Findings Of Fact On December 6, 1979, Respondent was employed by The Keyes Company as a sales associate in its Cutler Ridge branch office and was so employed until March 12, 1981. Pursuant to a power of attorney, Andrew Kasprik manages property owned by his father and located at 9604 Sterling Drive, Miami, Florida. Kasprik and Respondent met in October, 1980, and entered into an oral agreement whereby Respondent would obtain a tenant for the house on Sterling Drive and Kasprik would pay him one-half a month's rent for his services. On October 6, 1980, Respondent leased Kasprik's property to John and Debbie Protko on a month-to-month basis at a rent of $650 per month, and Kasprik paid Respondent the agreed-upon commission of $325. The Keyes Company has no record of a listing for rental of property at 9604 Sterling Drive during October, 1980, and Respondent did not turn in to Keyes any funds received by him as a commission or fee for the rental of that property. Prior to March, 1981, Kasprik never dealt directly with Keyes and never signed a listing agreement with Keyes for the rental of the Sterling Drive property. By Notice of Hearing dated November 17, 1981, Respondent was given notice of the hearing in this cause as required by the applicable statutes and rules. Respondent's copy of that notice was not returned, and the undersigned has received no communication from Respondent regarding his attendance or nonattendance.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED THAT: A final order be entered finding Earnest Kelley guilty of the allegations in the Administrative Complaint filed against him and suspending Earnest Kelley's real estate salesman's license for a period of six months. RECOMMENDED this 19th day of February, 1982, in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of February,1982 COPIES FURNISHED: Theodore J. Silver Esquire 9445 Bird Road Miami, Florida 33165 Frederick H. Wilsen, Esquire Assistant General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Earnest Kelley 8640 S.W. 112th Street Miami, Florida 33156 Mr. Samuel R. Shorstein Secretary, Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Mr. Carlos B. Stafford Executive Director Board of Real Estate Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 =================================================================
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, including the Petitioner's proposed findings of fact and conclusions of law, 1/ the following relevant facts are found. By its two-count Administrative Complaint filed herein, the Petitioner, Board of Real Estate (herein sometimes referred to as the Board or the Commission) seeks to take disciplinary action against the Respondent and his license based on allegations that he caused to be placed a Notice of Lis Pendens on a parcel of property for the purpose of collecting a real estate commission in violation of Section 475.42(1)(d) and (j), Florida Statutes (1975), and Section 475.25(1)(e) and (j), Florida Statutes (1979). 2/ The credible evidence adduced herein reveals that Respondent 3/ was involved in a business transaction with Johnny Shaw, Jr., involving purchasing houses in distress situations and thereafter to resell by securing new buyers. There was no written contract between Johnny Shaw, Jr., and the Respondent evidencing the terms of their agreement. On October 20, 1976, Respondent, as purchaser, entered into a contract to purchase real property from Luleen Holthoefer (Respondent's Exhibit 3). At the time Respondent entered into the above contract, he was undecided as to whether he would in fact purchase the property. (Tr. 24 ) 4/ Shortly after entering into the contract, one Johnny Shaw, III, a salesman employed by Respondent, informed Respondent that Mr. Shaw's father, Johnny Shaw, Jr., had some funds he would like to invest. (Tr. 24.) As stated, Respondent's agreement with Johnny Shaw, Jr., was verbal. Shaw, Jr., purchased the Holthoefer property solely with his own funds. (Tr. 28-29.) Respondent, in furtherance of the agreement, initially located property for sale and, after the property was purchased, would attempt to resell it. The agreement provided further that the profits realized from the resale of the property would be split equally between Respondent and Shaw, Jr. (Tr. 29.) The Holthoefer property was conveyed by warranty deed exclusively to Johnny Shaw, Jr., on November 3, 1976. (Petitioner's Exhibit 7.) Respondent thereafter retained legal counsel to represent him in his effort to secure his entitlement to his claimed one-half interest in the Holthoefer property. To that end, on or about May 27, 1977, a Notice of Lis Pendens was recorded in the public records of Broward County, Florida. (Testimony of Respondent and Petitioner's Exhibit 4; Tr. 23-24.) The property to which the Notice of Lis Pendens was filed was the Holthoefer property. The property was, at the time, still owned by Johnny Shaw, Jr. After the Notice of Lis Pendens was filed, Johnny Shaw, Jr., filed a suit in the Circuit Court for Broward County, Florida, alleging that the Respondent had filed a Notice of Lis Pendens knowingly, wrongfully and maliciously. (Petitioner's Exhibit 5.) In response to the complaint, Respondent, by and through counsel, filed a counter claim, alleging that the Respondent was due a real estate sales commission in the aforesaid transaction because he was a real estate broker, worked for a living on a real estate commission basis, and had not been paid any commission for securing the ultimate sale of the property to Johnny Shaw, Jr. The counter claim demanded judgment for a sales commission, plus interest. (Petitioner's Exhibit 5.) THE RESPONDENT'S DEFENSE The Respondent contends that his former attorney, Clyde Manspeaker, filed the Notice of Lis Pendens out of negligence; that Shaw, Jr., and his former counsel (Manspeaker) were in collusion and had ulterior motives in filing the subject Notice of Lis Pendens. He contends further that Shaw, Jr., hired his former attorney to represent him and that there was a conflict of interest between counsel based on the fact that Shaw, Jr., was providing him with much more lucrative legal defense work than himself. Respondent further contends that the Notice of Lis Pendens was filed for a share of the profit and not for a real estate commission as alleged herein. Respondent admits that there was no written agreement between himself and Shaw, Jr., and that he did not advance any money to purchase the property. He states, however, that he intended to purchase the property, and, as far as he was concerned, the purchase was handled as a joint venture.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby recommended that the Respondent's Arlen G. Steinke, real estate broker's license number 0084541 be suspended for a period of one (1) year. RECOMMENDED this 18th day of March, 1983, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of March, 1983.
The Issue Respondents are charged with misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in violation of Section 475.25(1)(b), Florida Statutes; failure to account or deliver funds in violation of Section 475.25(1)(d), Florida Statutes; and failure to maintain trust funds in the real estate brokerage escrow bank account or some other proper depository until disbursement is properly authorized, in violation of Section 475.25(1)(k), Florida Statutes, as more specifically set out in the following Conclusions of Law.
Findings Of Fact Petitioner is the state agency charged with the responsibility and duty to prosecute administrative complaints, pursuant to Section 20.165 and Chapters 120, 455, and 475, Florida Statutes. At all times material, Respondent Mary Lawhon was a licensed Florida real estate broker, issued license numbers 607847 and 3028674 in accordance with Chapter 475, Florida Statutes. Respondent Shell Point Realty, Inc., is, and at all times material was, a corporation registered as a Florida real estate broker having been issued license number 1005003 in accordance with Chapter 475, Florida Statutes. At all times material, Respondent Mary Lawhon was licensed and operating as qualifying broker and officer of Respondent Shell Point Realty, Inc. Neither Respondent has previously been prosecuted for license violations, although an Agency investigator's administrative fine of $100.00 for a minor technical violation was imposed several years ago. Between 1996 and 2002, Respondents were paid real estate commissions for the purchase or sale of several Wakulla County properties by Gerd Petrik, or his business, Stone Real Estate Holdings, Inc. For each of these transactions, there was a contract, whereby Respondents' real estate brokerage commission was based on the price of each property as disclosed before sale in the written listing agreement with the seller(s). Mr. Petrik is a foreign national residing in the United States on an investment visa. He lives in Sarasota, Florida. He "owns" several corporations,2/ and, through them, he owns at least 40 properties in the Panhandle of Florida, including a golf course and six rental houses in Wakulla County. One of these rental houses is located at 111 Razorback Road in Crawfordville. Mr. Petrik, or a corporation in which he is majority stockholder, owner-financed, by mortgage, one of the buildings from which Ms. Lawhon conducts Shell Point Realty, Inc.'s business. As an outgrowth of their real estate sales transactions, Mr. Petrik came to respect and value Ms. Lawhon's real estate skills and business acumen. He also appreciated her position and prestige in the community as the former Wakulla County Administrator. Until the incidents giving rise to this case occurred, Mr. Petrik found Ms. Lawhon to be professional and competent in real estate matters and honest and truthful. Mr. Petrik admits that he has lost no money as a result of the incidents giving rise to this license disciplinary proceeding. There has never been a written contract imposing any duty on Respondents to Mr. Petrik with regard to his six rental houses in Wakulla County, or with regard to the 111 Razorback Road property in particular. Having reconciled the witnesses' respective testimonies to the degree possible, and having assessed their respective versions upon credibility factors, it is found that Respondents were never retained or expected by Mr. Petrik to rent, lease, or manage any of his six rental houses in Wakulla County, including the 111 Razorback Road property. Respondents also did not advertise any rental properties, solicit any renters, put up any "for rent" signs, or charge any real estate or management fees to Mr. Petrik or his businesses in connection with the rentals of Mr. Petrik's properties. However, with an eye to promoting further profitable real estate sales dealings with Mr. Petrik, Ms. Lawhon gratuitously facilitated Mr. Petrik's renting his Wakulla County houses. To this end, she regularly communicated by telephone and fax with Mr. Petrik's business manager, Wendy Freed, concerning showing the properties, rent to be charged, and creation or signing of leases. At all times material, Wendy Freed worked in Mr. Petrik's office in Sarasota, as business manager for Stone Management Inc., one of Mr. Petrik's corporations. Stone Management, Inc., owns Stone Real Estate Holdings, Inc. Ms. Freed believed that Stone Real Estate Holdings, Inc., owned 111 Razorback Road, Crawfordville. Apparently no one involved in this case knew that in October 2001, 111 Razorback Road was owned by Newhouse, Inc.3/ The evidence is not clear who or what entity owned the property in March 2002. Regardless of which entity actually owned any of the rental houses, Ms. Freed, Ms. Lawhon, and Mr. Petrik all believed Ms. Freed had Mr. Petrik's complete authority to handle the rentals and to manage everything in connection with the six Wakulla County rental houses, including 111 Razorback Road. Ms. Freed possesses no real estate or other professional licenses. Her entire training for management or leasing of real estate has been "on the job" training with Mr. Petrik. As of October 2001, she possessed only about a year and a half of such training. She keeps track of multiple rentals and other property management factors without any modern property management software. She uses only an Excel spreadsheet. Despite Ms. Freed's testimony to the contrary, it is found that Ms. Lawhon is credible that Ms. Lawhon only collected rent money for Mr. Petrik, or for any of Mr. Petrik's businesses, upon Ms. Freed's specific request, until the incidents giving rise to this case; that all leases for Mr. Petrik's rental properties were usually prepared by Ms. Freed, although on occasion, Ms. Lawhon had prepared a lease for Ms. Freed to use, based on the Tallahassee Board of Realtors' Standard Form; and that usually, after one of Mr. Petrik's houses had been leased, Ms. Freed dealt directly with the lessee, unless she dealt with the lessee through Mr. or Mrs. Alward. At all times material, Kay Alward and Chris Alward, husband and wife, were employed by Mr. Petrik. They were not sure whether they were paid through Stone Management, Stone Real Estate Holdings, Inc., or Stone Management Enterprises. Mrs. Alward had been Mr. Petrik's housekeeper, and Mr. Alward had been his gardener, in Sarasota. Mr. Alward had also personally invested in Wakulla County real estate. For awhile, the Alwards assisted Ms. Freed in managing Mr. Petrik's properties in Wakulla County, by traveling to and from Wakulla County. Ultimately, they moved to Wakulla County to live and manage his properties. During the material period of time, they employed a man named "Greg" to steam clean decks, fix toilets, and be a general handyman for Mr. Petrick's Wakulla County rental properties. Before returning to Sarasota on one occasion, Mr. Alward left with Ms. Lawhon a key for 111 Razorback Road. She understood from him that workmen might need the key to get into the house for repairs and cleaning. Sometime thereafter, on or about October 12, 2001, Lorra Shepard, a local Certified Public Accountant, walked into Respondents' real estate office, because a friend of hers worked there, and asked if they had any rentals. She was shown the 111 Razorback Road property. She asked Ms. Lawhon if she could rent it, and Ms. Lawhon told her the lessor wanted $675.00 per month. Ms. Shepard asked if they could come down on the price. Ms. Lawhon testified that she telephoned Ms. Freed on October 12, 2001, and asked Ms. Freed to lower the rent for Ms. Shepard; that Ms. Freed agreed to lower the rent to $635.00 per month and agreed to draw the lease; that she, Ms. Lawhon, relayed this information to Ms. Shepard; that Ms. Shepard agreed to rent the house at that price; and that Ms. Lawhon then telephoned Ms. Freed again with this information and finally faxed written information about Ms. Shepard to Ms. Freed, so that Ms. Freed could draft the lease and collect subsequent rents. This testimony is credible.4/ Ms. Lawhon and Ms. Shepard concur that Ms. Shepard moved into 111 Razorback Road on October 15, 2001, and that day, Ms. Lawhon accepted a $450.00 cash deposit from Ms. Shepard and provided Ms. Shepard with a signed receipt, setting out the monthly rent of $635.00 per month, and signing the receipt with Ms. Lawhon's own name. Ms. Shepard is clear that at no time did Ms. Lawhon tell her 111 Razorback Road was Ms. Lawhon's house or suggest that Ms. Shepard hide her occupancy. Rather, Ms. Shepard confirms Ms. Lawhon's testimony that Ms. Lawhon told her that the lessor would be sending a lease and that the lessor was Mr. Petrik. Ms. Shepard's testimony also suggests that in October 2001, she thought Ms. Lawhon was saying that Ms. Lawhon would deliver the lease and that when Ms. Shepard signed the lease, she and Ms. Lawhon, together, would work out whether rent would be paid on the 15th or 31st of each month. Even if it were credible that Ms. Freed had told Ms. Lawhon to retain the $450.00 cash deposit, and this portion of Ms. Lawhon's testimony does not ring entirely true, there is no evidence that Ms. Lawhon timely placed the $450.00 cash in an escrow or trust account. It also was not remitted directly to Mr. Petrik or Ms. Freed in October 2001. On the other hand, there is no evidence that it was deposited into any account in Respondents' name(s). It is unclear from Ms. Lawhon's hearing testimony what, exactly, happened to the $450.00 cash deposit, but she admitted to the Agency investigator in June 2002 that she had put it in a file and forgotten about it, and this explanation is accepted. At no time material did Ms. Freed or Ms. Lawhon prepare a lease for 111 Razorback Road. At no time material did either of them send or deliver a lease to Ms. Shepard. Ms. Shepard testified credibly that several times between October 2001 and March 2002, Ms. Lawhon told Ms. Shepard that she, Ms. Lawhon, still had no lease and would call the lessor again. Ms. Lawhon did not address this aspect of Ms. Shepard's testimony in her own testimony. Ms. Lawhon testified that she thought Ms. Freed would deal directly with Ms. Shepard about all aspects of the lease and collecting rent. She also admitted that she had never discussed 111 Razorback Road with Ms. Freed in any of their frequent telephone conversations between October 15, 2001 and March 2002. Upon this evidence and Finding of Fact 24, it is found, contrary to Ms. Lawhon's hearing testimony, that Ms. Lawhon was, in fact, expecting to receive a lease from Ms. Freed and planned to then deliver that lease to Ms. Shepard for execution, but Ms. Lawhon never followed up on Ms. Shepard's request for a lease. Having no lease to guide her, Ms. Shepard did not make out checks for rent in thirty-day increments, beginning in October or November 2001. Instead, she contemporaneously made out a check dated December 21, 2001, for $1,905.00, to "Petrick" for the rent. She contemporaneously made out a check dated December 26, 2001, for $317.50, to "Petrick" for the rent. She contemporaneously made out a check dated February 7, 2002, for $952.00, to "Petrick" for the rent. She expected Ms. Lawhon to pick up these checks, but no one picked them up. Accordingly, Ms. Shepard just left these three checks, totaling $3,174.50, in her office desk drawer and went about her business until March 26, 2002. Mrs. Alward ran some advertisements for Mr. Petrik's rental houses in December 2001. Ms. Lawhon testified that she told Mrs. Alward in December 2001 not to advertise 111 Razorback Road because it was rented. Mrs. Alward was not asked to confirm or deny that conversation occurred, and Mrs. Alward's testimony at hearing does not specifically rule out that she advertised 111 Razorback Road. However, Mr. Alward's deposition and the testimony of Mr. Weltman reveal that in January 2002, the Alwards were managing all rental arrangements by referral to Ms. Freed. In January or February 2002, a maintenance person steam-cleaned the deck at 111 Razorback Road. The maintenance person was never seen by Ms. Shepard, but the maintenance person clearly knew someone was occupying the house because s/he left a note for Ms. Shepard to confine her dogs so the steam cleaning could be done the next day. Ms. Shepard assumed the steam cleaning was done at Ms. Lawhon's direction, but she did not contact Ms. Lawhon about it. Ms. Lawhon did not arrange this service and knew nothing about it. Based on the testimony of Ms. Freed, Mr. and Mrs. Alward, and Mr. Weltman, it is probable "Greg" did this steam cleaning at the Alwards' direction, but Ms. Freed takes no responsibility for it. Upon Findings of Fact 28-29, it is only reasonable to assume that the Alwards had notice that 111 Razorback Road was rented and occupied as of December 2001-January 2002, and their knowledge as of those dates can be imputed to Ms. Freed. On March 26, 2002, Ms. Shepard personally delivered to Ms. Lawhon the three rent checks she had previously written to "Petrick," on December 21, 2001, December 26, 2001, and February 7, 2002, totaling $3,174.50.5/ Ms. Shepard then returned to her office, and on March 29, 2002, she delivered to Ms. Lawhon a last check for $317.50, dated March 26, 2002, and payable to "Stone Real Estate Holdings." The undisputed evidence reveals that on March 29, 2002, Ms. Lawhon signed the first three checks as "Petrik" and deposited them under the stamped endorsement of "Shell Point Realty," into Shell Point Realty, Inc.'s, operating account. She did not deposit them into an escrow account for Mr. Petrik or into Respondents' trust account. The March 29, 2002, deposit complied with Agency rules, in that it was made "immediately" (within three business days or less) of Respondents' receipt of the funds. It did not comply with Agency rules in that it was not deposited in a trust, escrow, or other specifically designated account for Mr. Petrik's benefit. Mr. Petrik and Ms. Freed maintain that Ms. Lawhon was not authorized to endorse the checks with Mr. Petrik's name. The average daily balance of Respondents' operating account at the time Ms. Lawhon deposited Ms. Shepard's first three rent checks was over $54,000.00. There appears to be no financial motivation for Respondents to play fast and loose with the relatively minor amounts of money involved in this case. At hearing, Ms. Lawhon had several explanations for her handling Ms. Shepard's first three checks as she did: that she thought she had received permission for this procedure in a phone conversation with Ms. Freed on March 26, 2002; that Mr. Petrik had allowed herself or Mr. Alward to sign closing and disclosure documents (but not negotiable instruments or checks) for him in the past, as a matter of convenience; and that she was afraid because Ms. Shepard's checks were stale and incorrectly made out (to "Petrick" instead of "Petrik," and not to "Stone Real Estate Holdings"), they also might not be any good. She testified that her thinking was that she should run Ms. Shepard's local checks through her own local bank to be sure they were valid. She maintained that she had intended to run the checks through Respondents' trust account but deposited them into the wrong account by accident. Although Respondents' telephone records show communication with Ms. Freed's telephone on March 26, 2002, it is noted that Ms. Lawhon's explanation that she had received permission from Ms. Freed that day was never put forth prior to her testimony at the disputed-fact hearing. (See Findings of Fact 44-45 and 51-52.) March 29, 2002, was a Friday. On Monday, April 1, 2002, Ms. Lawhon telephoned her bank and verified that Ms. Shepard's three checks had cleared. That same day, Ms. Lawhon used an overnight delivery service to send Ms. Freed Shell Point Realty, Inc.'s, check for $2,355.00, made out to "Stone Real Estate Holdings." The April 1, 2002, Shell Point Realty, Inc., check specified, on its memo line, that it covered "$635/mo. Jan. 02-April 15 + 450 dep." This amount would have been correct at $635 per month for only three months' rent (January-March 2002) plus a $450.00 deposit. However, it was the wrong amount, considering the 75-day period of October 15, 2001 to January 1, 2002. This check also was $819.50 short of the total amount of Ms. Shepard's first three checks, which Ms. Lawhon had received and negotiated in the names of Petrik/Shell Point Realty, Inc. Ms. Lawhon's testimony did not address when she sent Ms. Shepard's March 26, 2002, check for $317.50, which had been correctly made out to "Stone Real Estate Holdings," to Ms. Freed. Ms. Freed believed she had received this check a week after the April 1, 2002, mailing. However, because this fourth check, received by Ms. Lawhon on March 29, 2002, is also referenced on the memo line of the April 1, 2002, Shell Point Realty, Inc., check, it may be inferred that Ms. Shepard's last check also was sent to Ms. Freed in Ms. Lawhon's April 1, 2002, overnight package. Ms. Lawhon was overwrought on April 1, 2002. She had received a telephone call to come to Louisiana to care for her grandchildren because her daughter-in-law was terminally ill. The last thing she did before leaving Crawfordville, Florida, on that date was to calculate the rents, make out the Shell Point Realty, Inc., check, and send the two checks by overnight delivery to Ms. Freed. Except for returning for less than 24 hours covering part of the following Saturday and Sunday, April 6-7, 2002, to play piano in her church on Sunday, Ms. Lawhon did not return to Florida until Friday, April 12, 2002. April 12, 2002, was Ms. Lawhon's first day in the Shell Point Realty, Inc., office since April 1, 2002. That afternoon, she received a phone call from Mr. Petrik's attorney. She told him her reasons for signing Ms. Shepard's three stale checks as "Petrik" and depositing them. He said he did not think that Ms. Freed had received the whole amount owed by Ms. Shepard. Ms. Lawhon asked him to give her until Monday to recalculate and figure out what had happened. On Monday, April 14, 2002, Ms. Lawhon telephoned Mr. Petrik's attorney and admitted that she had miscalculated the rental amounts collected on March 26-29, 2002, and that she would be sending Mr. Petrik the balance owed. At the attorney's suggestion, she wrote a letter of apology to Mr. Petrik. Ms. Lawhon's April 15, 2002, letter to Mr. Petrik reads, in pertinent part: I hardly know where to begin except to say to you 'I offer my most humble apology concerning the checks from Lorra Shepard.' . . . Since the checks were so old, I signed the back and deposited three of them to make sure they would clear the bank. There was no intention to mislead any one [sic] or to take the money. I had sent the completed lease without her signature and the deposit to your office in December. I assumed you received the lease and would follow through with notification to Ms. Shepard about payment and signature of lease. Your office apparently did not receive my letter and I failed to follow up until I got a call from Wendy a few weeks ago telling me that your office had not received any rent payments. Since the checks were so old and I had signed closing papers, applications for permits, etc. for you in the past, I signed the checks and deposited them in the Shell Point Realty account. On the date that I found out that they had cleared, I ran by the office on my way out of town to write out the check to Stone Real Estate Holdings and figured the wrong amount. Enclosed is check # 3459 for the balance of the rent and Check # 3463 for the deposit . . . . (Emphasis supplied) The emphasized portions of her letter, concerning transmittal to Ms. Freed of the $450.00 deposit, contradict each other, and the information in Ms. Lawhon's letter about her sending a blank lease to Ms. Freed in Sarasota in October 2001, is contrary to Ms. Lawhon's testimony at the disputed-fact hearing and contrary to part of Ms. Freed's deposition testimony. It is further noted that Ms. Lawhon did not mention in this April 15, 2002, letter to Mr. Petrik that she had received permission from Ms. Freed in March 2002 to endorse and deposit the first three checks. It is undisputed that Ms. Lawhon mailed to Ms. Freed a Shell Point Realty, Inc., operating account check for $820.00, dated April 14, 2002, made out to "Stone Real Estate Holdings." This was intended to make up the difference as calculated from Ms. Shepard's first three checks. (See Finding of Fact 38.) It also is undisputed that on April 15, 2002, Ms. Lawhon mailed to Ms. Freed a Shell Point Realty, Inc., operating account check for $450.00, of the same date, made out to "Stone Real Estate Holdings." Apparently, this reflected the amount of the cash deposit Ms. Shepard had given Ms. Lawhon on October 15, 2001. Ms. Lawhon's explanation at the disputed-fact hearing for sending two checks on April 15, 2002, was that she had miscalculated again. With the last check, Respondents satisfied all of what was owed to Mr. Petrik and cleared any discrepancies in their professional accounts within 30 days, as required by Agency Rule. The Agency's June 2002 audit of Respondents' accounts for the material period of time found them to be substantially in compliance with all regulations and general bookkeeping standards for real estate personnel. Ms. Lawhon did not represent to the Agency investigator in June 2002 that she had been given permission by Ms. Freed on March 26, 2002, to sign three of Ms. Shepard's checks with Mr. Petrik's name, but otherwise, her admissions to the investigator are consistent with her explanation at the disputed-fact hearing that Mr. Petrik had allowed people to sign documents (not negotiable instruments or checks) for him in the past as a matter of convenience, and that she was afraid because Ms. Shepard's three checks were stale and incorrectly made out, they also might not be any good. (See Finding of Fact 36.) Telephone bills show there was communication between Respondents and Ms. Freed on March 26, 2002. However, due to what appears to be Ms. Lawhon's recent fabrication that she received oral permission from Ms. Freed on March 26, 2002, to endorse Mr. Petrik's name on Ms. Shepard's first three checks, the portion of her testimony claiming that Ms. Freed gave her permission to endorse those checks in Mr. Petrik's name is not credible. Ms. Lawhon's April 15, 2002, letter (see Finding of Fact 44) constitutes an admission, as well as a statement inconsistent with her testimony at the disputed-fact hearing, in that her letter stated that she did not realize that she had "failed to follow up" concerning the 111 Razorback Road rental until she received a phone call from Ms. Freed. It is significant that Ms. Lawhon's letter states Ms. Freed called Ms. Lawhon first. There is no direct evidence as to why Ms. Shepard chose March 26, 2002, to deliver her three stale checks to Ms. Lawhon or why she made the last check payable to "Stone Real Estate Holdings," the Petrik corporation with which Respondents had an on-going commission sales relationship, but it may be inferred therefrom that it was on March 26, 2002, that Ms. Freed inquired of Ms. Lawhon why she was not receiving rental checks and why she had no lease if the 111 Razorback Road property were occupied. Ms. Freed testified that Respondents failed to remit any of Mr. Petrik's funds due until Ms. Freed first contacted Ms. Lawhon and requested the rent proceeds, and that when contacted by Ms. Freed, Ms. Lawhon initially told Ms. Freed that she had placed Ms. Shepard in 111 Razorback Road in January 2002. The Agency suggests that this representation to Ms. Freed by Ms. Lawhon, together with Ms. Lawhon's remitting only $2,355.00 on April 1, 2002, with the January to March memo on that check, amounts to Respondents' intentional misrepresentation of the amount due Mr. Petrik. Ms. Freed also testified that she later discovered from Ms. Shepard that, in fact, Ms. Shepard had been in possession of 111 Razorback Road since October 2001, and, therefore, Ms. Freed realized that the total amount due Mr. Petrik was higher than the amount represented and remitted by Ms. Lawhon on April 1, 2002. On this basis, the Agency asserts that Respondents remitted the additional funds on April 15, 2002, only after Ms. Freed had confronted Ms. Lawhon concerning her misrepresentation. Unfortunately, Ms. Freed's version of events is not entirely credible for the following reasons: Ms. Freed testified that she knew 111 Razorback was vacant in October 2001, but did not know from October 2001 to March 2002 that it was occupied/rented. She also testified that during this period she made no effort to rent that house. This suggests that either she was not doing her job or she knew on some level in October 2001 that the property was already rented. Ms. Lawhon's notification to Mrs. Alward that it was rented in December 2001 is unrefuted, and Mr. Alward testified that approximately January 2002, he and his wife had notified Ms. Freed that someone was living in the house. Against all this, Ms. Freed testified that she had learned of the occupancy of 111 Razorback Road from the Alwards in March 2002 and from Ms. Lawhon. She further testified that when she first talked to Ms. Lawhon in March, Ms. Lawhon said she had previously sent Ms. Freed her own check and would have to determine if that check had cleared.6/ Finally, Ms. Shepard is very clear that when Ms. Freed contacted her, Ms. Freed did not dispute the $635.00 (as opposed to $675.00) per month rental amount.7/ While Ms. Freed's accepting the lesser amount is not absolute proof, it is, with all the other evidence, an indicator that she had previously approved that amount when Ms. Lawhon telephoned her in October 2001. Given the somewhat naïve and confused property management process in Sarasota, including Ms. Freed's ignorance that Newhouse, Inc. actually held title to the property, Ms. Freed's assessment of an intentional misrepresentation by Respondents is not persuasive. It is undisputed that Ms. Lawhon did not correct the discrepancy of $1,270.00 until April 15, 2002, after Mr. Petrik's lawyer (not Ms. Freed) contacted her, but she did resolve the issue by the next business day after she was alerted that there might be an error. As to the issues of whether or not Ms. Lawhon made a willful oral misrepresentation to Ms. Freed on March 26, 2002, or on the April 1, 2002, Shell Point Realty, Inc., check as to how long Ms. Shepard had occupied 111 Razorback Road or was willfully withholding funds on April 1, 2002, it is more significant that from the very beginning of this series of events on October 15, 2001, Ms. Lawhon told Ms. Shepard to make out her checks to Mr. Petrik and that none of Ms. Shepard's checks were ever in Respondents' possession until March 26, 2002. Therefore, together with Ms. Lawhon's overwrought state of mind on April 1, 2002, it is not clear whether there was a willful misrepresentation, a misunderstanding, a miscommunication, or a miscalculation with regard to the first transmittal of only part of the rental funds on April 1, 2002, and the time line is not so clear that Ms. Freed's and the Agency's sinister construction of Ms. Lawhon's communications and calculations can be the only construction. Without the Agency's sinister construction of events, there is only clear and convincing evidence that Ms. Lawhon undertook, without expectation of a direct real estate commission, to rent 111 Razorback Road for Mr. Petrik, regardless of what entity actually held title thereto. In doing so, she undertook a fiduciary relationship with him and Ms. Shepard. In this capacity, she received a $450.00 cash deposit, which she retained for over five months without clear authority to retain it, and she did not timely deposit it in a trust or other appropriate account for Mr. Petrik's benefit. She did not follow up on getting a lease executed by the parties, which, based on hers and Ms. Freed's prior course of dealing, Ms. Freed could have reasonably expected and which Ms. Shepard clearly did expect. When Ms. Freed inquired about the matter in March 2002, Ms. Lawhon, to her credit, tried to resolve the matter quickly and appropriately. However, in the course of resolving it, she did not get an executed lease as expected; she endorsed checks made out to Mr. Petrik without clear authority to do so; she did not deposit funds from those checks into an appropriate account; and she repeatedly miscalculated amounts due and remitted incorrect amounts to Mr. Petrik, via Ms. Freed. She also did not discover her errors on her own, but had to be alerted by the lawyer on April 12, 2002. While I detect no dishonest intent, nor any intent to permanently convert any funds to her personal use, the fact that Ms. Lawhon ultimately transmitted to Mr. Petrik the full amount due is not particularly to her credit, since her actions--or lack of action--had the effect of depriving Mr. Petrik of the use of a portion of those funds for nearly six months.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Real Estate Commission enter a final order which: Finds Respondents Mary Lawhon and Shell Point Realty, Inc., guilty of Section 475.25(1)(k), Florida Statutes, Counts III and VI, respectively, of the Administrative Complaint; Provides as a penalty for Mary Lawhon the payment of a $1,000.00 fine and five months' suspension of her licenses; Provides as a penalty for Shell Point Realty, Inc., a reprimand; and Dismisses Counts I, II, IV, and V of the Administrative Complaint. DONE AND ENTERED this 21st day of April, 2003, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS 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 21st day of April, 2003.
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.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Department is the state agency charged with licensing and regulatory authority over real estate licensees. At all times material to this case, Respondent has been licensed as a real estate broker in the State of Florida and was registered as a broker- salesman in the employ of Ideal Real Estate of Central Florida, Inc. (Ideal). Respondent's license number is 0057458. On or about August 23, 1990, Respondent prepared a contract for the sale and purchase of real estate which identified Michael P. Ernst and Lauren B. Cameron as the buyers of a property located in Deltona Lakes Subdivision. The contract executed by the buyers specified an acceptance date of August 25, 1990, and indicated a sales commission in the amount of 7 percent of the gross purchase price would be paid by the sellers. Subsequently, Respondent met with the property's listing agent and made two changes to the contract. The first change altered the commission to 8 percent which was in accordance with the listing agreement. The second change altered the time for acceptance from August 25, 1990, until August 30, 1990. The buyers did not initial the changes, did not verbally authorize the changes, and did not, by their subsequent conduct, ratify the changes. The Respondent did not return a copy of the contract to the buyers until several weeks later. It was then that they learned of the alterations noted above. Since they had become dissatisfied with the purchase prospect, the buyers elected to terminate the transaction. Ultimately, after conflicting demands and differences were resolved, the buyers received a refund of the $2000.00 deposit they had put down on the deal at the time they made the offer. When the Respondent's broker learned of the alterations to the contract, Respondent was terminated from employment with Ideal. Respondent's position has been that the changes made did not adversely affect the buyers since they were not obligated to pay the sales commission and since the extension of the time for acceptance was required to give the out-of- state sellers an opportunity to review the offer. In fact, the sellers did not accept the offer until August 29, 1990.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Florida Real Estate Commission enter a final order finding the Respondent guilty of having violated Section 475.25(1)(b), Florida Statutes, imposing an administrative fine in the amount of $1000, and suspending Respondent's license for a period of six months. DONE and ENTERED this 24th day of October, 1991, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of October, 1991. APPENDIX TO RECOMMENDED ORDER RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 6, 8 through 11, 14 and 15 are accepted. Paragraph 7 is rejected as contrary to the weight of the evidence or irrelevant. The sellers were obligated to pay a commission to cooperating brokers in the amount of 8 percent. With regard to paragraph 12 it is accepted that the Respondent's broker fired him when he discovered the alterations to the contract; otherwise rejected as irrelevant. Paragraph 13 is rejected as irrelevant. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: None submitted. COPIES FURNISHED: Darlene F. Keller Division Director Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe, Suite 60 Tallahassee, Florida 32399-0792 James H. Gillis Senior Attorney Department of Professional Regulation, Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801-1772 William M. McCoy 1918 Alameda Drive Deltona, Florida 32738-4869
