The Issue The issues presented are whether Respondent reviewed the appraisal report of an assistant appraiser in a manner that departed from the standards of care in Subsections 475.624(14), and (15), Florida Statutes (2001); and, if so, what penalty should be imposed against Respondent's professional license.
Findings Of Fact Petitioner is the state agency authorized to regulate certified general real estate appraisers (appraisers) and assistant appraisers pursuant to Chapter 475, Part II, Florida Statutes (2001). Respondent and Ms. Deborah Hall are certified appraisers pursuant to certificate numbers RZ-1589 and RD-4615. On April 5, 2002, Respondent operated an appraisal business located at 1727 Coachman Plaza Drive, Clearwater, Florida. Respondent supervised approximately 14 assistant appraisers, including Ms. Hall.1 Ms. Hall was certified as an assistant appraiser pursuant to certification number RI-5557.2 Ms. Hall developed a written appraisal report for residential real estate located at 7415 Flounder Drive, Hudson, Florida. Respondent reviewed the appraisal report and cosigned it with Ms. Hall before she communicated it to the client. The appraisal report complied with all applicable standards of practice except one. The appraisal report included incorrect values for three comparable properties. The correct closing prices of the three comparables were $73,000, $74,000, and $82,000. The appraisal report included erroneous closing prices of $110,000, $116,000, and $110,000; and inadvertently inflated the appraised value. Omission of the comparable values from the appraisal report was a substantial error. The error significantly affected the appraisal according to statutorily adopted Uniform Standards of Professional Appraisal Practice, Appraisal Standards Board, The Appraisal Foundation, 2002 ed. (USPAP), Standards Rule 1-1(b), at page 15. (The terms USPAP and "appraisal standards" are used synonymously and the abbreviation "SR" refers to a specific Standards Rule, such as SR 1-1(b)).3 The "workfile" developed by Ms. Hall contained the correct closing price for each comparable. The term "workfile" is defined in USPAP, Definitions, at page 5. A workfile consists of the "documentation necessary to support an appraiser's analysis, opinions, and conclusions."4 The omission of the correct comparable values from the appraisal report could not be discovered without reviewing the "workfile" developed by Ms. Hall. It is undisputed that Respondent did not include the workfile in his review of the appraisal report; and that the workfile was located in the appraisal office and was readily accessible. Petitioner alleges the omission of the workfile from Respondent's review of the appraisal report violated statutorily adopted appraisal standards as well as the statutory requirement to exercise reasonable diligence in Subsections 475.624(14) and (15), Florida Statutes (2001) (the relevant statutes). The parties agree no express requirement existed for Respondent to review the workfile. SR 2-3 discusses the standard of care applicable to the supervision of assistant appraisers. In relevant part, the standard states: When a signing appraiser(s) has relied on work done by others who do not sign the certification, the signing appraiser is responsible for the decision to rely on their work. The signing appraiser(s) is required to have a reasonable basis for believing that those individuals performing the work are competent and that their work is credible. SR 2-3, USPAP at 30-31. Respondent did not rely on work done by an assistant appraiser who did not sign the appraisal report. Ms. Hall signed the appraisal report as the "Appraiser." Respondent signed the appraisal report as the "Supervisory Appraiser." On April 5, 2002, Respondent had a reasonable basis, within the meaning of SR 2-3, to believe that Ms. Hall was competent and that her work was credible. Ms. Hall had sufficient experience and demonstrated proficiency to develop and communicate the appraisal report without the need for Respondent to review her workfile. Ms. Hall began appraising real estate in 1979 and had been a certified appraiser in several states. On April 5, 2002, she was certified in Florida and New York, had worked for Respondent for approximately three years, and had completed over 100 appraisals for Respondent. Ms. Hall was a Senior Resident Appraiser in the Society of Real Estate Appraisers. Other than enforcement action ancillary to this proceeding, Ms. Hall has no disciplinary history against her professional license. Respondent had sufficient experience and demonstrated proficiency to continually evaluate the competence of Ms. Hall. Respondent was first licensed as an appraiser in Kentucky in 1965 and became a licensed appraiser in Indiana in 1967 where he also taught appraisal courses. Respondent moved to Florida in 1977 and continued his career as an appraiser and appraiser instructor. In accordance with statutory requirements enacted in 1990, Respondent became certified in Florida as a General Real Estate Appraiser and is authorized to appraise commercial, industrial, and residential real estate. Respondent has developed and reviewed thousands of real estate appraisals in Florida and has no disciplinary history against his professional license. A footnote to SR 2-3 references Advisory Opinion AO-5 on page 132 of USPAP. Advisory Opinion AO-5 does not establish new appraisal standards or interpret existing standards. Rather, the Opinion illustrates the applicability of appraisal standards in specific situations and offers advice for the resolution of appraisal issues and problems. In the terms of Advisory Opinion A-05, Respondent was a principal on April 5, 2002, and Ms. Hall was an assistant. The extent of assistance that can be provided in the appraisal process is directly related to the competence of the assistant. As experience and demonstrated proficiency increase, it is appropriate for the principal to place greater reliance on the work performed by the assistant. It is appropriate for a principal to allow an experienced assistant with demonstrated proficiency to develop and communicate an appraisal. Such an assistant is competent to inspect the property, take pictures, draft the final appraisal report, and cosign the appraisal report with the principal. Advisory Opinion AO-5, at page 134, lines 112-114, lists only two minimum standards for the supervision of an experienced assistant. The principal should inspect both the exterior of the property and the photographs. Respondent's review of the appraisal report exceeded the express minimum standards for supervision of an assistant. Respondent personally inspected the property and the photographs and examined the appraisal report to verify that the distances of the comparables from the property were appropriate. Respondent ensured that adjustments in the report between comparables and the property were accurate and not excessive and also validated the calculation of adjustments in the appraisal report. Respondent reviewed maps of the area and verified dates and legal descriptions in the appraisal report. The omission of the workfile from Respondent's review of the appraisal report did not violate the standard of practice in the community in which Respondent and Ms. Hall practice. Two certified real estate appraisers with significant experience testified as peers in the community. Their testimony confirms the practice followed by Respondent and Ms. Hall.5 The community standard does not require a principal to review the workfile of an experienced appraiser unless the appraisal report is complex. The appraisal report that Respondent reviewed was not complex. Ms. Hall appraised a manufactured home in an area zoned for condominiums with no existing condominiums. A variation between actual and zoned use does not make an appraisal complex. As one peer explained in her testimony, "That wouldn't have made it complex to me. Zoning is a simple thing to me." The community standard of peers is an acceptable measure of competence in the appraisal standards adopted by statute. SR 1-2(f), USPAP at page 17, states that the scope of work necessary to complete an assignment is acceptable when it is consistent with the actions that peers would take in performing the same assignment or a similar assignment. A requirement for a principal to review the workfile of an experienced appraiser would be problematic in the community. Many experienced appraisers work from home and do not provide their principal with the workfile until after the appraisal report is communicated to the client. Even when a workfile is readily accessible, most principals do not have time to personally review the workfile. A principal must rely on administrative staff to perform that task. Only larger appraisal companies with extra staff have the luxury of reviewing workfiles. One peer who testified at the hearing had previously operated an appraisal company with sufficient staff to review workfiles. The staff routinely reviewed only the workfiles of assistants in training. Staff did not review the workfiles of experienced assistants.6 Respondent's signature on the appraisal report appears under a "Supervisory Appraiser's Certification." In relevant part, Respondent certified that he agreed to be bound by Appraiser Certification numbers 4-7 in the appraisal report. Appraiser Certification numbers 4-6 are neither relevant nor material to the matter at issue. The certifications address racial and other types of bias, an interest in the property, and a predetermined appraised value. Appraiser Certification number 7 certifies that Ms. Hall performed the appraisal in compliance with applicable appraisal standards. Similarly, the Supervisory Appraiser's Certification states that Respondent takes "full responsibility for the appraisal and the appraisal report." Petitioner interprets the quoted terms and similar terms elsewhere in the appraisal standards to mean that Respondent certifies to Petitioner that Ms. Hall performed the appraisal correctly and that Respondent is responsible to Petitioner for her errors. Petitioner interprets the certification of the "appraisal" to include the workfile. The agency's interpretation of statutory terms conflicts with the weight of the evidence. The term "responsibility" is reasonably construed as acknowledging responsibility to the client, rather than Petitioner, for the acts or omissions of an assistant. If Respondent were to evade his responsibility to the client, Respondent arguably may be responsible to Petitioner for the evasion. However, there is no evidence that Respondent attempted to evade his responsibility to the client. The precipitating complaint for this proceeding did not originate from the client, and there is no evidence of harm to the client. Ms. Hall does not know how the correct sales price information was omitted from the appraisal report. There is no evidence of intent or culpable knowledge by Ms. Hall. The closing price of a comparable is not the type of information that an appraiser would knowingly alter in an appraisal report. The correct closing prices at issue were matters of public record at the time and were so basic and fundamental that their omission from the appraisal report is patently inadvertent in the absence of contrary evidence. Ms. Hall followed the normal appraisal procedure she has used consistently over time. She utilized what is identified in the record as a clone appraisal. Ms. Hall modified an appraisal she had previously completed with data pertinent to the property being appraised. Either the computer program did not accept the correct closing prices for the comparables or Ms. Hall inadvertently failed to "input" them. Respondent did not have constructive knowledge of facts unknown to Ms. Hall at the time she drafted the appraisal report. SR 1-1(c), USPAP at page 15, does not define competency as perfection. Perfection is impossible to attain. Rather, competency requires only that Respondent use due diligence and due care in reviewing the appraisal report.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent not guilty of the violations charged in the Administrative Complaint and imposing no penalty against Respondent's professional license. DONE AND ENTERED this 3rd day of February, 2006, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 3rd day of February, 2006.
The Issue Should the Florida Real Estate Appraisal Board (the Board) take action against Respondent, a licensed real estate appraiser (appraiser), for violations set forth in Chapter 475, Part II, Florida Statutes (1995)?
Findings Of Fact Stipulated Facts: Respondent is a state-licensed appraiser. On or about January 9, 1997, Respondent, Fred Catchpole, and Rhonda Guy developed and communicated an appraisal report for property commonly known as 693 Broad Street, Pensacola, Florida 32819. In developing the subject property appraisal report, the Cost Approach and the Sales Comparison Approach were utilized. Additional Facts: Eventually the circumstances concerning the Uniform Residential Appraisal Report (the Report) at the 693 Broad Street, Pensacola, Florida, property (the Property) came to Petitioner's attention upon a complaint. On February 13, 2001, the complaint was made. The complaint was made by Daniel Alvin Ryland, a Florida-licensed appraiser who has provided appraisal services in Escambia and Santa Rosa counties in Florida. The investigation of the complaint covered the period February 20, 2001, through December 26, 2001. Benjamin F. Clanton was the principal investigator. At present, he is an investigator supervisor for Petitioner. He has held that position since 2002. Mr. Clanton started investigating appraisal cases in 1995, when he retired from the Birmingham Police Department in Birmingham, Alabama. In that year, he was employed by the Alabama Real Estate Appraisal Board. While there, he took three courses: the Appraisal of Real Estate, a 45-hour course; the Basic How to Appraise, a 25-hour course; and Uniform Standards of Professional Appraisal Practices (USPAP), a 16-hour course. He took an update in USPAP in 1997, a four-hour course. Mr. Clanton continued with Appraisal Institute courses or courses involving appraisal principles and procedures, basic income capitalization, residential case studies and a national USPAP course and other updates. As part of the investigation, Mr. Clanton interviewed Respondent Harrison. Mr. Clanton sought documentation from the Respondent in the interest of the recreation of the Cost Approach in the Report. Mr. Clanton asked for the work files supporting the Report. Respondent provided work files. Discrete information concerning recreation of the Cost Approach was not received by Mr. Clanton. From his observations related to the Cost Approach within the Report, Mr. Clanton describes problems with the calculations of the Cost Approach where the stated effective age in the comments on the Cost Approach was 25 years. That calculated to be significantly different, in his understanding, than the number used in the depreciation in the Cost Approach. The Report reflected a remaining economic life of 35 years and a total life expectancy of 60 years. He refers to the Report's statement of the effective age of the Property as 15 years. In his testimony, Mr. Clanton describes the age life depreciation method leading to establishment of the effective age but he was never qualified as an expert to allow consideration of the testimony on the age life depreciation method or other issues related to the Cost Approach. Therefore, no further facts are found on that topic. When interviewed by Mr. Clanton, Respondent Catchpole in DOAH Case No. 06-3389PL acknowledged that there were errors in the Cost Approach formulations attributed to Respondent Harrison. The nature of any errors was not explained. Without that explanation they become inconsequential. More particularly, the Property neighborhood is slightly north of Interstate 10 in Pensacola, Florida, west of Pine Forrest Road, to the west side of Highway 29, and south of Alternate 90. The Property is located in what is referred to as the Ensley area. The Property is one of the largest residences in the Ensley area, in particular in Ensley Gardens. Immediately off of Highway 29 are rows of commercial buildings. Behind those rows is a railroad track. The Property is about 200 feet from the railroad track. An Escambia County utilities substation, pumping station, is located north of the Property. The Escambia County public utilities facility is about 200 feet from the Property. The Property is located north of Broad Street. The Property is on a large lot. Homes across from the Property on Broad Street are located on smaller lots. The property is not in a Planned Unit Development (PUD). The area of the subject property is not homogenous, in that the homes vary widely in quality, design, age and size. By choice of the appraiser, the Sales Comparison Approach was used in determining the appraisal for the Property. There were three comparable sales. At the time the Report was written the Property was 27 years old. Comparable sale one was two years old. Comparable sale two was 12 years old. Comparable sale three was 9 years old. The Property site was 120 feet by 260 feet according to the Report. This was larger than the comparable sales sites. Respondent, in providing information from the work file related to the Report, included information from a Multiple Listing Service (MLS) for January 1997 from the Pensacola Association of Realtors. In reference to comparable sale one, the MLS refers to the location as Creekside Oaks Subdivision, a luxury home under construction and a Parade Home entry. It refers to a sprinkler system, pantry, cathedral ceilings, security alarm, two+ closets in the master bedroom, separate shower in the master bedroom, an open patio, laundry/utility room, on a golf course, with a two-car garage. It has a whirlpool for the master bedroom bath. It has double pane glass. In relation to comparable sale two, the MLS refers to soaring cathedral ceilings with a fireplace in living room and screen porch, a hot tub and gorgeous yard with pool. The pool is described as an in-ground pool. There is a reference to a unique atrium, an inside laundry, walk-in closets, sprinkler systems, laundry/utility room and security alarm. The MLS pertaining to comparable sale three refers to the Kings Road Subdivision in Cantonment, whereas the Report refers to the location as Pensacola. In relation to comparable sale three on Kings Road in Cantonment, that neighborhood has deed restrictions limiting the type of homes and the size of homes. It has a public sewer. It has underground utilities. It has a concrete curb and gutter. The house is described as having a fireplace, sprinkler system, screen porch, high ceilings, security alarm, two-car garage, with a garden tub in the master bath. It refers to a laundry inside. There is a pool. The Report in the section under the Comparable Sales Approach, under the sales comparison analysis that refers to design and appeal described the Property and the comparables as ranch/average. The Property and the comparable sales properties were all described as suburban-average as to location. The sites were described as average for the Property and inferior for the comparables with a $3000 positive adjustment in each comparable sale to compensate for the difference. The Property did not have a pool. Two of the comparable sales had pools. Mr. Clanton asked the Respondent to provide him with a second appraisal report on the Property. Respondent agreed to provide it and mailed it to Mr. Clanton. A second appraisal report was not received by Mr. Clanton. Nothing more is known about a second appraisal report. In the appraiser certification signed by Respondent as appraiser and signed by Respondent Catchpole, DOAH Case No. 06- 3389PL, as supervisory appraiser, under item 8 it was stated: "I have personally inspected the interior and exterior areas of the subject property . . . ." Within item 8 to the appraisers certification, it went on to say that there was a personal inspection of " . . . the exterior of all properties listed as comparables in the appraisal report " Respondent in this case did not inspect the interior of the Property as part of the appraisal, by contrast to an awareness of the exterior. Respondent Catchpole, DOAH Case No. 06-3389PL, served as the supervisory appraiser and as such did not inspect the Property in any respect. Respondent Fred R. Catchpole, DOAH Case No. 06-3389PL, reviewed comparable property data in relation to the sales comparison analysis but was not involved in the selection process in choosing comparable sales. The form used in preparing the Report is referred to variously as Freddie Mac Form 70 6/93 and Fannie Mae Form 1004 6/93. In the Report in the section involving subject matter, Fred and Juanita Hicks were listed as borrowers and the current owner of the Property. The property rights being appraised were under the heading "fee simple." There was a reference to a lender/client as Home Star Mortgage Lending. The results of the Report did not lead to any direct harm to a consumer, in particular, the listed borrowers, Fred and Juanita Hicks.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is RECOMMENDED: That a final order be entered dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 30th day of May, 2007, in Tallahassee, Leon County, Florida. S CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings This 30th day of May, 2007.
The Issue Whether the underlined portions of Respondent's proposed Rule 12D-10.0044(4)(b) are invalid exercises of delegated legislative authority: (b) If the property appraiser does not provide the information within the time required by subsection (3) and at least five calendar days before the hearing, the taxpayer shall be entitled to reschedule the hearing. If the property appraiser provides the information within the time set forth in subsection (5) but less than five calendar days before the hearing, the petitioner's submission of the information shall qualify as a written request for rescheduling as provided in subsection (9). In such circumstances, the clerk shall reschedule the hearing upon being so advised by the petitioner. Whether the underlined portion of Respondent's proposed Rule 12D-10.0044(5) is an invalid exercise of delegated legislative authority: (5)(a) The exchange in subsection (2) and (3) shall be delivered by regular or certified U.S. mail, personal delivery, overnight mail, FAX or email. It shall be sufficient if at least three FAX or email attempts are made to such address (sic). If more than one FAX number is provided, three (3) attempts must be made for each number to satisfy this requirement. The taxpayer and property appraiser may agree to a different timing and method of exchange. "Provided" means made available in the manner designated by the property appraiser or by the petitioner in his/her submission of information, as via email, facsimile, U.S. mail, or at the property appraiser's office for pick up. If the petitioner does not designate his/her desired manner for receiving the property appraiser's information, the information shall be provided by the property appraiser by depositing it in the U.S. mail. Whether Respondent's proposed Rule 12D-10.0044(8) is an invalid exercise of delegated legislative authority: (8) The information shall be in writing and may be delivered by regular or certified U.S. mail or personal delivery so that the information shall be received timely.
Findings Of Fact Mr. Robbins is the property appraiser for Miami-Dade County. The VAB is the duly-constituted value adjustment board for Miami-Dade County. Both Petitioners will be substantially affected if Respondent adopts the challenged portions of the proposed rule at issue in this proceeding. Both Petitioners have standing in this case. DOR has the responsibility to aid and assist property appraisers, tax collectors and value adjustment boards with respect to the assessment and collection of property taxes pursuant to Chapters 192-197, Florida Statutes. In that capacity, DOR promulgates rules implementing relevant legislation ever year. DOR promulgates rules in many areas, generally issues advisement letters, and interacts with local officials involved in the assessment and value adjustment board process. Every year, each county property appraiser is required to determine the value of all property in the county that is subject to ad valorem taxation. The valuation is as of January 1 of each year. See §§ 192.011 and 192.042, Fla. Stat. Each property appraiser is required to provide each taxpayer a notice containing the information required by Section 200.069, Florida Statutes.3 This notice is referred to as the TRIM notice, which is an acronym for Truth in Millage. The TRIM notice is typically mailed to the taxpayer before the end of August of each year. The TRIM notice includes the property appraiser's valuation of the property. For years Florida taxpayers have had the right to challenge a property appraiser's valuation and other issues pertaining to ad valorem taxation. Value adjustment boards, created by Section 194.015, Florida Statutes, serve as a forum to resolve disputes between taxpayers and county property appraisers regarding the appropriate value of real property or tangible personal property for ad valorem taxation purposes.4 Section 194.011(3)(d), Florida Statutes, sets a deadline for a taxpayer to file a petition for a hearing before a value adjustment board. A petition challenging the valuation of property must be filed before the 25th day following the mailing of the TRIM notice. Petitions involving other issues must be filed on or before the 30th day following the mailing of the TRIM notice. Because of these deadlines, a value adjustment board typically knows by the end of September the maximum number of petitions that will have to be resolved for that annual cycle. Pursuant to Section 194.015, Florida Statutes, a value adjustment board consists of three members of the governing body of the county and two members of the school board. Section 194.011, Florida Statutes, provides certain procedures to be followed in the event a taxpayer challenges an assessment. Section 194.011(2), Florida Statutes, provides as follows: (2) Any taxpayer who objects to the assessment placed on any property taxable to him or her may request the property appraiser to informally confer with the taxpayer. Upon receiving the request, the property appraiser, or a member of his or her staff, shall confer with the taxpayer regarding the correctness of the assessment. At this informal conference, the taxpayer shall present those facts considered by the taxpayer to be supportive of the taxpayer's claim for a change in the assessment of the property appraiser. The property appraiser or his or her representative at this conference shall present those facts considered by the property appraiser to be supportive of the correctness of the assessment. However, nothing herein shall be construed to be a prerequisite to administrative or judicial review of property assessments. If the dispute is not resolved, the taxpayer may file a petition with and have a hearing before the county's value adjustment board. The full value adjustment board can hear and decide a petition, or it can appoint a special master to hear the petition. Typically in large counties, including Miami-Dade County, a group of special masters are appointed to hear cases for the county's value adjustment board. In Miami-Dade County, the clerk of the VAB schedules the hearings before each special master. A special master typically hears between 50 and 60 petitions in a day. The series of hearings before a special master for a particular day is referred to as a board. A board is similar to a court docket, where one case is heard after the other. As is apparent from the number of petitions heard in a day by a special master, a hearing before the VAB typically lasts less than 15 minutes. Even with typically brief hearings, the value adjustment board process in Miami-Dade County has in recent years required four to six boards each business day over a period of nine to ten months to hear all petitions filed with the VAB. Mr. Robbins usually has an employee (referred to as an official) to represent his office at a board before a special master. In all, Mr. Robbins has approximately 20 employees who serve as officials plus support staff dedicated to VAB proceedings. It usually takes an official five to six working days to prepare his or her presentations for one board. Typically, an official is assigned a new board every six to seven business days. The value adjustment board process has a large impact on taxpayers and local governments in Miami-Dade County. In 2001, the VAB removed from the certified tax roll of Miami-Dade County over $1,600,000,000 in assessment dollars, which translated to approximately $39,500,000 fewer tax dollars. In 2002, the VAB removed from the certified tax roll of Miami-Dade County over $1,900,000,000 in assessment dollars, which translated to approximately $44,600,000 fewer tax dollars. The VAB heard approximately 24,500 petitions for tax year 2002 and it is estimated that 28,500 petitions will be heard for tax year 2003. Prior to 2002, the taxpayer had to disclose his or her evidence to the property appraiser prior to the hearing, but there was no requirement that the property appraiser had to provide his or her evidence to the taxpayer prior to the hearing. Frequently, the taxpayer would see the property appraiser's evidence for the first time at the hearing itself. In 2002, the Florida Legislature enacted Chapter 2002- 18, Laws of Florida, which amends portions of the law referred to as the “Taxpayers Bill of Rights,” including portions of Chapter 194, Florida Statutes. Referring to hearings before a value adjustment board, Section 2 of Chapter 2002-18 created subsection (4) and (5) of Section 194.011, Florida Statutes, to read as follows: (4)(a) At least 10 days before the hearing, the petitioner [the taxpayer] shall provide to the property appraiser a list of evidence to be presented at the hearing, together with copies of all documentation to be considered by the value adjustment board and a summary of evidence to be presented by witnesses.[5] (b) No later than 5 days after the petitioner provides the information required under paragraph (a), the property appraiser shall provide to the petitioner a list of evidence to be presented at the hearing, together with copies of all documentation to be considered by the value adjustment board and a summary of evidence to be presented by witnesses. The evidence list must contain the property record card if provided by the clerk. The department shall by rule prescribe uniform procedures for hearings before the values adjustment board which include requiring: Procedures for the exchange of information and evidence by the property appraiser and the petitioner consistent with s. 194.032[6]; and That the value adjustment board hold an organizational meeting for the purpose of making these procedures available to petitioners. In response to the mandate found in Section 194.011(5), Florida Statutes, Respondent proposes, pertinent to this proceeding, to adopt Rule 12D-10.0044, which provides, in pertinent part, as follows. Subsequent to the mailing or sending of the hearing notice, and at least 10 days before the scheduled hearing, the petitioner shall provide the property appraiser with a list and summary of evidence to be presented at the hearing. The list and summary must be accompanied by copies of documentation to be presented at the hearing. No later than 5 days after the property appraiser receives the petitioner's documentation, the property appraiser shall provide the petitioner with a list and summary of evidence to be presented at the hearing. The list and summary must be accompanied by copies of documentation to be presented at the hearing. The evidence list must contain the property record card if provided by the clerk. In computing the 5 day period prescribed in this subsection, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation. See Rule 1090(a), Florida Rules of Civil Procedure, entitled Time.[7] (4)(a) If the taxpayer does not provide the information to the property appraiser at least ten days prior to the hearing pursuant to subsection (2), the property appraiser need not provide the information to the taxpayer pursuant to subsection (3). (b) If the property appraiser does not provide the information within the time required by subsection (3) and at least five calendar days before the hearing, the taxpayer shall be entitled to reschedule the hearing. If the property appraiser provides the information within the time set forth in subsection (5) but less than five calendar days before the hearing, the petitioner's submission of the information shall qualify as a written request for rescheduling as provided in subsection (9). In such circumstances, the clerk shall reschedule the hearing upon being so advised by the petitioner. (5)(a) The exchange in subsection (2) and (3) shall be delivered by regular or certified U.S. mail, personal delivery, overnight mail, FAX or email. It shall be sufficient if at least three FAX or email attempts are made to such address (sic). If more than one FAX number is provided, three attempts must be made for each number to satisfy this requirement. The taxpayer and property appraiser may agree to a different timing and method of exchange. "Provided" means made available in the manner designated by the property appraiser or by the petitioner in his/her submission of information, as via email, facsimile, U.S. mail, or at the property appraiser's office for pick up. If the petitioner does not designate his/her desired manner for receiving the property appraiser's information, the information shall be provided by the property appraiser by depositing it in the U.S. mail. The information shall be sent to the address listed on the petition form; however, it may be submitted to an email or FAX address if given. In computing any period of time prescribed or allowed by these rules, the day of the act, event, or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is a Saturday, Sunday, or legal holiday, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday, or legal holiday. If the tenth day before a hearing is a Saturday, Sunday, or legal holiday, the information under subsection (2) shall be provided no later than the previous business day. * * * Hearing procedure: . . . A property appraiser shall not appear at the hearing and use undisclosed evidence that was not supplied to the petitioner as required. The normal remedy for such noncompliance shall be a rescheduling of the hearing to allow the petitioner an opportunity to review the information of the property appraiser. The information shall be in writing and may be delivered by regular or certified U.S. mail or personal delivery so that the information shall be received timely. The petitioner may reschedule the hearing one time by submitting a written request to the clerk of the board no less than 5 calendar days before the scheduled appearance. This rule provides procedures for information and evidence exchange between the petitioner and property appraiser, consistent with s. 194.032 F.S., subject to the provisions of 194.034(1)(d), F.S., and subsection 12D-10.003(4), F.A.C., relating to a request by a property appraiser for information from the petitioner in connection with a filed petition, which information need not be provided earlier than ten days prior to a scheduled hearing pursuant to subsections (2) and (5). The value adjustment board shall hold an organizational meeting and must make the uniform procedures available to petitioners. Such procedures shall be available a reasonable time following the organizational meeting and shall be available a reasonable time before the commencement of hearings in conformance with this rule. The Board [sic] shall be deemed to have complied if it causes petitioners to be notified in writing, along with or as part of the notice of hearing, of the evidence and availability of its procedures and include notice as to the exchange of information contained in this rule. The Board [sic] is authorized to use other additional or alternative means of notification directed to the general public or specific taxpayers, as it may determine. The taxpayer is entitled to notice of the hearing of his or her hearing by a value adjustment board (or a special master on behalf of the value adjustment board) of no less than 20 calendar days. See § 194.032 (2), Fla. Stat.8 The taxpayer must provide the property appraiser with the taxpayer's evidence no less than ten calendar days before the scheduled hearing to trigger the requirement that the property appraiser provide his evidence to the taxpayer prior to the hearing. If the taxpayer does not provide its evidence to the property appraiser at least ten days prior to the hearing, the exchange of evidence requirement is not triggered and the taxpayer is not entitled to the property appraiser's evidence prior to the hearing. If the exchange of evidence requirement is timely triggered by the taxpayer, Section 194.011(4)(b), Florida Statutes, requires the property appraiser to provide his or her evidence to the taxpayer within five days after receiving the taxpayer’s information. Pursuant to Section 3 of the proposed rule (which is not being challenged in this proceeding) this five-day period consists of business days. Pursuant to Section 194.032(2), Florida Statutes, the taxpayer has the right to one continuance of the hearing if the request for the continuance is made at least five calendar days before the scheduled hearing (the so-called "freebie"). In addition to the freebie, the VAB typically grants a taxpayer’s motion for continuance based on one or more of the following grounds: A recent death within the immediate family of the taxpayer or his representative; A medical emergency; Proper notification was not afforded the taxpayer pursuant to the provisions of Rule 12D-10.0004(2). A clerical error was made by the county's staff that precluded the appearance of the taxpayer before the board as scheduled. The taxpayer or the taxpayer's agent is scheduled to appear before another governmental entity on the same date and within the same time frame as the scheduled appearance before the board. The taxpayer's scheduled appearance falls on a religious holiday. The taxpayer has not been afforded reasonable notice of the requirement to have the professional appraiser who prepared the taxpayer's appraisal report physically present at the hearing to testify. The taxpayer is unable to submit an appraisal report of other documentary evidence to the property appraiser prior to the scheduled hearing if reasonable cause exists for failure to do so. The property appraiser failed to comply with the evidence exchange requirements of Section 194.011(4), and the taxpayer requests a consequence of that failure. The proposed rule creates an additional ground for the taxpayer to request that a hearing be rescheduled. Pursuant to the portion of Section (4)(b), Florida Statutes, of the proposed rule being challenged in this proceeding, the taxpayer has a right to a continuance of the scheduled hearing (a) if the taxpayer has triggered the requirement for the exchange of evidence set forth in both Section 194.011 and the proposed rule and (b) the taxpayer does not receive the property appraiser’s evidence at least five calendar days before the hearing. It is realistic to anticipate that many taxpayers will trigger the exchange of evidence provision on the tenth day before the scheduled hearing. In most of those cases, the taxpayer will not receive the property appraiser's evidence five calendar days before the scheduled hearing even if the property appraiser provides his or her evidence to the taxpayer on the fifth business day following receipt of the taxpayer's evidence. In virtually all of those cases, the taxpayer will not receive the property appraiser's evidence five calendar days before the hearing if the property appraiser mails that evidence to the taxpayer or if the property appraiser needs time to gather rebuttal evidence.9 The number of hearings that will have to be rescheduled before the VAB has not been quantified, but the number is substantial and additional costs will be incurred. While it is clear that the rescheduling of a substantial number of hearings before the VAB will increase the workload for Mr. Robbins's office and for the VAB staff, the evidence did not establish that the proposed rule places an impossible burden on either Mr. Robbins or the VAB. With appropriate planning both Petitioners should be able to manage the rescheduling of a large number of value adjustment board hearings. DOR drafted the proposed rule with the intent that the interests of the taxpayer and the property appraisers be balanced to the fullest extent possible within the authority granted by Section 194.011(4) and (5), Florida Statutes. The addition of the non-statutory ground for a continuance is intended to provide the taxpayer a reasonable period of time to review the property appraiser's evidence prior to a hearing. In determining what would constitute a reasonable period of time for a taxpayer to have to review the property appraiser’s evidence, DOR considered several factors. DOR considered the statutes and the legislative intent. DOR considered the type of evidence the property appraiser would typically have to provide the taxpayer and the availability of such evidence. DOR considered that Section 194.034(1)(d), Florida Statutes,10 has been historically interpreted as requiring the taxpayer to provide his evidence to the property appraiser "a reasonable time" before the value adjustment board hearing, and that “a reasonable time" has been historically interpreted to be five business days before the hearing. DOR considered that the taxpayer must exercise the freebie continuance no less than five calendar days before the hearing. DOR considered input from representatives of taxpayers and property appraisers during the rulemaking process. In drafting the provision that delivery by mail would be the default method of delivery, DOR considered that the rule will be of statewide applicability, that delivery by mail is the most common default method of delivery, and that not all taxpayers or property appraisers have the capabilities to receive or send information by facsimile, e-mail, or hand delivery. DOR entered into a long rule-promulgation process, which gave all interested parties, including Mr. Robbins and the VAB, an opportunity to provide input into the rules that would govern the process of exchange of information prior to VAB hearings. Mr. Robbins and the VAB actively participated in the rule-making process and made their views known throughout the process. The promulgation of the proposed rule was delayed to give interested parties an opportunity to seek to have the legislation amended, but no amendments were passed during the 2003 Legislative Session. The Notices of Proposed Rulemaking for the proposed rule contained the summary of statement of estimated regulatory costs, which requested that any person who wishes to provide information regarding the regulatory costs or who wished to provide a proposal for a lower cost regulatory alternative must do so within 21 days of the notice. No comments or proposals were received on the regulatory cost statement at any point during the rule promulgation process. Neither Mr. Robbins nor the VAB submitted a statement of alternative regulatory costs during the rule promulgation process or at the final hearing. Neither Petitioner established at the final hearing that a less costly alternative to the proposed rule would substantially accomplish the statutory objectives.
The Issue The issues to be determined are whether Respondent committed the violations alleged in the Amended Administrative Complaints and if so, what penalty should be imposed?
Findings Of Fact Petitioner is the state agency charged with the licensing and regulation of real estate appraisers in the State of Florida pursuant to section 20.165 and chapters 455 and 475, part II, Florida Statutes. At all times material to the allegations in the Amended Administrative Complaints, Respondent has been a certified residential real estate appraiser, and has been issued license number RD 1226. Respondent has been licensed since 1991 and has no history of disciplinary action taken against his license. He trades as Rhea Appraisals, Inc., located in Gainesville, Florida. For the period from October 23, 2009, through May 12, 2010, Respondent was the supervising appraiser for registered trainee appraiser Leslie Corey Bullard. From October 8, 2009, through at least July 2011, he also supervised registered trainee appraiser Beverly Sanders Archer. Respondent was Mr. Bullard's first supervising appraiser. The Program Alachua County elected to participate in the federally- funded Neighborhood Stabilization Program ("NSP"), which is administered on the state level by the Department of Community Affairs. To that end, Alachua County contracted with Meridian Community Services Group ("Meridian") to assist in the implementation of the program. In a nutshell, the NSP is a program by which the Department of Housing and Urban Development provides funding for local governments to acquire properties in order to rehabilitate them and re-sell them to low-to-moderate-income households, or to rent them to very low-income households. As explained at hearing, properties that are acquired through the program cannot be sold for more than the costs of acquisition, rehabilitation, and "soft costs." As a result, the local government can only purchase the property at one percent or below the appraised value. In 2010, Alachua County solicited bids for appraisers to appraise properties that it considered buying through the NSP. Rhea Appraisals, Inc., obtained a contract to appraise 20 of the properties for the program. Corey Bullard was involved in the procurement of the contract to perform the appraisals. The listing price for the properties was generally the price listed in the multiple listing service ("MLS"). Alachua County had instructed that the offer for the properties considered for purchase was to be at the listing price. Once the appraisal was performed, if it appraisal did not come in at within one percent of the listing price, then the offer is amended to reflect one percent below the appraisal. If the seller does not agree to the change, that property is not purchased. Rhea Appraisals, Inc., was to be paid $225.00 for each property appraised. Payment for the appraisal was not dependant on the results of the appraisal. At issue in these cases are the appraisals for three properties. For each of these properties, two appraisals were actually performed. The Initial Appraisals An appraisal was communicated by Rhea Appraisals, Inc., for a property located at 3009 NE 11th Terrace, Gainesville, Florida (Property 1, related to Case No. 11-3007), on April 8, 2010 (Petitioner's Exhibit 13). The appraisal report is signed by Cory Bullard and by Respondent as his supervisor, and the front summary sheet lists Corey Bullard as the appraiser. The appraisal indicates that the inspection of the property and of the comparable sales took place on April 2, 2010, which is listed as the effective date of the report, and the appraisal is signed by both Mr. Bullard and Respondent on April 8, 2010. The appraisal report provides an opinion of value of $52,000. The list price for the property, and thus the offer made by the County, was $65,000. The Comments on Appraisal and Report Identification state that "Corey Bullard provided assistance in the gathering of data, photographing and entering data into this report." Included in the appraisal's certification are the following statements: 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 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. 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. An appraisal report for a property located at 12017 NW 164th Terrace, Alachua, Florida (Property 2) was communicated on April 6, 2010 (Petitioner's Exhibit 5, related to Case No. 11- 3008). The appraisal report is signed by Corey Bullard and by Respondent as his supervisor, and the front summary sheet lists Mr. Bullard as the appraiser. The appraisal indicates that the inspection of the property and of the comparable sales took place on April 2, 2010, which is listed as the effective date of the appraisal, and the appraisal is signed by both Respondent and Mr. Bullard on April 6, 2010. This appraisal report provides an opinion of value of $75,000. The list price for the property, and thus the offer made by the County, was $105,000. The Comments on Appraisal and Report Identification state that "Corey Bullard provided assistance in the gathering of data, photographing and entering date into this report. Appraiser won the bid for 20 properties from Meridian Community Services for $225 each." Like the report for Property 1, the appraisal certification contained the statements identified in finding of fact 15. Rhea Appraisals, Inc., also issued an appraisal report for property located at 2923 NE 11th Terrace, Gainesville, Florida (Property 3, related to Case No. 11-3009), signed by Respondent on April 8, 2010 (Petitioner's Exhibit 10). The report indicates that the date of the inspection of the property and of the comparable sales, and effective date of the report, is April 5, 2010. This appraisal report provides an opinion of value of $54,000. The list price for the property, and thus the offer made by the County, was $69,900. The Comments on Appraisal and Report Identification state that "Beverly Archer, state registered trainee appraiser #RT2255 provided assistance in the gathering of data, measuring and photographing the subject dwelling, and drafting information into the URAR." Like the report for Properties 1 and 2, the appraisal certification contained the statements identified in finding of fact 15. The Second Appraisals Subsequently, a second appraisal was developed by Rhea Appraisals, Inc., for each of these properties. Property 1 (11-3007) A second report developed for Property 1 (Petitioner's Exhibit 14), has an invoice attached to the front, and the summary sheet lists Hugh Rhea as the appraiser. The appraisal gives an opinion of value of $66,000, compared to the County's offer of $65,000. The second appraisal lists the effective date of the appraisal as April 2, 2010, and the date of the signature and report as April 8, 2010. These dates are the same as those listed on the appraisal with value of $52,000. There are no notations in the Comments on Appraisal and Report Identification section of the report, and while the appraiser's certification includes the same statement quoted as paragraph 19 in finding of fact 15, the first statement, although similar, states: 6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. No explanation is given as to why the second report was generated. However, the second report contains the following additional differences: On page one of the report, in response to the question, "[a]re there any physical deficiencies or adverse conditions that affect the livability, soundness, or structural integrity of the property?", the statement "[s]ubject is not functional in the current state as of inspection date" has been deleted in the second appraisal. In the first report, the condition of comparable sale 1 is listed as "superior." In the second report, it is listed as "inferior." In the first report, the condition for comparable sale 2 is listed as "average." In the second report, it is listed as "inferior." In the first report, the condition of comparable sale 4 is listed as "superior." In the second report, it is listed as "average." In the first report, the condition of what was described as comparable sale 6 is listed as "average." In the second report, the original comparable sale 5 is deleted and comparable sale 6 is listed as comparable 5. Its condition is described as "inferior." Respondent's work papers to not provide an explanation for the changes made from the first report to the second report for this property. Property 2 (No. 11-3008) The second appraisal for Property 2 has an invoice for $225 attached to the front, and the summary sheet lists Hugh Rhea as the appraiser, as opposed to Corey Bullard. The opinion of value is $105,000, which matches the initial offer by the County. The report contains two different effective dates: on page 2 the report states that the effective date is April 2, 2010, while the signature block on page 6 indicates that the effective date is April 6, 2010. The date of the signature and report is April 14, 2010. The Comments on Appraisal and Report Identification are the same as those listed in the initial report, and the appraiser's certification includes the same statements quoted in paragraph 15. No explanation is given as to why the second report was generated. However, the second report contains the following differences: In the first report, the estimated cost to cure the stated deficiencies was listed as $20,000.00. In the second report, this amount is reduced to $15,000.00. In the first report, the condition adjustment for comparable sale 1 is -$27,389.00, for a gross adjustment of 41 percent. In the second report, the condition adjustment was -$6,389, for a gross adjustment of 23.2 percent. The location adjustment for comparable sale 1 is changed from -$10,000 in the first report to no adjustment at all in the second report. The condition adjustment in the first report for comparable sale 2 is -$40,000.00. In the second report, it is listed as -$25,000.00. The location description for comparable sale 2 is listed in the first report as "urban/sup." In the second report, it is listed as "suburban/sup." The location adjustment for comparable sale 2 is listed in the first report, as -$20,000.00. In the second report, it is listed as -$10,000.00. The condition for comparable sale 3 is changed from "superior" in the first report to "average" in the second report. The condition adjustment for comparable sale 3 is listed in the first report as -$20,000.00. It is changed in the second report to no adjustment. The room adjustment for comparable sale 3 is listed in the first report as -$4,000.00. It is changed in the second report to -$2,000. The location description for comparable sale 4 is listed in the first report as "suburban/sup" and changed in the second report to "suburban." The location adjustment for comparable sale 4 is listed as -$10,000.00. It is changed in the second report to no adjustment. The room adjustment for comparable sale 4 is listed in the first report as +$4,000.00. It is changed in the second report to +$2,000.00. The basement adjustment for comparable sale 4 is listed as -$10,000.00 in the first report, and as -$5,000.00 in the second report. The condition adjustment for comparable sale 5 is listed in the first report as -$20,000.00. It is changed in the second report to -$15,000.00. The location adjustment for comparable sale 5 is listed in the first report as -$20,000.00. It is changed in the second report to -$10,000.00. The condition of comparable sale 6 is listed in the first report as "superior." It is changed in the second report to "average." The condition adjustment for comparable sale 6 is listed in the first report as -$20,000.00. It is changed in the second report to no adjustment. Respondent's work papers for Property 2 do not provide any explanation for the changes noted above. The second report for Property 3 (Petitioner's Exhibit 11) also has an invoice attached, which states "summary complete." The summary sheet lists Hugh Rhea as the appraiser. The appraisal gives an opinion of value of $71,000, compared to the County's offer of $69,900. The second appraisal lists the effective date of the appraisal as April 5, 2010, and the date of the signature and report as April 8, 2010. These dates are the same as those listed on the appraisal with value of $54,000. The Comments on Appraisal and Report Identification are the same as those listed in the initial report, and the appraiser's certification includes the same statements quoted in paragraph 15. No explanation is given as to why the second report was generated. However, the second report contains the following differences: The first report contains six comparable sales. The second contains only four, and of those four, only two (those with the highest value) from the first report were included in the second report. The property located at 2610 NE 12th Street was listed as comparable sale 4 in the first report and as comparable sale in the second report. The gross living adjustment for this property was listed as -$2,025.00, while in the second report it is listed as -$1,620.00. With respect to this same property, the carport adjustment listed in the first report is +$1,500.00, and is listed as +$2,000.00 in the second report. The property located at 2703 NE 11th Street was listed as comparable sale 6 in the first report and as comparable sale in the second report. The condition adjustment for this property is changed from no adjustment in the first report to +$10,900.00 in the second report. With respect to this comparable sale, the gross living adjustment listed in the first report is -$7,125.00 while it is listed as -$2,340.00 in the second report. In the first report, as part of the cost approach to estimating value, the remaining estimated life for Property 3 is listed as 17 years, while in the second report it is listed as 32 years. Similarly, the depreciation figure listed in the first report is $94,524.00, while in the second report it is listed as $76,797.00. Respondent's work papers for Property 3 provide no explanations for the changes listed above. The Explanations All three of the initial appraisals, as well as all three of the second appraisals, state that the price of the property was to be determined by the appraisals, and that the appraiser had requested a copy of the contract and was told they would be forwarded at a later time. After submission of the first appraisals, Corey Bullard testified that he received a telephone call from Esrone McDaniels from Meridian regarding the opinions of value, indicating that the opinions were too low. Mr. McDaniels does not recall such a conversation. What is clear, however, is that at some point Mr. McDaniels spoke to Mr. Rhea regarding the program to explain the mechanics of the process for the NSP. On April 13, 2010, Mr. McDaniels sent an e-mail to Mr. Rhea with the title "Alachua County Properties." The e-mail contained a table listing nine properties, including Properties 1-3. The table contained columns listing the property addresses; the initial offer amount; the final acquisition amount (if the sale was completed); and the appraised value. The appraised values listed in the chart for Properties 1-3 were the opinions of value listed in the first reports described, i.e., the lower values. Along with the chart was the following message: Mr. Rhea - - per our conversation, please find the information requested. Should you have any questions, please give me a call. As stated, per the program requirements, our properties must be purchased at or below 99% of the appraised value. For example, since HUD won't adjust the purchase price, the initial offer should be a minimum 99% of the appraised value. Therefore, the appraisal should represent 1% above the initial offer price above. Let me know if you have any questions. Thanks. Mr. Bullard was aware of the preparation of the second reports and was not comfortable with them being developed. He made excuses not to return to work, pass protected his electronic signature and filed a complaint against Respondent with the Department. Mr. Bullard also testified that Respondent's electronic signature was not pass-protected, and that all of the office staff had access to it. No evidence was presented to refute this statement. However, there is also no evidence that Mr. Bullard ever used Respondent's electronic signature without his consent, or that he failed to supervise Bullard's work. To the contrary, Mr. Bullard testified that for the two appraisals with which he was involved, Respondent provided supervision and approved the appraisals before they were communicated to the client. While the second appraisal reports for two of the three properties indicate that the date of the signature predated the e-mail from Esrone McDaniels, the only appraisal values listed in the e-mail are for the original, lower values. From the totality of the evidence, it is found that the only plausible explanation is that the appraisals were backdated to reflect an earlier effective date. Mr. McDaniel vehemently denied that he ever told Respondent to "hit a certain value with an appraisal, saying "Absolutely not. I don't have the authority to do that and I would never do that." He believed that the underlined sentence in his e-mail was part of his attempt to "explain the program, period," and was one example to drive across the one-percent federal requirement. Mr. Rhea, on the other hand, in his response to the Department's complaint, stated the following: Let's start with the orders or bids, Alachua County was allotted 3 to 4 million dollars to buy property across all of Alachua County but they had to be foreclosed, bank owned or short sales. . . . The properties in questioned [sic] are HUD or Fannie Mae owned properties. When Fannie Mae has a property listed before it goes on the market, they have 3 BPO's done plus an appraisal, then they set an asking price. Our assignment was to inspect the properties, check the repairs needed and then value the property "as is" knowing the property is contracted at the asking price. With 3 BPO's and appraisal to back it up the Realtor's contracted the house knowing this plus they also knew the county was mandated to purchase at that price. What Mr. Bullard did not understand and still doesn't, the assignment for the 20 appraisals scope of work was to concur with the work and valuation that already had been done. The first appraisal done did not come in at $50,000 and then I change the value. Mr. Bullard said the property is $50,000 and I told him he was wrong and that did not set well with him. . . . * * * About the conversation with Mr. Esrone McDaniel's, [sic] we talk about what the Alachua County Board of County Commissioners was mandated to do with the money. The properties have been contracted and he asked me whether I could come within 1% of the value. I told him I have a range of value of 5% so I said I thought I could. This is when I knew that Mr. Bullard did not get a handle on what the assignment was all about. The e-mail that Mr. Bullard was referring to, stated the program requirements, which is what Esrone and I talked about and Mr. Bullard took it out of context stating that I would help him out. Mr. Bullard told me at the start that he knew what the county wanted and come to find out, he did not have a clue. Although Respondent indicated in his letter that the scope of the project was "to concur with the work and valuation" that had already been performed, this scope is not reflected in the description contained in any of the six appraisals. To the contrary, the appraisals on their face indicate that no predetermined value is at issue. From the totality of the evidence, it is found that Respondent issued the second appraisals in each case for the purpose of confirming a predetermined value, i.e., the list price for each of the properties, as communicated to him in Esrone McDaniels' e-mail of April 13, 2010. The Applicable Standards Property appraisers are required to adhere to the Uniform Standards of Professional Appraisal Practice (USPAP), which are developed by the Appraisal Standards Board of the Appraisal Foundation. The USPAP Ethics Rule is divided into four sections: conduct, management, confidentiality, and recordkeeping. The conduct section provides in pertinent part: Conduct: An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interests. An appraiser: must not perform an assignment with bias; must not advocate the cause or interest of any party or issue; must not accept an assignment that includes the reporting of predetermined opinions and conclusions; . . . The management section of USPAP provides in pertinent part: Management: An appraiser must not accept an assignment, or have a compensation arrangement for an assignment, that is contingent on any of the following: the reporting of a predetermined result (e.g., opinion of value); a direction in assignment results that favors the cause of the client; the amount of a value opinion; the attainment of a stipulated result (e.g., that the loan closes, or taxes are reduced); or the occurrence of a subsequent event directly related to the appraiser's opinions and specific to the assignment's purpose. According to Michael Adnot, the Department's expert witness, these USPAP standards require an appraiser to be independent, impartial, and objective, and an appraiser cannot advocate the cause of a client or pre-determine a value. Moreover, concurrence with a prior appraisal cannot be a condition of an assignment. If an appraiser feels pressure to reach a certain result, he or she should not take the assignment. Mr. Adnot's testimony is credited. Based upon the evidence presented, it is found that Respondent developed and communicated the second reports for all three properties with the intent of providing appraisal reports that came within one percent of the selling price, i.e., a predetermined value. The investigative costs for these three cases were as follows: for Case No. 11-3007, costs are $1,303.50; for Case No. 11-3008, costs of investigation are $1,501.50 and for Case No. 11-3009, costs total $1,336.50.
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 finding that Respondent violated section 475.624(2) and (15) as alleged in Case Nos. 11-3007, 11-3008, and 11-3009; suspending his license to practice as a certified residential real estate appraiser for a period of 3 years, followed by 5 years of probation; imposing a $6,000 fine and imposing costs in the amounts identified in finding of fact number 49, for a total of $4,141.50 in costs. DONE AND ENTERED this 17th day of February, 2012, in Tallahassee, Leon County, Florida. S Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 2012.
The Issue The issue is whether Respondent committed the violations alleged in the Administrative Complaint, and if so, what discipline should be imposed.
Findings Of Fact Respondent is a certified residential real estate appraiser. His license number is RD-4163. Respondent was licensed as a registered trainee appraiser in December 2001. He passed the certification exam and received his current license in November 2003. Respondent has not previously had any disciplinary action taken against him by the Division or the Florida Real Estate Appraisal Board (Board). On June 14, 2005, Respondent was engaged by a mortgage company to appraise the single-family residence located at 620 Adirondack Avenue in Orlando (“the subject property”). The subject property was owned at the time by Cosme Abreu and his wife. The Abreus also owned a single-family residence located at 623 Adirondack Avenue, which is across the street from the subject property. The subject property was at the time of the appraisal under contract for sale to Jose Ciro, who was a co-worker of Mr. Abreu's. Respondent previously conducted an appraisal of the subject property in March 2005. His firm also conducted several appraisals of the Abreus' property at 623 Adirondack Avenue, including an appraisal on June 14, 2005. Respondent went to the subject property on June 14, 2005, and walked around the inside and outside of the residence taking measurements and observing the condition of the property. He testified that at the time of the appraisal the subject property was in good overall condition; that all of the appliances were in place; that the air conditioner was working; that the carpet and flooring were in place; and that there was no readily observable water damage or rotten wood on the interior or exterior of the residence. Respondent prepared an appraisal report of the subject property on June 14, 2005. Respondent estimated in his report that the market value of the subject property as of the date of the appraisal was $185,000. Respondent used the cost approach and the sales comparison approach to arrive at that valuation. The Division’s expert appraiser, Ben Cole, III, did not take issue with the methodology used by Respondent in his appraisal of the subject property. Indeed, Mr. Cole stated in his report that: “The [comparative] sales were legitimate transactions, pertinent and in close proximity to the subject. The home was measured correctly and the square footage correctly computed with the room count and placement shown properly.” Nevertheless, Mr. Cole testified that the appraisal report prepared by Respondent was misleading because it did not disclose the actual condition of the subject property as of the date of the appraisal. Mr. Cole did not have any personal knowledge as to the condition of the property as of the date of the appraisal; his opinion regarding the misleading nature of Respondent’s appraisal report was based upon the assumption that the condition of the subject property at the time of the appraisal was as reflected in the photographs taken in August 2005. However, as discussed below, the validity of that assumption was not established by clear and convincing evidence. Respondent did not take photographs of the subject property in connection with the June appraisal. The exterior photographs of the subject property included in his appraisal report were the photographs that he took in connection with the March appraisal. Respondent testified that the March photographs accurately depicted the condition of the subject property as he observed it in June, and he stated in his appraisal report that the subject property has been “maintained in good overall condition.” Mr. Abreu testified that subject property was in good condition at the time of the appraisal, which was consistent with and corroborated Respondent’s assessment of the condition of the subject property.3 Mr. Ciro had no direct personal knowledge about the condition of the subject property in June 2005. He did not take possession of the property until mid-August 2005, even though the closing occurred in mid-July 2005. Mr. Ciro had only visited the subject property twice before August 2005. One of those visits occurred prior to the three hurricanes that hit the Orlando area in August and September of 2004. Mr. Ciro could not recall the date of his other visit to the property, but it was before June 2005. Mr. Ciro testified that the subject property was in good condition at the time of his visits, although he acknowledged that he did not closely examine the outside of the house because it was nighttime when he was at the subject property. The condition of the subject property in August 2005 was not good, as reflected in the photographs and videotape that were received into evidence. For example, the carpet in the family room was missing, appliances were missing, the kitchen sink and cabinets had been removed and were on the back patio, there was a stain of some kind on the ceiling in at least one of the rooms, the backyard was overgrown and full of trash, and there was damage to the soffit on the right-front of the house. Mr. Abreu testified that some of the damage depicted in the photographs and videotape -- e.g., removal of the sink from the kitchen, floor damage caused by a plumbing problem -- occurred between the time of the appraisal and the time that Mr. Ciro took possession of the subject property, and that he was in the process of fixing the damage when Mr. Ciro took possession of the property. Mr. Abreu attributed the remainder of the damage to Mr. Ciro. Mr. Ciro and the Abreus are currently in litigation regarding the sale of the subject property and its condition in August 2005. Respondent is not a party to that litigation. Respondent and Mr. Abreu testified that the August 2005 photographs do not reflect the condition of the property as of the time of the appraisal on June 14, 2005. That testimony is called into question by the photograph in the appraisal report that appears to show that the soffit damage observed in August 2005 on the right-front corner of the house was present at the time of the March appraisal,4 but the evidence was not clear and convincing on that issue. In October 2005, the Division received a complaint from Mr. Ciro regarding Respondent’s appraisal of the subject property. Beverly Ridenauer was assigned to investigate the complaint. It took Ms. Ridenauer several months to make contact with Respondent because the address that the Division had on file for him was incorrect. Respondent was not able to produce his work file for the subject property when it was initially requested by Ms. Ridenauer.5 When the original work file could not be located, Respondent “reconstructed” the file and provided it to Ms. Ridenauer. The original work file was subsequently located and provided to the Division during discovery. There is no evidence of any discrepancies between the “reconstructed” file and the original file. The work file was not offered into evidence, but Respondent testified that it included the property appraiser records, Multiple Listing Service print-outs, and other information he reviewed and considered in his appraisal of the subject property. Respondent required his trainees to take interior photographs of the property they appraised for his use in reviewing and signing-off on their work, but he did not take interior photographs of properties that he appraised unless the lender specifically requested such photographs. As a result of this case, however, Respondent now takes interior photographs as a standard practice in order to “protect [him]self.” There is no statute, rule, or USPAP standard that requires interior photographs to be taken as part of an appraisal. The Division’s expert appraiser, Mr. Cole, did not know whether it was even typical for appraisers to take interior photographs; he simply testified that such photographs “would have been helpful” in this case.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Board issue a final order dismissing the Administrative Complaint. DONE AND ENTERED this 22nd day of August, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 22nd day of August, 2007.
The Issue Whether the Respondent, Omari Murray, committed the violations alleged in the Administrative Complaint and, if so, what penalty should be imposed.
Findings Of Fact At all times material to the allegations of this case, the Petitioner was the state agency charged with the responsibility to administer and enforce the real estate licensing laws found in Chapter 475, Florida Statutes (2004). At all times material to the allegations of this case, the Respondent was a registered trainee appraiser who was subject to the provisions of Chapter 475, Florida Statutes (2004). As an appraiser trainee, the Respondent was required to perform appraisal services through a fully registered real estate appraiser licensed pursuant to Florida law. On or about December 21, 2002, Ms. Cesar paid the Respondent $550.00 to perform an appraisal for her vacant lot located at 4229 Southwest Jarmer Road, Port St. Lucie, Florida. Ms. Cesar paid the Respondent by check drawn on her personal bank account. The check was payable to the Respondent individually. The check was negotiated and the account was debited in the full amount of the check. At the time she tendered the check to the Respondent Ms. Cesar was under the impression that the Respondent was an appraiser who could lawfully perform the appraisal sought. The Respondent did not advise Ms. Cesar that he was only a trainee appraiser and that his supervisor would have to sign any appraisal report generated in connection with the Cesar property. Additionally, at that time, the Respondent’s supervising appraiser, Harvel Gray, was not aware of the appraisal assignment from Ms. Cesar, did not authorize the Respondent to accept the job, and did not authorize the Respondent to accept payment for the appraisal in his individual name. The funds for the Cesar appraisal were not forwarded to Mr. Gray. When Ms. Cesar asked the Respondent for the appraisal she had paid for, the Respondent told her it was illegal for him to give her a copy of the appraisal. She did not understand why she had paid $550.00 and was not provided with a copy of the appraisal. Ms. Cesar had planned to build a house on the vacant lot. She believed the Respondent could facilitate that project as he represented to her that he could get plans drawn, perform the appraisal, and help her through the entire process. In total Ms. Cesar paid the Respondent over $2000.00 to further the construction of the house. On or about July 7, 2003, an authorized representative of the Department, Jonathan Platt, contacted the Respondent and requested that the Respondent provide a copy of the appraisal performed for Ms. Cesar. On or about August 11, 2003, the Respondent produced a “comparative market analysis” report (the report) dated December 27, 2002, for the subject property (Ms. Cesar’s vacant lot). The report was on a Uniform Residential Appraisal Report form and identified the Respondent as the appraiser. Additionally, the form noted the Respondent’s license number as 0005168. The report did not indicate that the report had been reviewed or approved by a licensed appraiser. The report claimed the analysis was both “as is” and subject to the completion of work as specified in plans and specifications. There were no plans or specifications attached or included with the report. The report was not signed by a licensed real estate appraiser. After review of the report, Mr. Platt asked the Respondent for the work file that supported the appraisal report. Requests for the work file were made on August 12, 2003, September 30, 2003, and October 1, 2003. As of the time of hearing the Respondent had not made such file available to the Department. Harvel Gray is a licensed real estate appraiser. Mr. Gray appraises real estate and equipment and knows the Respondent. Mr. Gray met the Respondent when he applied to become a trainee appraiser about five years ago. For approximately three or four months Mr. Gray was technically the Respondent’s supervisor but performed no appraisals with the Respondent. In fact, Mr. Gray terminated his relationship with the Respondent before any appraisals could be performed. Mr. Gray did not know anything about the appraisal that was to be performed for Ms. Cesar. Ken Drummond is also a licensed real estate appraiser. Mr. Drummond knows the Respondent from a Gold Coast continuing education class. Mr. Drummond has never been the Respondent’s supervising appraiser. Mr. Drummond has not performed appraisals with the Respondent. According to licensing records, the only supervising appraiser with whom the Respondent was listed during the pertinent period of time as an appraiser trainee was Mr. Gray. Neither Gray nor Drummond authorized the Respondent to perform an appraisal or complete the report for Ms. Cesar. Neither Gray nor Drummond authorized the Respondent to accept payment from Ms. Cesar for any work. Jonathan Platt, the investigator assigned to this case, spoke with the Respondent and exchanged written information with him. The Respondent did not provide information requested by Mr. Platt and did not explain how the report was generated. According to Mr. Platt the Respondent maintained that Mr. Drummond was his supervising appraiser during the time the Cesar report was performed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a Final Order that finds the Respondent guilty of the violations outlined by the Administrative Complaint and revokes his license as a real estate appraiser trainee. S DONE AND ENTERED this 30th day of August, 2005, in Tallahassee, Leon County, Florida. ___________________________________ J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of August 2005. COPIES FURNISHED: Elizabeth Vieira, Director Division of Real Estate 400 West Robinson Street Suite 802 North Orlando, Florida 32801 Leon Biegalski, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Alpheus C. Parsons, Esquire Department of Business and Professional Regulation Hurston Building, North Tower, Suite N801 400 West Robinson Street Orlando, Florida 32801 Omari Murray 201 Southwest 11th Avenue Boynton Beach, Florida 33435
