06-003720PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Donald Lee Price Status: Closed Recommended Order on Thursday, May 3, 2007.

Summary: Respondent was not shown to have violated the standards for appraisers.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND ) )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

) Case No. 06-3720PL

vs. )

)

DONALD LEE PRICE, )

)

Respondent. )

RECOMMENDED ORDER

Notice was provided and on February 16, 2007, a formal

hearing was held in this case in accordance with Sections 120.569

and 120.57(1), Florida Statutes (2006). The hearing was

conducted by video-teleconferencing between sites in Tallahassee

and Jacksonville, Florida. The case was heard by Charles C.

Adams, Administrative Law Judge.

APPEARANCES

For Petitioner: Racquel A. White, Esquire

Department of Business and

Professional Regulation

Hurston Building, North Tower

400 West Robinson Street, Suite N 801

Orlando, Florida 32801

For Respondent: Martin A. Pedata, Esquire

Martin A. Pedata, P.A.

150 Wildwood Road

Deland, Florida 32720

STATEMENT OF THE ISSUE

Should the Florida Real Estate Appraisal Board (the Board)

take action against Respondent, a certified residential appraiser

(appraiser) for violations under Chapter 475, Part II, Florida

Statutes (2005).

PRELIMINARY STATEMENT

On April 6, 2006, the Board in Florida Department of

Business and Professional, Division of Real Estate, Petitioner,

vs. Donald Lee Price, Respondent , FDBPR Case No. 2005044720,

charged Respondent with violations of Chapter 475, Part II,

Florida Statutes (2005), in his capacity as an appraiser. The

Administrative Complaint alleged in pertinent part:

4. On or about July 19, 2005, Donald Lee

Price (Respondent) developed and communicated

an appraisal report for property commonly

known as 4409 Moncrief Road, Jacksonville, FL

32209 (Subject Property), and estimated its

value at $27,000. . . .

5. Respondent failed to state in the Report

that the Subject Project subdivision is 58%

investor owned, and only 42% owner occupied.

Respondent failed to utilize the Income

Approach in the Report.

6. Respondent misstated that the price range

in the Subject Property neighborhood was

between $12,000 and $216,000. This was a

typographical error; the high end number was

supposed to have been '$21,6000.'

7. Respondent misstated that the Subject

Property was attached, when it is actually a

detached townhouse.

8. Respondent misstated that the Subject

Property had four (4) window air conditioning

units, when it actually has three (3).

9. There was no documentation in the work

file to support the land value and site

improvement estimates reached in the Cost

Approach section of the Report.

10. There was no documentation in the work

file to support the $500 negative adjustment

made to comparable sale 3 for its screened-in

porch in the Sales Comparison Analysis

section of the Report.

Based upon those alleged facts, the Board in six separate counts

accuses the Respondent of violating Chapter 475, Part II, Florida

Statutes (2005), together with standards rules within the Uniform

Standards of Professional Appraisal Practice (2005), commonly

known as USPAP. Those counts to the Administrative Complaint are

explained in the conclusions of law.

Respondent was provided a form referred to as an "Election

of Rights." It allowed Respondent to decide among options in

addressing the Administrative Complaint. He chose to dispute the

allegations of fact contained in the Administrative Complaint.

By that choice he was perceived as petitioning for a formal

hearing pursuant to Section 120.57(1), Florida Statutes, by

signing his election under oath on June 20, 2006.

On October 2, 2006, the Division of Administrative Hearings

(DOAH), in the person of Robert Cohen, Director and Chief Judge,

received the request for formal hearing, together with a copy of

the Administrative Complaint and Election of Rights form. The

case was assigned to the present administrative law judge as DOAH

Case No. 06-3720PL.

The case was originally set to be heard on December 19,

2006. Respondent, pro se , filed a request for continuance, which

was opposed. On October 24, 2006, an order was entered denying

the request for continuance.

Respondent, pro se , filed a "Request for Subpoena Order to

Compel." Petitioner filed a response in opposition to that

request. On December 6, 2006, an order was entered denying the

request to compel.

On December 12, 2006, Respondent's attorney filed his

appearance. On that date Respondent moved to continue the

hearing. That motion was unopposed. On December 15, 2006, an

order was entered granting the continuance and rescheduling the

hearing to be heard on February 16, 2007.

Petitioner presented James Love and James Pierce as its

witnesses. Petitioner's Exhibit numbered 2, pages 73 through 210

and Petitioner's Exhibit numbered 9 were admitted. Respondent

testified in his own defense. Respondent's Exhibit numbered 1

was admitted. Respondent's Exhibit numbered 2 was denied

admission. All exhibits are included with this record.

Petitioner requested official recognition of Sections

475.624 and 475.629, Florida Statutes (2005) and standards rules

1-1, 1-4, 1-6, and 2-1, USPAP (2005), as mentioned in the

Administrative Complaint. Official recognition was made in

relation to the statutes and standards rules.

On March 22, 2007, the hearing transcript was filed. On

April 2, 2007, the parties filed proposed recommended orders,

which have been considered in preparing the Recommended Order.

FINDINGS OF FACT

1. Respondent holds certificate no. RD-3933, as a certified

residential appraiser issued by the Department of Business and

Professional Regulation in accordance with Chapter 475, Part II,

Florida Statutes (2005).

2. Respondent's certificate is in an active status. His

business address is 2302 Mitchell Place, Jacksonville, Florida,

according to Petitioner's records.

3. Kadrina E. Jackson owned property at 4409 Moncrief Road,

Jacksonville, Florida, in Washington Heights Estates. A town

home was located on the property. James F. Love attempted to

purchase the property from Ms. Jackson. As part of the

transaction Respondent performed a residential appraisal in

relation to the property and rendered a Uniform Residential

Appraisal Report (report) for which he charged $300. On July 19,

2005, the report was signed.

4. The sales price for the property was $27,000. The

appraised value was $27,000.

5. Mr. Love believed that the appraisal was incorrect and

filed a complaint with Petitioner.

6. James Pierce is Petitioner's investigator assigned to

the case. He has worked with the agency for over 12 years. His

background includes several instructional courses sponsored by

the Division of Real Estate. He has taken the approved AB-1

appraisal course and successfully completed the program. The

AB-1 appraisal course is for persons who wish to become licensed

trainee appraisers. He has conducted approximately 50 appraisal

investigations.

7. As part of the investigation of the complaint by

Mr. Love, Investigator Pierce interviewed Respondent and others.

Mr. Pierce conducted a physical inspection of the property in

question from the outside and did research concerning the

underlying information within the report.

8. Investigator Pierce requested Respondent to provide a

true and complete copy of the report under consideration, in

addition to a complete copy of the work file of the work done in

completing that report. Mr. Pierce also requested Respondent to

provide the investigator a complete copy of previous reports that

have been conducted by River City Appraiser Services, Inc. (River

City) where Respondent worked. As requested, Respondent provided

information for the Moncrief property associated with the July 9,

2005 report but not previous reports as completed by River City.

9. In relation to the section of the report dealing with

the cost approach, it was commented:

Due to the age of the subject improvements,

development of reproduction costs (an exact

replica) or replacement costs (new

construction) could be misleading because

the building codes have changed and building

labor and material costs fluctuate. This

section was used to determine land value

only. Estimated remaining economic life:

40 years.

The cost approach did not lead to a determination of the

appraised value as $27,000. It referred to site value at $5,000

and the "as is" value of site improvements as $5,000.

10. When Mr. Pierce reviewed materials submitted by

Respondent, he did not find separate calculations that would

support the land value and site improvement estimates listed in

the cost approach section found in the report.

11. Three comparable sales are listed in the report.

Comparable sale one dates from February 2005. Comparable sale

two dates from January 2005. Comparable sale three dates from

May 2005.

12. All comparable properties in the report were in the

same subdivision where the Subject Property is found. The sale

prices ranged from $23,000 to $27,000, with the median sales

price being $24,500.

13. Investigator Pierce did not find documentation designed

to support a $500 negative adjustment for the screen porch in

comparable sale three within the sales comparison section to the

report.

14. The report indicates that predominate occupancy in the

neighborhood is owner-occupancy with 0 to 5% vacancy. Respondent

told Mr. Price that no research had been done in relation to that

determination and no supporting documentation was found in the

work file that would indicate the predominant occupancy as being

owner occupancy.

15. The report indicates information about single-family

housing sales and a price range from $12,000 to $216,000, whereas

Respondent's work file provided information on several properties

that were available and had been sold recently as being a range

between $12,000 and $69,000, excluding the $216,000 reference.

16. The report under general description indicated that the

house is attached. From his most recent observation Mr. Pierce

considered the townhouse to be detached. Investigator Pierce's

prior knowledge of the neighborhood is that individual housing

units have exterior walls, which when originally built were

approximately one inch in separation from the next unit. He is

not sure whether that condition (one inch separation) exists

today. He cannot attest to it with certainty.

17. The report refers to four window a/c units in the

townhouse. Mr. Pierce in his physical inspection of the property

from the outside of the property and based upon photos of the

property found within the report, believes that there are only

three window air-conditioning units.

18. The neighborhood where the subject home is found has

several types of property: two-story town home properties with

two to four bedrooms; single-story units that have two bedrooms

and one bath; and properties that are designed as duplexes with

common walls. With the exception of the duplexes, the lots are

zero lot line properties. The reference to zero lot line in this

case refers to the lot line beginning and ending at the exterior

walls of an individual unit.

19. Respondent's reason for describing the property as an

attached unit is based upon his observation that the unit

exterior wall touches the next door property wall. He observed

that when you stand in front of the property you cannot see

between those two buildings.

20. In deciding that the property was a townhouse,

Respondent used the Marshall and Swift Residential Cost Handbook.

The definition within that reference source considers townhouses

to be single-family attached residences.

21. Respondent determined that the predominant occupancy in

the neighborhood was owner-occupancy based upon by driving

through the neighborhood. The determination of predominant

occupancy involved looking at some public records and the

Multiple Listing Service (MLS). When someone let Respondent in

the home that is at issue, he asked the question "Hey are there a

lot of renters in here or people own." That person believed that

most people in the neighborhood owned the homes. He arrived at

an occupancy rate by that same process of driving around the

neighborhood.

22. Following the inspection of the Subject Property,

Respondent looked into comparables through information pulled

from the MLS.

23. The Subject Property had not been renovated. It had

not be updated. It had no central heating or air. In trying to

locate comparables, Respondent looked for properties that were

similar in their condition.

24. The first comparable was half a mile from the Subject

Property.

25. In comparing comparable two with the Subject Property,

Respondent recognized that each had two bedrooms and a single

bath.

26. The reference to the minus $500 within the report for

comparable three and the screen porch, was to reflect the fact

that the Subject Property did not have a screen porch. It is

inferred that Respondent was attempting to reflect similarities

for comparison purposes by deleting a feature that is found in

the comparable, not found in the Subject Property. The value of

the screen porch was determined on the basis of Respondent's

experience and use of the Marshall and Swift Handbook.

Concerning the lack of documentation in Respondent's work file,

Respondent did not believe that it was necessary to do anything

other than utilize the reference book to arrive at his

determination.

27. As he explained, Respondent determined the $12,000 to

$216,000 range of prices in his report by resort to the MLS. The

reference source reflected a $216,000 amount at the extreme. The

range of prices for sales in neighborhoods like the Washington

Heights subdivision were from $12,500 through the $216,000

according to the MLS. The next highest was $69,000. The

reference to $216,000 for a sale in the MLS seemed "odd" to

Respondent. He did not double check to verify that the sale of

the home was $216,000 through a review of public records, not

believing that this was necessary in the conduct of his business.

28. The basis for indicating that four a/c units were

located at the townhouse, was Respondent's observation that there

were two in the front and two in the back. Whether three or four

units were found at the home would not affect the appraisal from

Respondent's perspective. The a/c units were not part of his

determination of $27,000 appraised value.

29. In preparing the report Respondent did not utilize the

cost approach. The only reason for referring to the cost

approach in the report was that the lender had requested an

opinion of the land value for insurance purposes.

30. There was an earlier version of the report on the

Subject Property that did not reflect the site value or land

value which had been requested to be included later on. The

earlier version without the indication of the site value with

improvements was not provided to Investigator Pierce. With the

change requested by the lender, to include the site value with

improvements, Respondent did not maintain the earlier report that

did not reflect the site value.

31. The determination of the appraised value did not

utilize the income approach either.

32. The basis for determination was the sales comparison

approach.

33. Given that there was no determination utilizing the

cost approach or income approach, Respondent had no documentation

available to explain those approaches.

34. In the addendum to the report under the final

reconciliation Respondent did comment, "Investors are active in

the area with possible unrecorded sales."

CONCLUSIONS OF LAW

35. The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding in accordance with Sections 120.569, 120.57(1), and

455.225, Florida Statutes (2006).

36. In this case the Board has disciplinary authority in

accordance with Section 475.624, Florida Statutes (2005), which

states:

Discipline.-The board . . . may reprimand or

impose an administrative fine not to exceed

$5,000. for each count or separate offense

against any such appraiser; and may revoke or

suspend, for a period not to exceed ten years

. . . certification of any such appraiser, or

place any such appraiser on probation . . .

That provision goes on to describe specific grounds for

discipline, some of which are implicated in this action.

37. Respondent is a "certified residential appraiser" who

holds certificate number RD-3933 issued by the Department on

February 12, 2003. § 475.612 Fla. Stat. (2006).

38. In relation to this case the following definitions

pertain. § 475.611, Florida Statutes (2005):

(1) As used in this part, the term:

(a) "Appraisal" or "appraisal services" means

the services provided by certified or licensed

appraisers or registered trainee appraisers,

and includes:

1. "Appraisal assignment" denotes an

engagement for which a person is employed or

retained to act, or could be perceived by

third parties or the public as acting, as an

agent or a disinterested third party in

rendering an unbiased analysis, opinion,

review, or conclusion relating to the nature,

quality, value, or utility of specified

interests in, or aspects of, identified real

property.

* * *

(c) "Appraisal report" means any

communication, written or oral, of an

appraisal, appraisal review, appraisal

consulting service, analysis, opinion, or

conclusion relating to the nature, quality,

value, or utility of a specified interest in,

or aspect of, identified real property, and

includes any report communicating an appraisal

analysis, opinion, or conclusion of value,

regardless of title. However, in order to be

recognized in a federally related transaction,

an appraisal report must be written.

* * *

(f) "Appraiser" means any person who is a

registered trainee real estate appraiser,

licensed real estate appraiser, or a certified

real estate appraiser. An appraiser renders a

professional service and is a professional

within the meaning of s. 95.11 (4)(a).

(g) "Board" means the Florida Real Estate

Appraisal Board established under this

section.

* * *

(i) "Certified residential appraiser" means a

person who is certified by the department as

qualified to issue appraisal reports for

residential real property of one to four

residential units, without regard to

transaction value or complexity, or real

property as may be authorized by federal

regulation.

(j) "Department" means the Department of

Business and Professional Regulation.

* * *

(o) "Uniform Standards of Professional

Appraisal Practice" means the most recent

standards approved and adopted by the

Appraisal Standards Board of the Appraisal

Foundation.

* * *

(q) "Work file" means the documentation

necessary to support an appraiser's analysis,

opinions, and conclusions.

39. Petitioner bears the burden of proof in this

disciplinary case. Proof sufficient to sustain the allegations

in the Administrative Complaint must be by clear and convincing

evidence. See § 120.57(1)(j), Fla. Stat. (2006), and Department

of Banking and Finance Division of Securities and Investor

Protection v. Osborne Stern and Co. , 670 So. 2d 932 (Fla. 1996)

and Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987).

The term clear and convincing evidence is explained in the case

In re: Davey , 645 So. 2d 398 (Fla. 1994), quoting with approval

from Slomowitz v. Walker , 429 So. 2d 797 (Fla. 4th DCA 1983).

40. Recognizing the disciplinary nature of this case

Section 475.624, Florida Statutes (2005), in pertinent part, is

strictly construed in determining whether a violation has

occurred. See State v. Pattishall , 99 Fla. 296 and 126 So. 147

(Fla. 1930); Munch v. Dept. of Bus. and Prof. Reg. , 592 So. 2d

1136 (Fla. 1st DCA 1992); Fleishman v. Dept. of Bus. and Prof.

Reg. , 441 So. 2d 1221 (Fla. 3rd DCA 1983); and Lester v.

Department of Professional and Occupational Regulation, State

Board of Medical Examiners , 348 So. 2d 923 (Fla. 1st DCA 1977).

41. Based upon the factual allegations in the

Administrative Complaint set out in the preliminary statement,

Respondent is charged in Counts I through VI with statutory

violations.

42. Count I states:

. . . Respondent has violated a standard for

the development or communication of a real

estate appraisal, specifically Standard Rule

1-1(a), (b) and (c), or other provision of

the Uniform Standards of Professional

Appraisal Practice (2005) in violation of

Section 475.624(14), Florida Statutes. [1]

43. Section 475.624(14), Florida Statutes (2005), allows

discipline if Respondent:

(14) Has violated any standard for the

development or communication of a real estate

appraisal, . . . or other provision of the

Uniform Standards of Professional Appraisal

Practice.

44. In relation to USPAP (2005) it states:

Standards Rule 1-1 (This Standards Rule

contains binding requirements for which

departure is not permitted.)

In developing a real property appraisal, an

appraiser must:

(a) be aware of, understand, and correctly

employ those recognized methods and

techniques that are necessary to produce a

credible appraisal;

Comment : This Rule recognizes that the

principle of change continues to affect the

manner in which appraisers perform appraisal

services. Changes and developments in the

real estate field have a substantial impact

on the appraisal profession. Important

changes in the cost and manner of

constructing and marketing commercial,

industrial, and residential real estate as

well as changes in the legal framework in

which real property rights and interests are

created, conveyed, and mortgaged have

resulted in corresponding changes in

appraisal theory and practice. Social change

has also had an effect on appraisal theory

and practice. To keep abreast of these

changes and developments, the appraisal

profession is constantly reviewing and

revising appraisal methods and techniques and

devising new methods and techniques to meet

new circumstances. For this reason, it is

not sufficient for appraisers to simply

maintain the skills and the knowledge they

possess when they become appraisers. Each

appraiser must continuously improve his or

her skills to remain proficient in real

property appraisal.

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal; and

Comment : In performing appraisal services,

an appraiser must be certain that the

gathering of factual information is conducted

in a manner that is sufficiently diligent,

given the scope of work as identified

according to Standards Rule 1-2(f), to ensure

that the data that would have a material or

significant effect on the resulting opinions

or conclusions are identified and, where

necessary, analyzed. Further, an appraiser

must use sufficient care in analyzing such

data to avoid errors that would significantly

affect his or her opinions and conclusions.

(c) not render appraisal services in a

careless or negligent manner, such as by

making a series of errors that, although

individually might not significantly affect

the results of an appraisal, in the aggregate

affects the credibility of those results.

Comment : Perfection is impossible to attain,

and competence does not require perfection.

However, an appraiser must not render

appraisal services in a careless or negligent

manner. This Standards Rule requires an

appraiser to use due diligence and due care.

45. Petitioner failed to present a witness that was

established as competent to explain the expectations for

certified real estate residential appraisers concerning

awareness, understanding and correct implementation of recognized

methods and techniques necessary to produce a credible appraisal

as contemplated in USPAP Standards Rule 1-1(a). Similarly,

Petitioner did not present competent evidence concerning the

expectation that a certified residential appraiser not commit

substantial error involving omission or commission that

significantly affects the appraisal as addressed in USPAP

Standards Rule 1-1(b). Finally, Petitioner did not present

competent evidence concerning careless or negligent rendition of

the appraisal services through a series of errors that in the

aggregate affects the credibility of the results as addressed in

USPAP Standards Rule 1-1(c). Nothing in Respondent's testimony

serves to support Petitioner's case so that clear and convincing

evidence may be found that Respondent violated USPAP Standards

Rule 1-1(a) through (c) reflected in Count I. Therefore, no

violation has been established pertaining to Count I.

46. Count II states:

. . . Respondent has violated a standard for

the development or communication of a real

estate appraisal, specifically Standard Rule

1-4(b) and (c), or other provision of the

Uniform Standards of Professional Appraisal

Practice (2005) in violation of Section

475.624(14), Florida Statutes.

47. In relation to USPAP (2005) it states:

Standards Rule 1-4 (This Standards Rule

contains specific requirements from which

departure is permitted. See the DEPARTURE

RULE.)

In developing a real property appraisal, an

appraiser must collect, verify, and analyze

all information applicable to the appraisal

problem, given the scope of work identified

in accordance with Standards Rule 1-2(f).

* * *

(b) When a cost approach is applicable, an

appraiser must:

(i) develop an opinion of site value by an

appropriate appraisal method or technique;

(ii) analyze such comparable costs data as

are available to estimate the cost new of the

improvements (if any); and

(iii) analyze such comparable data as are

available to estimate the difference between

the cost new and the present worth of the

improvements (accrued depreciation).

(c) When an income approach is applicable,

an appraiser must:

(i) analyze such comparable rental data as

are available and/or the potential earnings

capacity of the property to estimate the

gross income potential of the property;

(ii) analyze such comparable operating

expense data as are available to estimate the

operating expenses of the property;

(iii) analyze such comparable data as are

available to estimate rates of capitalization

and/or rates of discount; and

(iv) base projections of future rent and/or

income potential and expenses on reasonably

clear and appropriate evidence.

Comment : In developing income and expense

statements and cash flow projections, an

appraiser must weigh historical information

and trends, current supply and demand factors

affecting such trends, and anticipated events

such as competition from developments under

construction.

48. As before, no competent evidence was presented

concerning the occasion in which a certified residential

appraiser would find a cost approach or an income approach

applicable that would impose the substantive requirements within

the rule. The only competent evidence on this subject was

provided by Respondent who gave reasons for not applying the cost

approach and income approach in this appraisal. Therefore, clear

and convincing evidence has not been presented to show a

violation as alleged in Count II.

49. Count III alleges that:

. . . Respondent has violated a standard for

the development or communication of a real

estate appraisal, specifically Standard Rule

1-6(a) and (b), or other provision of the

Uniform Standards of Professional Appraisal

Practice (2005) in violation of Section

475.624(14), Florida Statutes.

50. In relation to USPAP (2005) it states:

Standards Rule 1-6 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

In developing a real property appraisal, an

appraiser must:

(a) reconcile the quality and quantity of

data available and analyzed within the

approaches used; and

(b) reconcile the applicability or

suitability of the approaches used to arrive

at the value conclusion(s).

Comment : See the Comments to Standards Rules

2-2(a)(ix), 2-2(b)(ix), and 2-2(c)(ix) for

corresponding reporting requirements.

No competent evidence was presented concerning attempts by

Respondent to reconcile the quality and quantity of the data

available and the data analyzed within the approach used in

performing the appraisal. Respondent's testimony concerning the

quality and quantity of data available and analyzed in the sales

comparison approach used did not point to a lack of

reconciliation between the quality and quantity of data available

and analyzed in performing the appraisal. No competent evidence

was presented by Petitioner to prove the lack of reconciliation

as to the applicability or suitability of the approach used to

arrive at the value conclusion in the appraisal. Respondent in

his testimony explained the approach in arriving at the value and

the reason for the approach without conceding a lack of

reconciliation. No violation in relation to Count III has been

established.

51. Concerning the allegations in Count IV it is alleged:

. . . Respondent has violated a standard for

the development or communication of a real

estate appraisal, specifically Standard Rule

2-1(a) and (b), or other provision of the

Uniform Standards of Professional Appraisal

Practice (2005) in violation of Section

475.624(14), Florida Statutes.

52. In relation to USPAP (2005) it states:

Standards Rule 2-1 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

Each written or oral real property appraisal

report must:

(a) clearly and accurately set forth the

appraisal in a manner that will not be

misleading;

(b) contain sufficient information to enable

the intended users of the appraisal to

understand the report properly;

* * *

No competent evidence was presented that would prove lack of

clarity or accuracy in setting forth the appraisal such as not to

mislead. Respondent's testimony offered no concession as to the

clarity and accuracy of the appraisal in the interest of avoiding

a misleading impression. No competent evidence was presented

concerning the sufficiency of the information as it might enable

the intended user of the appraisal to properly understand the

report; this from the side of Petitioner. Respondent's testimony

did not concede that the report was not sufficient in its

information to allow the intended user to properly understand the

report. Petitioner has failed to prove a violation in Count IV.

53. Count V states:

Respondent is guilty of having failed to

exercise reasonable diligence in developing

an appraisal report in violation of Section

475.624(15), Florida Statutes.

54. Section 475.624(15), Florida Statutes (2005), allows

discipline if Respondent:

Has failed or refused to exercise reasonable

diligence in developing an appraisal or

preparing an appraisal report.

Again, no competent evidence was presented from a person with

sufficient insight into what constitutes reasonable diligence on

the part of a certified residential appraiser when developing an

appraisal or in preparing a report to allow a legal conclusion to

be reached. No competent proof was presented by Petitioner in

that regard. Respondent in his testimony did not concede a lack

of reasonable diligence in the development of the appraisal in

preparation of the report. Therefore, no violation has been

shown concerning Count V.

55. To summarize, Counts I through V contemplate the need

to place Respondent's acts in the context of conformance with

standards appropriate for certified residential appraisers.

Without testimony from a certified residential appraiser or

someone with equivalent credentials who has been qualified to

express an opinion concerning Respondent's compliance with

applicable standards related in the statute and USPAP it cannot

be determined whether a violation(s) occurred. Petitioner did

not present a person who was qualified to testify in that manner.

Investigator Pierce was presented as a witness. His background

was established in the record and reported in the findings of

fact. He gathered facts and testified concerning those facts.

He explained his understanding of certain terminology given his

background. He was not qualified as an expert for purposes of

offering opinion testimony concerning Respondent's compliance

with standards applicable to a certified residential appraiser.

It would be inappropriate to infer from his testimony that it

constituted an opinion concerning Respondent's performance in

relation to those standards.

56. On the subject of the underlying facts alleged in the

Administrative Complaint, it was not established that the Subject

Property is found within a subdivision which is 58 percent

investor-owned and 42 percent owner occupied as alleged.

Respondent did not use the income approach in the report (but it

was not shown to have legal significance). There was a basis for

Respondent's belief that the price range for sales in the

neighborhood was between $12,500 and $216,000, taken from the

MLS. Clear and convincing evidence was not presented to prove

that the townhouse was detached when Respondent had claimed that

it was attached. Clear and convincing evidence was not presented

to prove that the Subject Property had three air-conditioning

window units when the appraisal was performed, as contrasted with

the four air-conditioning units that Respondent noted in the

report. Separate documentation in the work file that explains

the land value and site improvement estimates in the cost

approach section to the report was not found. Nor was there

documentation in the work file to support the $500 negative

adjustment on comparable sale three in relation to the screen

porch and the sales comparison analysis section of the report

(but it was not shown to have legal significance).

57. Count VI states:

. . . Respondent is guilty of failing to

retain, for at least five years, original or

true copies of any contracts engaging the

appraiser's services, appraisal reports, and

supporting data assembled and formulated by

the appraiser in preparing appraisal reports

in violation of Section 475.629, Florida

Statutes and, therefore, in violation of

Section 475.624(4), Florida Statutes.

58. Section 475.629, Florida Statutes (2005), states:

Retention of records. --An appraiser

registered, licensed, or certified under this

part shall retain, for at least 5 years,

original or true copies of any contracts

engaging the appraiser's services, appraisal

reports, and supporting data assembled and

formulated by the appraiser in preparing

appraisal reports. The period for retention

of the records applicable to each engagement

of the services of the appraiser runs from the

date of the submission of the appraisal report

to the client. These records must be made

available by the appraiser for inspection and

copying by the department on reasonable notice

to the appraiser. If an appraisal has been

the subject of or has served as evidence for

litigation, reports and records must be

retained for at least 2 years after the trial.

59. Section 475.624(4), Florida Statutes (2005), allows

discipline if Respondent:

Has violated any of the provisions of this

section or any lawful order or rule issued

under the provisions of this section or

chapter 455.

60. The failure to comply with the retention requirements

at Section 475.629, Florida Statutes (2005), does not constitute

a violation of a lawful order or rule issued under the provisions

of the aforementioned section or Chapter 455. By extension it

could arguably be considered a violation of Section 475.624(1),

Florida Statutes (2005), that allows discipline if Respondent:

(1) Has violated any provisions of this part

or s. 455.227 (1); however, certificate-

holders, registrants, and licensees under this

part are exempt from the provisions of s.

455.227 (1)(i).

Section 475.629, Florida Statutes (2005), is found within Chapter

475, Part II, Florida Statutes (2005).

61. When considering the factual allegations in the

Administrative Complaint, no facts were alleged concerning the

lack of retention of "contracts engaging the appraiser's

services, reports, and supporting data assembled and formulated

by the appraiser in preparing the appraisal reports." See

Cottrill , supra . The allegations are related to other acts or

omissions on Respondent's part as explained. They do not involve

retention per se of the various categories of information set out

in Section 475.629, Florida Statutes (2005). See Trevisani v.

Department of Health , 908 So. 2d 1108 (Fla. 1st DCA 2005).

62. Without a relationship between what the Administrative

Complaint refers to as the "foregoing", meaning the Essential

Allegations of Material Fact, and Count VI to the Administrative

Complaint with some precision, a violation should not be found. 2/

No violation has been proven in accordance with Count VI.

RECOMMENDATION

Based upon 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 3rd 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

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of May, 2007.

ENDNOTES

1/ The reference within Counts I through IV to violations of

"other provisions of the Uniform Standards of Professional

Appraisal Practice (2005)" is understood to mean the specific

allegations found within those Counts and not otherwise, when

considering the need to provide Respondent reasonable notice of

the conduct that would warrant the imposition of discipline. See

Cottrill v. Department of Insurance , 685 So. 2d 1371 (Fla. 1st DCA

1996).

2/ The suggestion in Petitioner's proposed recommended order that

the problem pertaining to Count VI is associated with the failure

to retain documentation in the work file on predominate

ownership/occupancy in the Subject Property neighborhood, to

support land value and site improvement estimates and the

determination of the $500 negative adjustment on comparable sale

three when it was never there to begin with makes no sense.

COPIES FURNISHED:

Racquel A. White, Esquire

Department of Business and

Professional Regulation

Hurston Building, North Tower

400 West Robinson Street, Suite N 801

Orlando, Florida 32801

Martin A. Pedata, Esquire

Martin A. Pedata, P.A.

150 Wildwood Road

Deland, Florida 32720

Michael Martinez, Acting General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Michael E. Murphy, Director

Division of Real Estate

Department of Business and

Professional Regulation

Hurston Building, North Tower

400 West Robinson Street, Suite N 802

Orlando, Florida 32801

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.