or analysis with respect to the property's highest and best use, and has little or no reasoning or analysis to support the opinions and conclusions contained in the report. Report 1 contains what purports to be Respondent's signature. Clearly, by signing an appraisal report, a property appraiser takes responsibility for the contents of that report. When speaking with the investigator during the investigation of this case, Respondent stated that he had little recollection of the appraisal, but given that his signature was on it, he acknowledged responsibility for whatever errors it contained. However, at hearing, Respondent disputed that it was actually his signature. Respondent's testimony that the signatures contained in Report 1 are not his is credited. Included in the record of this proceeding are other documents, including past appraisals prepared by Respondent, that contain what he acknowledges to be his signature. After carefully reviewing all of the signatures in evidence, it cannot be said with any degree of certainty that the signatures included in Report 1 are indeed the signatures of Respondent.2/
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED that: The Florida Real Estate Appraisal Board enter a final order dismissing the Amended Administrative Complaint. DONE AND ENTERED this 24th day of November, 2009, 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 24th day of November, 2009.
The Issue The issues in this case are whether Respondent violated Subsections 475.624(15), Florida Statutes (2006),1 and, if so, what discipline should be imposed.
Findings Of Fact Mr. Coleman is and was at all times material to this proceeding, a state-certified residential real estate appraiser in the State of Florida, having been issued license number RD-4033 in July 2003. Mr. Coleman has never had any prior disciplinary action taken against him. In March 2007, Mr. Coleman received a request to perform an appraisal on a condominium unit located at 841 Amberjack Circle, Unit 304, Englewood, Florida (Subject Property). The purpose of the appraisal was for mortgage lending, and the lender was J.P. Morgan, Chase Bank, N.A. The Subject Property is a newly-constructed three- bedroom, two-bath condominium unit with 1,903 square feet of gross living area. The Subject Property is located on the third floor and is the first unit in the development to be sold that has a view of a natural body of water and a preserve. On March 10, 2007, Mr. Coleman developed and communicated an appraisal report on the Subject Property. In determining his opinion of value, Mr. Coleman used the sales comparison approach. This approach requires the appraiser to find comparable sales of property similar to the property being appraised and to make adjustments for any differences from the property being appraised and the comparable properties. Mr. Coleman selected three properties to be used as comparable sales for his report. The first property selected as a comparable sale is a third-floor, three-bath condominium unit located at 8520 Amberjack Circle, H2/301, Englewood, Florida (Comparable Sale 1). This unit contains 2,625 square feet of gross living area. Comparable Sale 1 sold for $550,496. The second property selected as a comparable sale is a second-floor condominium located at 8540 Amberjack Circle, H3/203, Englewood, Florida (Comparable Sale 2). This unit contains 1,927 square feet of gross living area. The recorded deed shows that the selling price of Comparable Sale 2 is $408,000. Mr. Coleman was provided information by the developer that in addition to the original selling price of $408,000 that upgrades had been purchased, bringing the total sale price of Comparable Sale 2 to $417,200.2 There was no information in the appraisal report to show why there was a discrepancy between the selling price reported by the developer and the selling price contained in the public records. The third property selected as a comparable sale is a second-floor condominium located at 8560 Amberjack Circle, H4/203, Englewood, Florida (Comparable Sale 3). This unit has 1,927 square feet of gross living area. At the time that Mr. Coleman was preparing the appraisal report, he could not find a listing for Comparable Sale 3 in the county records. It is not clear whether Mr. Coleman relied on online records or whether he actually went to the clerk’s office to check the records. The deed that was recorded for Comparable Sale 3 shows a sale price of $409,000. Mr. Coleman was advised by the developer that in addition to the selling price of $409,000 that upgrades had been purchased, bringing the total sale price of Comparable Sale 3 to $416,000. Mr. Coleman relied upon the sales information from the developer and concluded that the county clerk’s office had erred in recording the total sale prices for Comparable Sale 2 and Comparable Sale 3. There were at least 15 other units that were more similar to the Subject Property than Comparable Sale 1. Mr. Coleman selected Comparable Sale 1, because he wanted a unit that would have a higher price than the contract price for the Subject Property. He stated: I knew that this property [Subject Property] sold for $450,000, and if I was going to make it work at all I would have to use a comparable with a higher sale price. I believed at the time that the subject unit was worth more than $450,000 that it sold for, at least that much. And so in order to show that the subject unit had that value, I used the higher price comparable. I was asking the sales office for-–give me unit that is of similar size that’s sold for a higher price. And he said there weren’t any that he was aware of, and I said, well give me something that shows that there’s value at the subject property. Mr. Coleman argues in his Proposed Recommended Order that he was bracketing when he chose Comparable Sale 1. There was no evidence presented that bracketing was involved in his decision to chose Comparable Sale 1 nor was there any evidence that bracketing was an accepted practice in Charlotte County, Florida, at the time the appraisal report was prepared and communicated. Because Comparable Sale 1 was a larger unit than the Subject Property, Mr. Coleman made an adjustment in the price for Comparable Sale 1 to compensate for the difference in square footage. Mr. Coleman concluded that the value of a square foot of gross living area was $100.3 He did not comment in his appraisal report how he arrived at this price per square foot. The difference in the amount of square footage in the Subject Property and Comparable Sale 1 is 722 square feet. Thus, he adjusted the sale price for Comparable Sale 1 by deducting $72,200. Mr. Coleman also adjusted the price for Comparable Sale 3 by deducting $5,000 for an additional bathroom. None of the comparable sales have a view of a natural body of water or a preserve as does the Subject Property. The comparables have a view of man-made retention ponds, which are referred to as lakes. Mr. Coleman concluded that, based on his professional and personal knowledge, there is a premium for a view of a natural body of water and a preserve and stated in his report: The adjustment for site is based on the list prices for the same unit in Hammock Cove condos versus the subject Preserve condo. The premium for having a view of Lemon Creek and the preserve is estimated at $120,000. The adjustment is less than half the estimated difference. The units in the development in which the Subject Property is located that have a view of the natural body of water or preserve were listed for sale at the time of the appraisal for approximately $120,000 more than similar units without such a view. None of the units with a view of the natural water and preserve had sold at the time of the preparation of the appraisal report; therefore, there were no prior sales which could be used to determine the value of the view. After the appraisal was completed, there were some units with the view of the natural body of water and the preserve which sold for $500,000. There was no evidence presented to show whether these units were similar to the Subject Property in size, upgrades, or floor location. The Department’s expert, Dennis J. Black (Mr. Black), criticized Mr. Coleman for relying on the listing information from the developer, who was an interested party, in determining the value of the view of the natural body of water and the preserve. Mr. Black felt that Mr. Coleman should have gone to other sources for such information, such as other developments which were similarly situated. Mr. Coleman knew from his own experience that units in the development in which he lived that had a similar view of the Subject Property sold for more than units without a view of the preserve. He did try unsuccessfully to find some developments that were similar to the one at issue with some units having a view of a natural body of water and other units having a view of man-made retention ponds. Therefore, Mr. Coleman did try to find sources other than the developer for a valuation of the view. Mr. Coleman concluded that the value of the view was less than half of the $120,000 increase for which other units with a view of natural water and a preserve were being listed for sale. The record does not establish on what basis he made the assumption that the value of the view was less than half of $120,000. Mr. Coleman made an adjustment of $50,000 to the three comparable sales. Based on the adjustments made by Mr. Coleman for the size in the units, the view, and the additional bathroom, the adjusted sale price for Comparable Sale 1 was $523,296. The adjusted sale price for Comparable 2 was $467,200, and the adjusted sale price for Comparable Sale 3 was $466,000. Thus, the range of adjusted sale prices of the comparable sales was from $466,000 to $523,296. He valued the Subject Property at $500,000, which was within the range of the adjusted comparable sales. He testified that he tended to value the Subject Property a little higher because it had upgrades, a superior view, and was located on the third floor. The evidence does not demonstrate why he valued the Subject Property higher when an adjustment had been made for the superior view in computing the adjusted selling prices for Comparable Sales 1 and 2. Additionally, Comparable Sales 2 and 3 also had upgrades, as evidenced by the discrepancies between the recorded deeds and the selling prices provided by the developer. The only difference between the Subject Property and Comparable Sales 2 and 3 was the location of Comparable Sales 2 and 3 on the second floor and the location of the Subject Property on the third floor. Mr. Coleman indicated in his appraisal report that the current condominium trends in the neighborhood of the Subject Property showed that the property values were stable, and the demand/supply was in balance. Based on research that he had done for a book shortly before the effective date of the subject appraisal report, Mr. Black opined that the general market in the area of southern Sarasota County and northern Charlotte County was not stable, but was in a decline, with deteriorating property values and an oversupply of similar properties offered for sale. His opinion was of the overall market trends and not the trends of the particular neighborhood in which the Subject Property is located. In his appraisal report, Mr. Coleman certified that he “performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice [USPAP] 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.” The following USPAP requirements were applicable to the instant case at the time the appraisal report was prepared. Standards Rule 1-1 In developing a real property appraisal, an appraiser must: be aware of, understand, and correctly employ those recognized methods and techniques that are necessary to produce a credible appraisal; not commit a substantial error of omission or commission that significantly affects an appraisal; and not render appraisal services in a careless or negligent manner, such as by making a series of errors that, although individually might not significantly affect the results of an appraisal, in the aggregate affects the credibility of those results. Standards Rule 1-2 In developing a real property appraisal, an appraiser must: * * * (f) identify any extraordinary assumptions necessary in the assignment; . . . Standards Rule 1-4 In developing a real property appraisal, an appraiser must collect, verify, and analyze all information necessary for credible assignment results. (a) When a sales comparison approach is necessary for credible assignment results, an appraiser must analyze such comparable sales data as are available to indicate a value conclusion. Standards Rule 2-1 Each written or oral real property appraisal report must: clearly and accurately set forth the appraisal in a manner that will not be misleading; contain sufficient information to enable the intended users of the appraisal to understand the report properly; and clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment. Standards Rule 2-2 Each written real property appraisal report must be prepared under one of the following three options and prominently state which option is used: Self-Contained Appraisal Report, Summary Appraisal Report, or Restricted Use Appraisal Report. (b) The content of a Summary Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum: * * * (iii) summarize information sufficient to identify the real estate involved in the appraisal, including the physical and economic property characteristics relevant to the assignment. Mr. Black opined that Mr. Coleman violated USPAP Standards Rules 1-1(a), 1-1(b), and 1-1(c). According to Mr. Black, Mr. Coleman did not correctly employ the cost comparison method by giving more weight to Comparable Sale 1, which was the most dissimilar comparison sale. Mr. Black concluded that Mr. Coleman violated USPAP Standards Rule 1-1(b), because there was no support to demonstrate how Mr. Coleman arrived at the $50,000 adjustment for the preserve view. Mr. Black opined that Mr. Coleman violated USPAP Standards Rule 1-1(c) by giving more weight to Comparable Sale 1 and by failing to demonstrate how he developed the adjustment for the preserve view. Mr. Black opined that Mr. Coleman violated USPAP Standards Rule 1-2(f) by failing to identify the $50,000 adjustment for the view in the work file or the report. Mr. Black concluded that Mr. Coleman violated USPAP Standards 1-4(a) for failing to collect, verify, and analyze the information on other units which were more similar to the Subject Property than Comparable Sale 1. Mr. Black opined that Mr. Coleman violated USPAP Standards Rules 2-1(a), 2-1(b), and 2-1(c). Mr. Black determined that Mr. Coleman’s failure to show how he arrived at the $50,000 adjustment for the view, when the information on which he was relying showed a value of $120,000, constituted a violation of USPAP Standards Rule 2-1(a). Mr. Black concluded that Mr. Coleman violated USPAP Standards Rule 2-1(b) as follows: [B]y failing to provide the information of the support and rationale for the $50,000 adjustment. He has not provided sufficient information. He’s also failed to explain how he arrives at the $500,000 amount, which is $15,000 above the amount that would have been determined by equal weighting of all comparables. And how he comes up with $500,000 where the most weight would be given to Comparable Sale 1, which the most dissimilar sale. Mr. Black opined that Mr. Coleman violated USPAP Standards Rule 2-1(c) by failing to disclose the extraordinary assumption that the view of the Subject Property was valued at $50,000. Mr. Black concluded that Mr. Coleman violated USPAP Standards Rule 2-2(b)(iii) by failing to support how he came up with the $50,000 positive adjustment and by failing to explain the reasoning behind giving the most weight to the most dissimilar sale.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Mr. Coleman violated Subsection 475.624(15), Florida Statutes, and suspending his license for six months. DONE AND ENTERED this 9th day of August, 2010, in Tallahassee, Leon County, Florida. S SUSAN B. HARRELL 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 9th day of August, 2010.
The Issue Whether the Respondent committed the violations alleged in the Administrative Complaint dated March 3, 2004, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Division is the state agency responsible for investigating complaints filed against registered, licensed, or certified real estate appraisers and for prosecuting disciplinary actions against such persons. § 455.225, Fla. Stat. (2005). The Florida Real Estate Appraisal Board ("Board") is the state agency charged with regulating, licensing, and disciplining real estate appraisers registered, licensed, or certified in Florida. § 475.613(2), Fla. Stat. (2005). At the times material to this proceeding, Mr. Rutan was a certified residential real estate appraiser in Florida, having been issued a license numbered RD 2791. Mr. Rutan had been a certified residential real estate appraiser in Florida for approximately 10 years. At the time of the events giving rise to this action, Mr. Rutan was employed by Excel Appraisal. Mr. Rutan interviewed and hired Frank Delgado, Juan Carlos Suarez, and Ricardo Tundador to work at Excel Appraisal as state-registered assistant real estate appraisers. At all times material to this proceeding, Mr. Rutan was Mr. Suarez’s supervisor and was responsible for Mr. Suarez’s appraisals. On or about June 16, 1999, Mr. Suarez prepared an appraisal for property located at 9690 Northwest 35th Street, Coral Springs, Florida, in which he valued the property at $325,000. The property is a multi-family, four-plex property. Mr. Rutan signed Mr. Suarez's appraisal as the supervisory appraiser and certified on the appraisal that he had inspected the property by placing an “X” in the "Inspect Property" box. The appraisal form signed by Mr. Rutan contains a "Supervisory Appraiser's Certification" that provides: If a supervisory appraiser signed the appraisal report, her or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have reviewed the appraisal report, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 4 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. It is the custom in the industry that a supervisory appraiser who certifies that he or she has inspected the property in question must inspect the property inside as well as outside before he or she can sign the appraisal. Mr. Rutan inspected the property the day after he signed the appraisal and only inspected the property from the outside. The appraisal report on the property at issue herein listed a prior sale of the property from Rodney Way to Doyle Aaron for $325,000 on April 28, 1999. The appraisal failed to list the sale of the property on the same day from Julius Ohren to Rodney Way for $230,000. Mr. Rutan did not investigate the relevant sales history of the property and was unaware, therefore, that the property had been “flipped” and was considerably overvalued in the appraisal report.2 Mr. Rutan admitted that he did not investigate prior sales and that the property was substantially overvalued. Mr. Suarez listed in the appraisal report three "comparable sales," that is, sales of properties similar in type and location to the property being appraised, to support the valuation of $350,000. The first comparable property used in the appraisal was property located at 4102 Riverside Drive, Coral Springs, which was listed in the appraisal report as being previously sold for $315,000. Earlier on the day that the Riverside Drive property was sold for $315,000, however, it had been sold for $185,000. Mr. Rutan failed to research and review the sales of the comparable properties that were included in Mr. Suarez's appraisal report, and the "comparable sale" of property on Riverside Drive was not properly used to value the property that was the subject of the appraisal report at issue herein. Mr. Suarez failed to make the proper adjustments in value on the Riverside Drive property based on the features of that property that were superior to the features of the subject property. The Riverside Drive property was located on a canal and should have had a negative adjustment with respect to the subject property, which was not on a canal. Mr. Suarez included a positive adjustment in the comparable sales data for the Riverside Drive property. Mr. Rutan failed to review the comparable property adjustments submitted by Juan Carlos Suarez for the appraisal of the subject property. Mr. Suarez overstated the rental income of the subject property in his appraisal report. Mr. Rutan failed to research and review the rental figures Mr. Suarez submitted. When Mr. Rutan was notified by Brokers Funding, a company that purchased the loans on the subject property, that there were problems with the appraisal done by Mr. Suarez, Mr. Rutan checked additional comparable sales and interviewed the tenants in the building. He also hired another appraiser to conduct an appraisal of the subject property. Based on his investigation and Mr. Salimino’s appraisal, Mr. Rutan discovered the problems in Mr. Suarez's appraisal and report of the subject property. Mr. Salimino’s appraisal for the subject property was $290,000, but Mr. Rutan estimated that his appraisal would have been approximately $250,000. Mr. Rutan fired Mr. Suarez, as well as Frank Delgado, and Ricardo Tundador, all three of whom were subsequently indicted on federal charges relating to real-estate-appraisal scams. In a Final Order entered on April 22, 2002, Mr. Rutan was found guilty by the Board of violating Sections 475.624(14) and 475.624(15), Florida Statutes, and was ordered to pay an administrative fine of $1,000. Mr. Rutan trusted Mr. Suarez to do an honest and competent appraisal and was rushed by Mr. Suarez to approve the appraisal on the subject property. The evidence presented by the Division is sufficient to establish with the requisite degree of certainty that Mr. Rutan failed to carry out his responsibilities as Mr. Suarez's supervisory appraiser, failed to review Juan Carlos Suarez’s appraisal for accuracy, and failed to inspect the inside of the subject property, which caused or contributed to the substantially over-stated valuation of the subject property.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Appraisal Board enter a final order finding that William Rutan is guilty of violating Section 475.624(10), (14), and (15), Florida Statutes, as alleged in Counts I through IV of the Administrative Complaint and revoking Mr. Rutan's Florida certification as a real estate appraiser. DONE AND ENTERED this 31st day of August, 2005, in Tallahassee, Leon County, Florida. S PATRICIA M. HART 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 31st day of August, 2005.
The Issue Whether Respondent committed the violations alleged in the Amended Administrative Complaint issued against him 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 January 12, 2005, a Florida-certified residential real estate appraiser, holding license number RD 4946. He has not been the subject of any prior disciplinary action. During the time he has been licensed, Respondent has supervised various registered trainee appraisers, including Julio Potestad, who worked under Respondent's supervision from March 17, 2006, through February 26, 2007, and has remained "very good friends" with him.4 At all times material to the instant case, the Subject Property has been zoned by the City of Miami as R-1, which allows only single-family residences. In January of 2006, Respondent was working as a residential real estate appraiser for Appraisals of South Florida, Inc., a business owned by Anthony Pena, when he received an assignment to conduct an appraisal of the Subject Property for Coast to Coast Mortgage Brokerage, Inc. (Coast). Gustavo Ceballos had agreed to buy the Subject Property from Jorge Vazquez for $395,000, and Mr. Ceballos had applied for a mortgage loan from Coast to make the purchase. The purpose of the appraisal was to determine whether the market value of the Subject Property justified Coast's making the loan. The written appraisal request from Coast was dated January 24, 2006, and directed to Mr. Potestad, who was working for Mr. Pena at the time. It indicated that the "[p]roperty [t]ype" of the Subject Property was "SFR" (meaning single-family residence). Attached to the request was a copy of a signed, but undated, copy of a "[s]ales contract" for the Subject Property. Using a pre-printed form, Respondent completed a Summary Appraisal Report (Report), dated January 31, 2006, containing his opinion that the market value of the Subject Property as of January 27, 2006 (the reported "date of [Respondent's] inspection" of the Subject Property) was $395,000 (which happened to be the contract price). He arrived at his opinion by conducting a sales comparison analysis and a cost analysis (but not an income analysis). On January 5, 2006, just three weeks and a day prior to the reported "date of [Respondent's] inspection," City of Miami Code Enforcement Officer Maria Lugo had inspected the interior and exterior of the Subject Property at the request of the owner, Mr. Vazquez, who had contacted Ms. Lugo after she had "posted on the property" a code violation notice. Ms. Lugo's January 6, 2006, inspection had revealed that the Subject Property was not a single-family residence, but rather a nonconforming four-unit, multi-family structure (with each unit having an exterior door and there being no interior access between units) and, further, that various additions and improvements (including additional bathrooms and kitchens, a metal awning and concrete slab in the rear of the property, a driveway on the west side of the front of the property, and a "garage conversion") had been made without a building permit having been obtained. These were City of Miami code violations for which the owner of the property could be fined. Extensive work (including demolition work), requiring building permits, needed to be done to correct these code violations and reconvert the structure to a legal, single-family dwelling. As of January 27, 2006 (the reported "date of [Respondent's] inspection"), no building permit to perform work on the Subject Property had been obtained, and the code violations Ms. Lugo had found 22 days earlier had not yet been corrected. As he indicated in the Report, Respondent appraised the Subject Property as a single-family residence (with four bedrooms and three baths), even though, as of January 27, 2006, it was a multi-family structure (as an appropriate inspection by a reasonably prudent residential real estate appraiser would have revealed).5 Doing so was a substantial and fundamental error that was fatal to the credibility of Respondent's market value opinion. 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: 7150 SW 5th Street City: Miami State: FL Zip Code: 33144-2709 * * * Occupant: X Owner _ Tenant _ Vacant * * * Assignment Type: X Purchase Transaction _ Refinance Transaction _ Other (describe) Lender/Client: Coast to Coast Mortgage Brokerage, Inc. . . . . Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? X Yes _ No Report data source(s) used, offering price(s), and date(s): The subject property has a prior sale on July 2005 for $349,000. Although he provided the "offering price" and "date" of the "prior sale," Respondent did not reveal, in this section, the "data source(s) [he] used" to obtain this information. He did, however, disclose this "data source" (ISC NET6) in a subsequent section of the Report (the "Sales Comparison Approach" section). The "Contract" section of the Report read, in pertinent part, as follows: I X did _ 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. The subject property is under contract for $395,000[;] financial assistance noted. Contract Price: $395,000 Date of Contract: No[t] Provided 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: 4% seller contribution for closing costs and prepaids. As part of the appraisal development process, "[a]ppraisers are required to obtain a full copy of the contract [for sale] that's signed and dated." The contract for sale that Respondent analyzed, and which he has maintained in his work file on the Subject Property (Work File), however, while signed by Mr. Vazquez and Mr. Ceballos, was incomplete and not dated. Paragraph 21 of this incomplete and undated contract for sale provided as follows: ADDITIONAL TERMS SELLER WILL PAY 4% OF PURCHASE PRICE FOR BUYER CLOSING COSTS PROPERTY SOLD AS IS CONDITIONS In the "Neighborhood" section of the Report, Respondent identified the boundaries of the "neighborhood" in which the Subject Property was located, and he stated that the properties in the neighborhood were either "One-Unit" (95%) or "Commercial" (5%) properties and that the neighborhood had no "2-4 Unit" or other "Multi-Family" structures.7 The following further representations, among others, were made in the "Neighborhood" section: Neighborhood Description: The subject is located in an established neighborhood consisting of 1 story ranch style homes similar to the subject in age, size and appeal. The subject neighborhood provides a good environment for the house being appraised. There are no factors that will negatively affect marketability of the subject property. Employment stability and convenience are reasonable. Market Conditions (including support for the above conclusions): The subject is in a market place in which residential properties similar to the subject take approximately 3 months to sell. Demand and [s]upply are in balance with a stable growth rate. These figures were obtained from the appraiser[']s observation of the marketing time for listing and sales within the immediate area and the ratio of the number of listings to sales. The "Site" section of the Report read, in pertinent part, as follows: * * * View: Residential Specific Zoning Classification: R-1 Zoning Description: Single Family 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. * * * Are there any adverse site conditions or external factors (easements, encroachments, environmental conditions, land use, etc.)? _ Yes X No If Yes, describe * * * In the "Improvements" section of the Report, Respondent indicated, among other things, that the Subject Property was a one-unit, ranch-style structure built in 1948, with an "effective age" of 20 years. Next to "Roof Surface" Respondent entered, "Shingles/Avg." Other information provided in this section included the following: Finished area above grade contains: 7 Rooms, 4 Bedrooms, 3 Bath(s) 2,249 Square Feet of Gross Living Area Above Grade. * * * Describe the condition of the property (including needed repairs, deterioration, renovation, remodeling, etc.). The subject conforms to the neighborhood in terms of age, design and construction. Based upon an inspection performed by the appraiser on the subject property[,] [it] does appear to have roof damage resulting from Hurricane Wilma. The property's roof exhibits many missing and/or detached roof shingles.[8] The appraiser bases these findings only upon a visual inspection of the subject. A thorough roof inspection should be done to properly assess the full extent of the damage. The Hurricane does not appear to have negatively affected the subject area's economic base. 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[9] 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" properties that he examined to estimate (using a sales comparison analysis) the market value of the Subject Property, and he provided information about these comparables, as well as the Subject Property. The following were the three "comparables" Respondent selected for his sales comparison analysis: Comparable Sale 1, located at 7140 Southwest 7th Avenue in Miami (.14 miles from the Subject Property); Comparable Sale 2, located at 240 Southwest 69th Avenue in Miami (.28 miles from the Subject Property); and Comparable Sale 3, located at 7161 Southwest 5th Terrace in Miami (.06 miles from the Subject Property). According to the Report, these "comparables," as well as the Subject Property, were 56 to 58-year-old, single-family (one- unit) ranch-style residences in "average condition" situated on lots ranging in size from 6,000 square feet (the Subject Property and Comparable Sale 3) to 6,565 square feet (Comparable Sale 1). Comparative information relating to these "comparables" and the Subject Property was set forth in a grid (Sales Comparison Grid). On the "Date of Sale/Time" line on the Sales Comparison Grid, Respondent entered the following: Comparable Sale 1: December 2005 Comparable Sale 2: November 2005 Comparable Sale 3: Sept. 2005 On the "Sale Price" line on the Sales Comparison Grid, Respondent entered the following: Subject Property: $395,000 Comparable Sale 1: $380,000 Comparable Sale 2: $387,000 Comparable Sale 3: $390,000 On the "Sale Price/Gross Liv" line on the Sales Comparison Grid, Respondent entered the following: Subject Property: $236.39 sq. ft.[10] Comparable Sale 1: $254.01 sq. ft. Comparable Sale 2: $195.65 sq. ft. Comparable Sale 3: $195.00 sq. ft. On the "Data Source(s)" line on the Sales Comparison Grid, Respondent entered the following: Comparable Sale 1: ISC NET/MLX[11] Comparable Sale 2: ISC NET Comparable Sale 3: ISC NET/MLX On the "Verification Source(s)" line on the Sales Comparison Grid, Respondent entered the following: Comparable Sale 1: Observation from street Comparable Sale 2: Observation from street Comparable Sale 3: Observation from street "Observation from street" is an unacceptable means of verifying sales price information. An appropriate "Verification Source" would be an individual involved in some way in the transaction or, alternatively, a public record. On the "Above Grade Room Count" line of the Sales Comparison Grid, Respondent entered the following: Subject Property: 7 (Total); 4 (bdrms.); 3 (Baths). Comparable Sale 1: 7 (Total); 4 (bdrms.); 3 (Baths). Comparable Sale 2: 6 (Total); 3 (bdrms.); 2 (Baths). Comparable Sale 3: 8 (Total); 5 (bdrms.); 4 (Baths). Immediately to the right of the "Above Grade Room Count" entries for Comparable Sale 2, in the "+(-) $ Adjustment" column, Respondent entered "+3,000." Immediately to the right of the "Above Grade Room Count" entries for Comparable Sale 3, in the "+(-) $ Adjustment" column, Respondent entered "-3,000." On the "Gross Living Area" line of the Sales Comparison Grid, Respondent entered the following: Subject Property: 2,249 sq. ft. Comparable Sale 1: 1,496 sq. ft. Comparable Sale 2: 1,978 sq. ft. Comparable Sale 3: 2,000 sq. ft. Because its "Gross Living Area" was 753 square feet (or approximately one-third) less than that of the Subject Property, Comparable Sale 1 was "way too small in comparison to the Subject Property to [have] be[een] utilized as a comparable sale." Immediately to the right of the "Gross Living Area" square footage entered for Comparable Sale 1, in the "+(-) $ Adjustment" column, was the entry "+18,825." Immediately to the right of the "Gross Living Area" square footage entered for Comparable Sale 2, in the "+(-) $ Adjustment" column, was the entry "+6,775." Immediately to the right of the "Gross Living Area" square footage entered for Comparable Sale 3, in the "+(-) $ Adjustment" column, was the entry "+6,225." The upward adjustments Respondent made to the "comparables'" sales prices to account for the Subject Property's larger "Gross Living Area" amounted to $25 for each square foot that the "Gross Living Area" of the Subject Property exceeded that of the "comparables." Nowhere in the Report, or in Respondent's Work File, is there any indication of how or why Respondent selected this $25 a square foot price adjustment. While ISC NET/FARES provides "Gross Living Area" square footage information (that is gleaned from public records), MLX does not. In his appraisal of the Subject Property, Respondent appropriately used "Gross Living Area" square footage information from ISC NET/FARES for Comparable Sales 1 and 2; however, for Comparable Sale 3, rather than using the ISC NET/FARES "Gross Living Area" square footage (which was 1,512 square feet), he instead inappropriately relied on the square footage figure (2,000) for "Total Area" (which is different than "Gross Living Area") found in the MLX listing for the property. This was a substantial error negatively impacting the soundness of the adjustment he made for "Gross Living Area" to obtain an "Adjusted Sale Price" for Comparable Sale 3. The MLX listing for Comparable Sale 3 also contained the following "remarks": DON'T MISS THIS BEAUTY. PLENTY OF SPACE FOR THE IN-LAWS. CALL LISTING AGENT. CAN USE LIKE 2 IN LAWS AND MAIN HOUSE APPROXIMATELY 2000 SF. HOUSE HAVE 3 BEDROOMS 2 BATHS. YOU CAN USE 2 EFFICIENCIES AND THE HOUSE. HOUSE TOTALLY REMODELED NEW BATH, NEW KITCHEN. These "remarks" suggest that Comparable Sale 3 actually consisted of not one, but three separate dwelling units ("2 efficiencies" and a "main house"), contrary to the representation made by Respondent in the Report, and it therefore should not have been used as a "comparable" to appraise a single-family residence (which Respondent, in his Report, mistakenly represented the Subject Property to be). 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: $398,825; Comparable Sale 2: $396,775; and Comparable Sale 3: $393,225. At the end of the "Sales Comparison Approach" section (beneath the grid) was the following "Summary of Sales Comparison Approach": The subject property is similar to all of the comparable sales which were carefully selected after an extensive search in and out of the subject's defined market. This search consisted of analyzing numerous closed sales and narrowing the list down to the most similar. After close evaluation of the comparable sales utilized, equal consideration was given to all comparable sales in formulating an opinion of market value. Indicated Value by Sales Comparison Approach: $395,000. In arriving at this appraised "value" of $395,000, Respondent made no adjustments for the damage to the Subject Property's roof noted in the "Improvements" section of the Report or for the "4% seller contribution for closing costs" mentioned in the "Contract" section of the Report; neither did he provide an explanation as to why he had not made such adjustments. The first part of the "Reconciliation" section of the Report read as follows: Indicated Value by Sales Comparison Approach: $395,000; Cost Approach (if developed): $395,614; Income Approach (if developed): N/A Final reliance is given to the Sales Comparison Analysis due to the reliability of market data and which represents the motives of the typical purchaser [sic]. The Cost Approach although not as accurate, supports value. The Income Approach was not appropriate for this assignment. In developing his "Cost Approach" estimate of the market value of the Subject Property (referenced in the first part of the "Reconciliation" section), Respondent used a "replacement cost new" figure of $90 a square foot. There was nothing in the Report or Work File to support or explain his use of this figure. The second and final part of the "Reconciliation" section of the Report read as follows: This appraisal is made x "as is," _ subject to completion per plans and specifications on the basis of a hypothetical condition that the improvements have been completed, _ subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, or _ subject to the following required inspection based on the extraordinary assumption that condition or deficiency does not require alteration or repair: Subject to the Statement of Limiting Conditions and Appraiser's Certification attached. Based on a complete visual inspection of the interior and exterior areas of the subject property,[12] 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 $395,000, as of January 27, 2006, which is the date of inspection and the effective date of this appraisal. 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 or a one- unit property with an accessory unit . . . . * * * 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 . . . . The appraiser must, at a minimum: (1) 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 the appraisal for a mortgage finance transaction. INTENDED USER: The intended user of this appraisal report is the lender/client. * * * STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS: The appraiser's certification in this report is subject to the following assumptions and limiting conditions: * * * 2. 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 appraiser has noted in this appraisal any adverse conditions (such as needed repairs, deterioration, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the research involved in performing the appraisal. Unless otherwise stated in this appraisal report, the appraiser has no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied. The appraiser will not be responsible for any such conditions that do exist and for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. The appraiser has based his or her appraisal report and valuation conclusions for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that the completion, repairs, or alterations of the subject property will be performed in a professional manner. The fifth page 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," among other things: 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.[13] 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. No one else signed the Report, nor was any individual identified in the Report as having assisted Respondent. Appended to the Report was an pre-printed "Addendum," which read, in pertinent part, as follows: 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 [it] used as a basis for the value conclusion. The Reproduction Cost is based on published cost indexes, such as Marshall Valuation Service, and supplemented by the appraiser's knowledge of the local market. * * * 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. COST APPROACH The Cost Approach includes a land value analysis and the estimated replacement cost to construct, at current prices, a building with utility equivalent to the building being appraised, using modern materials, design, layout and current construction standards. Rates for the Cost Approach were calculated using Marshall & Swift Residential Cost Handbook. Physical, functional and external inadequacies, as measured in the market, are deducted accordingly. The "as is" value of site improvements (driveway, Landscaping, etc.). represents their market contributory value as measured by a paired sales analysis. The Cost Approach is considered a supportive indicator of value. The subject[] site['s] value has been derived from market abstractions techniques applied to improved land sales from the subject market area, land sales as well as analysis of assessed value. [S]ubject[] land['s] total value ratio is common for properties in the subject[] market area and does not adversely affect marketability and/or value. 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. * * * ADDITIONAL COMMENTS LIVING AREAS: The appraisal uses actual living area in the market analysis for both the subject and comparable sales properties. The living area utilized for the sales data has been abstracted from the Public Records/Tax Rolls listed square foot area data and may have been further modified by the field appraiser's observation of the actual improvements. DIGITAL PHOTOGRAPHS Digital photographs taken of the subject property and sales comparables were not enhanced or altered in any way, shape, or form. * * * ITEMS LEFT BLANK For the purpose of this appraisal report, an item left blank indicates this item does not apply to the subject property, indicates a (No or None) response, or indicates that the appraiser is not able to ascertain and/or is not qualified to furnish this information. * * * DATE OF APPRAISAL The date of the appraisal is the date of the last site inspection of the subject property. SUBJECT'S SKETCH All measurements of the subject's improvements have been rounded and the appraiser has tried to determine actual measurements as accurately as possible. This is not a survey and is not to be interpreted as a survey of the subject property. * * * The "sketch" of the Subject Property that Respondent appended to the Report did not accurately reflect the configuration and layout of the property, as of the effective date of the appraisal. On or about February 13, 2009, notwithstanding that Respondent had indicated in the Report (in the "Reconciliation" section thereof) that the appraisal was "made 'as is'" and not "subject to completion per plans and specifications," nor subject to any "repairs or alterations" being made, Respondent inexplicably issued an "Appraisal Update and/or Completion Report" (Supplemental Report) containing a "Certification of Completion," which read as follows: INTENDED USE: The intended use of this certificate of completion is for the lender/client to confirm that the requirements or conditions stated in the appraisal report referenced above have been met. INTENDED USER: The intended user of this certification of completion is the lender/client. HAVE THE IMPROVEMENTS BEEN COMPLETED IN ACCORDANCE WITH THE REQUIREMENTS AND CONDITIONS STATED IN THE ORIGINAL APPRAISAL REPORT? X Yes _ No If No, describe any impact on the opinion of market value. The subject property has been ready per plans and specifications. APPRAISER'S CERTIFICATION: I certify that I have performed a visual inspection on the subject property to determine if the conditions or requirements stated in the original appraisal have been satisfied. According to the Supplemental Report, Respondent conducted this "visual inspection" of the Subject Property on February 13, 2006. Contrary to the assertions made in the "Intended Use" and "Appraiser's Certification" sections of the "Certification of Completion," there were no "conditions" or "requirements" "stated in the original appraisal [report]." Any "plans and specifications" referenced in an original or updated appraisal report must be maintained in the appraiser's work file. Respondent's Work File contains no "plans and specifications," nor any other indication as to what, if any, post-Report repair or renovation work had been done on the Subject Property at the time of the issuance of the Supplemental Report.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Board issue a Final Order finding Respondent guilty of the violations alleged in Counts I through V of the Amended Administrative Complaint and revoking his residential real estate appraiser license. DONE AND ENTERED this 2nd day of November, 2009, 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 2nd day of November, 2009.
The Issue Petitioner's Administrative Complaint dated March 5, 1997, charges that Respondent, Barbara Cogan, obtained a license by means of knowingly submitting false information or engaging in misrepresentation in violation of Section 475.624(12), Florida Statutes. The issue for disposition is whether that violation occurred, and if so, what discipline is appropriate.
Findings Of Fact Respondent Barbara E. Cogan is a state-certified residential real estate appraiser, having been issued license no. 0002758 on or about April 22, 1996, pursuant to Chapter 475, Florida Statutes. Beverly Ridenauer is presently a complaint analyst, but previously was an administrative assistant in appraiser certification for the Department of Business and Professional Regulation (DBPR). As part of her duties at the time, Ms. Ridenauer reviewed Ms. Cogan's application for state certified residential appraiser in March 1996. The application on its face was complete and the requisite fee was attached. Ms. Cogan achieved the required hours of education and passed the state examination. Her application was, therefore, approved. In the meantime, Ms. Ridenauer, as required by law, commenced an audit of the work experience claimed by Ms. Cogan in support of her application for certification. In response to a letter request from Ms. Ridenauer, Ms. Cogan promptly submitted copies of appraisal reports that she had prepared in her pre- certification employment experience. The appraisal reports submitted by Ms. Cogan were all signed by Thomas M. Hayes, a state certified residential appraiser, with the additional notation "assistance by Barbara E. Cogan." In the course of her review, Ms. Ridenauer determined that Ms. Cogan had no real estate sales or broker's license, nor was she registered or certified as an appraiser. Ms. Ridenauer sent a memo to the DBPR complaint division because she deemed that the experience claimed by Ms. Cogan in the application process was invalid: qualifying appraisal experience may only be obtained when an individual is licensed to perform the appraisals. There are no false statements on Ms. Cogan's application. She did not claim any other professional licenses in Florida and she truthfully answered "no" to the question whether she had ever been registered, licensed, or certified in another jurisdiction. Nor did Ms. Cogan misrepresent her work experience. She did all of the work on the appraisals under the supervision of Thomas Hayes, with whom she worked for 2 and 1/2 years. She successfully completed the required appraisal education courses and was trained by Mr. Hayes. Neither Ms. Cogan nor Mr. Hayes had the slightest notion that Ms. Cogan was performing work for which she was not appropriately licensed. The appraisals signed by Mr. Hayes and submitted by Ms. Cogan to the agency as evidence of her experience include this statement in the appraiser's certification: I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any individual or individuals in the performance of the appraisal or the preparation of the appraisal report, I have named such individual(s) and disclosed the specific tasks performed by them in the reconciliation section of this appraisal report. I certify that any individual so named is qualified to perform the tasks. . . . (Petitioner's Exhibit no. 4, emphasis in original) The emphasized language in the above text of the certification was underlined by hand and an asterisk was placed in the margin. Below Mr. Hayes' signature and next to an asterisk is the notation acknowledging Ms. Cogan's assistance that is described in paragraph 4, above. When she took her appraisal education courses, Ms. Cogan observed that she was the only student who was not a registered appraiser. She asked her teacher if she had to be registered in order to get certified and he said, "no." Ms. Cogan also had obtained, and was thoroughly familiar with, a 2-sided sheet from the Department of Business and Professional Regulation, Division of Real Estate, titled "Essential Information for Real Estate Appraiser Applicants." The information sheet provides instructions for completing applications. It also describes the qualifications for registered appraiser (75 classroom hours of approved courses), licensed appraiser (75 classroom hours plus 2 years' experience in real property appraisal), certified residential appraiser (120 classroom hours plus 2 years' experience in real property appraisal), and certified general appraiser (165 classroom hours plus 2 years' experience in real property appraisal, including non-residential appraisal work). Ms. Cogan correctly noted that neither the information sheet nor her appraiser rules booklet states plainly that a candidate for certification as a residential appraiser must be first registered or licensed as an appraiser, a real estate salesperson, or a broker. When she was notified of the administrative complaint, she was thoroughly surprised and confused. She never intended to obtain her certification under false pretenses. While agreeing that the rules and statute are not perfectly clear, the agency contends that Chapter 475, Florida Statutes, requires that appraisals must be done by appropriately- licensed individuals. The agency concedes that Ms. Cogan did the work she claimed and that it was good, competent work. But for the fact that she was not registered or licensed when she did the work, Ms. Cogan is fully qualified for her residential real estate appraiser certificate.
Recommendation Based on the foregoing, it is RECOMMENDED: That the agency enter its Final Order dismissing the Administrative Complaint against Barbara Cogan. DONE AND ORDERED this 19th day of February, 1998, in Tallahassee, Leon County, Florida. MARY CLARK 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 Filed with the Clerk of the Division of Administrative Hearings this 19th day of February, 1998. COPIES FURNISHED: Steven W. Johnson, Esquire Department of Business and Professional Regulation Division of Real Estate Post Office Box 1900 Orlando, Florida 32802-1900 Barbara E. Cogan 3745 Oak Lane Melbourne, Florida 32934 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900
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.
