09-002491PL Department Of Business And Professional Regulation, Division Of Real Estate vs. Miguel A. Murciano Status: Closed Recommended Order on Monday, November 2, 2009.

Summary: Clear and convincing evidence established that Respondent committed the statutory and USPAP violations lleged in the Amended Administrative Complaint. Recommend license revocation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF REAL ESTATE, )

)

Petitioner, )

)

vs. ) Case No. 09-2491PL

)

MIGUEL A. MURCIANO, )

)

Respondent. )

__________________________________)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case

pursuant to Sections 120.569 and 120.57(1), Florida Statutes, 1

before Stuart M. Lerner, a duly-designated Administrative Law

Judge of the Division of Administrative Hearings (DOAH), on

August 21, 2009, by video teleconference at sites in Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Donna C. Lindamood, Esquire

Senior Attorney

Department of Business and

Professional Regulation

400 West Robinson Street, N#802

Orlando, Florida 32801-1900

For Respondent: Steven W. Johnson, Esquire

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether Respondent committed the violations alleged in the

Amended Administrative Complaint issued against him and, if so,

what penalty should be imposed.

PRELIMINARY STATEMENT

On or about March 2, 2009, Petitioner issued a five-count

Amended Administrative Complaint alleging that, in connection

with an appraisal he conducted of property located at 7150

Southwest 5th Street in Miami, Florida (Subject Property) on or

about January 27, 2006, Respondent violated Standards Rule 1-

1(a), (b), and (c) of the Uniform Standards of Professional

Appraisal Practice (2005) and therefore also Section

475.624(14), Florida Statutes (2005) (Count I); Standards Rule

2-1(a) of the Uniform Standards of Professional Appraisal

Practice (2005) and therefore also Section 475.624(14), Florida

Statutes (2005) (Count II); Standards Rule 2-2(b)(ix) of the

Uniform Standards of Professional Appraisal Practice (2005) and

therefore also Section 475.624(14), Florida Statutes (2005)

(Count III); Section 475.629, Florida Statutes (2005) and

therefore also Section 475.624(4), Florida Statutes (Count IV);

and Section 475.624(15), Florida Statutes (2005) (Count V). The

Amended Administrative Complaint contained 23 numbered

paragraphs of "Essential Allegations of Material Fact" upon

which these charges were based.

On or about April 1, 2009, Respondent, through his

attorney, filed a Renewed Petition for Formal Hearing. On

May 13, 2009, the matter was referred to DOAH to conduct the

hearing Respondent had requested.

As noted above, the hearing was held on August 21, 2009. 2

Five witnesses testified at the hearing: Brian Piper, Maria

Lugo, Philip Spool, Respondent, and Julio Potestad. Of these

witnesses, only Mr. Spool, a Florida-certified general real

estate appraiser who testified on behalf of Petitioner, gave

expert testimony concerning appraisal development and

communication standards. 3 In addition to the foregoing

testimonial evidence, 13 exhibits (Petitioner's Exhibits 1

through 12, and Respondent's Exhibit 1) were offered and

received into evidence.

At the request of the parties, the undersigned set the

proposed recommended order filing deadline at 30 days from the

date of the filing with DOAH of the hearing transcript.

The hearing Transcript (consisting of one volume) was filed

with DOAH on September 18, 2009. Respondent and Petitioner

filed their Proposed Recommended Orders on October 15 and 16,

2009, respectively.

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

1. Respondent is now, and has been since January 12, 2005,

a Florida-certified residential real estate appraiser, holding

license number RD 4946. He has not been the subject of any

prior disciplinary action.

2. During the time he has been licensed, Respondent has

supervised various registered trainee appraisers, including

Julio Potestad, who worked under Respondent's supervision from

March 17, 2006, through February 26, 2007, and has remained

"very good friends" with him. 4

3. At all times material to the instant case, the Subject

Property has been zoned by the City of Miami as R-1, which

allows only single-family residences.

4. In January of 2006, Respondent was working as a

residential real estate appraiser for Appraisals of South

Florida, Inc., a business owned by Anthony Pena, when he

received an assignment to conduct an appraisal of the Subject

Property for Coast to Coast Mortgage Brokerage, Inc. (Coast).

Gustavo Ceballos had agreed to buy the Subject Property from

Jorge Vazquez for $395,000, and Mr. Ceballos had applied for a

mortgage loan from Coast to make the purchase. The purpose of

the appraisal was to determine whether the market value of the

Subject Property justified Coast's making the loan.

5. The written appraisal request from Coast was dated

January 24, 2006, and directed to Mr. Potestad, who was working

for Mr. Pena at the time. It indicated that the "[p]roperty

[t]ype" of the Subject Property was "SFR" (meaning single-family

residence). Attached to the request was a copy of a signed, but

undated, copy of a "[s]ales contract" for the Subject Property.

6. Using a pre-printed form, Respondent completed a

Summary Appraisal Report (Report), dated January 31, 2006,

containing his opinion that the market value of the Subject

Property as of January 27, 2006 (the reported "date of

[Respondent's] inspection" of the Subject Property) was $395,000

(which happened to be the contract price). He arrived at his

opinion by conducting a sales comparison analysis and a cost

analysis (but not an income analysis).

7. On January 5, 2006, just three weeks and a day prior to

the reported "date of [Respondent's] inspection," City of Miami

Code Enforcement Officer Maria Lugo had inspected the interior

and exterior of the Subject Property at the request of the

owner, Mr. Vazquez, who had contacted Ms. Lugo after she had

"posted on the property" a code violation notice.

8. Ms. Lugo's January 6, 2006, inspection had revealed

that the Subject Property was not a single-family residence, but

rather a nonconforming four-unit, multi-family structure (with

each unit having an exterior door and there being no interior

access between units) and, further, that various additions and

improvements (including additional bathrooms and kitchens, a

metal awning and concrete slab in the rear of the property, a

driveway on the west side of the front of the property, and a

"garage conversion") had been made without a building permit

having been obtained.

9. These were City of Miami code violations for which the

owner of the property could be fined.

10. Extensive work (including demolition work), requiring

building permits, needed to be done to correct these code

violations and reconvert the structure to a legal, single-family

dwelling.

11. As of January 27, 2006 (the reported "date of

[Respondent's] inspection"), no building permit to perform work

on the Subject Property had been obtained, and the code

violations Ms. Lugo had found 22 days earlier had not yet been

corrected.

12. As he indicated in the Report, Respondent appraised

the Subject Property as a single-family residence (with four

bedrooms and three baths), even though, as of January 27, 2006,

it was a multi-family structure (as an appropriate inspection by

a reasonably prudent residential real estate appraiser would

have revealed). 5 Doing so was a substantial and fundamental

error that was fatal to the credibility of Respondent's market

value opinion.

13. The first page of Respondent's Report contained five

sections: "Subject," "Contract," "Neighborhood," "Site," and

"Improvements."

14. The "Subject" section of the Report read, in pertinent

part, as follows:

Property Address: 7150 SW 5th Street

City: Miami

State: FL

Zip Code: 33144-2709

* * *

Occupant: X Owner _ Tenant _ Vacant

* * *

Assignment Type: X Purchase Transaction

_ Refinance Transaction

_ Other (describe)

Lender/Client: Coast to Coast Mortgage

Brokerage, Inc. . . . .

Is the subject property currently offered

for sale or has it been offered for sale in

the twelve months prior to the effective

date of this appraisal? X Yes _ No

Report data source(s) used, offering

price(s), and date(s): The subject property

has a prior sale on July 2005 for $349,000.

Although he provided the "offering price" and "date" of the

"prior sale," Respondent did not reveal, in this section , the

"data source(s) [he] used" to obtain this information. He did,

however, disclose this "data source" (ISC NET 6 ) in a subsequent

section of the Report (the "Sales Comparison Approach" section).

15. The "Contract" section of the Report read, in

pertinent part, as follows:

I X did _ did not analyze the contract for

sale for the subject purchase transaction.

Explain the results of the analysis of the

contract for sale or why the analysis was

not performed. The subject property is

under contract for $395,000[;] financial

assistance noted.

Contract Price: $395,000

Date of Contract: No[t] Provided

Is the property seller the owner of public

record: X Yes _ No

Data Sources: Public Records

Is there any financial assistance (loan

charges, sale concessions, gift or down

payment assistance, etc.) to be paid by any

party on behalf of the borrower?

X Yes _ No

If Yes, report the total dollar amount and

describe the items to be paid: 4% seller

contribution for closing costs and prepaids.

16. As part of the appraisal development process,

"[a]ppraisers are required to obtain a full copy of the contract

[for sale] that's signed and dated." The contract for sale that

Respondent analyzed, and which he has maintained in his work

file on the Subject Property (Work File), however, while signed

by Mr. Vazquez and Mr. Ceballos, was incomplete and not dated.

17. Paragraph 21 of this incomplete and undated contract

for sale provided as follows:

ADDITIONAL TERMS

SELLER WILL PAY 4% OF PURCHASE PRICE

FOR BUYER CLOSING COSTS

PROPERTY SOLD AS IS CONDITIONS

18. In the "Neighborhood" section of the Report,

Respondent identified the boundaries of the "neighborhood" in

which the Subject Property was located, and he stated that the

properties in the neighborhood were either "One-Unit" (95%) or

"Commercial" (5%) properties and that the neighborhood had no

"2-4 Unit" or other "Multi-Family" structures. 7 The following

further representations, among others, were made in the

"Neighborhood" section:

Neighborhood Description: The subject is

located in an established neighborhood

consisting of 1 story ranch style homes

similar to the subject in age, size and

appeal. The subject neighborhood provides a

good environment for the house being

appraised. There are no factors that will

negatively affect marketability of the

subject property. Employment stability and

convenience are reasonable.

Market Conditions (including support for the

above conclusions): The subject is in a

market place in which residential properties

similar to the subject take approximately 3

months to sell. Demand and [s]upply are in

balance with a stable growth rate. These

figures were obtained from the appraiser[']s

observation of the marketing time for

listing and sales within the immediate area

and the ratio of the number of listings to

sales.

19. The "Site" section of the Report read, in pertinent

part, as follows:

* * *

View: Residential

Specific Zoning Classification: R-1

Zoning Description: Single Family

Residential

Zoning Compliance: X Legal _ Legal

Nonconforming (Grandfathered Use)

_ No Zoning _ Illegal (describe)

Is the highest and best use of subject

property as improved (or as proposed per

plans and specifications) the present use?

X Yes _ No If no, describe.

* * *

Are there any adverse site conditions or

external factors (easements, encroachments,

environmental conditions, land use, etc.)?

_ Yes X No If Yes, describe

* * *

20. In the "Improvements" section of the Report,

Respondent indicated, among other things, that the Subject

Property was a one-unit, ranch-style structure built in 1948,

with an "effective age" of 20 years. Next to "Roof Surface"

Respondent entered, "Shingles/Avg." Other information provided

in this section included the following:

Finished area above grade contains: 7

Rooms, 4 Bedrooms, 3 Bath(s) 2,249 Square

Feet of Gross Living Area Above Grade.

* * *

Describe the condition of the property

(including needed repairs, deterioration,

renovation, remodeling, etc.). The subject

conforms to the neighborhood in terms of

age, design and construction. Based upon an

inspection performed by the appraiser on the

subject property[,] [it] does appear to have

roof damage resulting from Hurricane Wilma.

The property's roof exhibits many missing

and/or detached roof shingles.[ 8 ] The

appraiser bases these findings only upon a

visual inspection of the subject. A

thorough roof inspection should be done to

properly assess the full extent of the

damage. The Hurricane does not appear to

have negatively affected the subject area's

economic base.

Are there any physical deficiencies or

adverse conditions that affect livability,

soundness, or structural integrity of the

property? _ Yes X No If Yes, describe

Does the property generally conform to the

neighborhood (functional utility, style,

condition, use, construction, etc.)?

X Yes _ No If No, describe[ 9 ]

21. The second page of Respondent's Report contained two

sections: "Sales Comparison Approach" and "Reconciliation."

22. In the "Sales Comparison Approach" section of the

Report, Respondent identified the three "comparable" properties

that he examined to estimate (using a sales comparison analysis)

the market value of the Subject Property, and he provided

information about these comparables, as well as the Subject

Property.

23. The following were the three "comparables" Respondent

selected for his sales comparison analysis: Comparable Sale 1,

located at 7140 Southwest 7th Avenue in Miami (.14 miles from

the Subject Property); Comparable Sale 2, located at 240

Southwest 69th Avenue in Miami (.28 miles from the Subject

Property); and Comparable Sale 3, located at 7161 Southwest 5th

Terrace in Miami (.06 miles from the Subject Property).

According to the Report, these "comparables," as well as the

Subject Property, were 56 to 58-year-old, single-family (one-

unit) ranch-style residences in "average condition" situated on

lots ranging in size from 6,000 square feet (the Subject

Property and Comparable Sale 3) to 6,565 square feet (Comparable

Sale 1).

24. Comparative information relating to these

"comparables" and the Subject Property was set forth in a grid

(Sales Comparison Grid).

25. On the "Date of Sale/Time" line on the Sales

Comparison Grid, Respondent entered the following:

Comparable Sale 1: December 2005

Comparable Sale 2: November 2005

Comparable Sale 3: Sept. 2005

26. On the "Sale Price" line on the Sales Comparison Grid,

Respondent entered the following:

Subject Property: $395,000

Comparable Sale 1: $380,000

Comparable Sale 2: $387,000

Comparable Sale 3: $390,000

27. On the "Sale Price/Gross Liv" line on the Sales

Comparison Grid, Respondent entered the following:

Subject Property: $236.39 sq. ft.[ 10 ]

Comparable Sale 1: $254.01 sq. ft.

Comparable Sale 2: $195.65 sq. ft.

Comparable Sale 3: $195.00 sq. ft.

28. On the "Data Source(s)" line on the Sales Comparison

Grid, Respondent entered the following:

Comparable Sale 1: ISC NET/MLX[ 11 ]

Comparable Sale 2: ISC NET

Comparable Sale 3: ISC NET/MLX

29. On the "Verification Source(s)" line on the Sales

Comparison Grid, Respondent entered the following:

Comparable Sale 1: Observation from street

Comparable Sale 2: Observation from street

Comparable Sale 3: Observation from street

"Observation from street" is an unacceptable means of verifying

sales price information. An appropriate "Verification Source"

would be an individual involved in some way in the transaction

or, alternatively, a public record.

30. On the "Above Grade Room Count" line of the Sales

Comparison Grid, Respondent entered the following:

Subject Property: 7 (Total); 4 (bdrms.);

3 (Baths).

Comparable Sale 1: 7 (Total); 4 (bdrms.);

3 (Baths).

Comparable Sale 2: 6 (Total); 3 (bdrms.);

2 (Baths).

Comparable Sale 3: 8 (Total); 5 (bdrms.);

4 (Baths).

31. Immediately to the right of the "Above Grade Room

Count" entries for Comparable Sale 2, in the "(-) $ Adjustment"

column, Respondent entered ",000."

32. Immediately to the right of the "Above Grade Room

Count" entries for Comparable Sale 3, in the "(-) $ Adjustment"

column, Respondent entered "-3,000."

33. On the "Gross Living Area" line of the Sales

Comparison Grid, Respondent entered the following:

Subject Property: 2,249 sq. ft.

Comparable Sale 1: 1,496 sq. ft.

Comparable Sale 2: 1,978 sq. ft.

Comparable Sale 3: 2,000 sq. ft.

34. Because its "Gross Living Area" was 753 square feet

(or approximately one-third) less than that of the Subject

Property, Comparable Sale 1 was "way too small in comparison to

the Subject Property to [have] be[een] utilized as a comparable

sale."

35. Immediately to the right of the "Gross Living Area"

square footage entered for Comparable Sale 1, in the "(-)

$ Adjustment" column, was the entry ",825."

36. Immediately to the right of the "Gross Living Area"

square footage entered for Comparable Sale 2, in the "(-)

$ Adjustment" column, was the entry ",775."

37. Immediately to the right of the "Gross Living Area"

square footage entered for Comparable Sale 3, in the "(-)

$ Adjustment" column, was the entry ",225."

38. The upward adjustments Respondent made to the

"comparables'" sales prices to account for the Subject

Property's larger "Gross Living Area" amounted to $25 for each

square foot that the "Gross Living Area" of the Subject Property

exceeded that of the "comparables." Nowhere in the Report, or

in Respondent's Work File, is there any indication of how or why

Respondent selected this $25 a square foot price adjustment.

39. While ISC NET/FARES provides "Gross Living Area"

square footage information (that is gleaned from public

records), MLX does not. In his appraisal of the Subject

Property, Respondent appropriately used "Gross Living Area"

square footage information from ISC NET/FARES for Comparable

Sales 1 and 2; however, for Comparable Sale 3, rather than using

the ISC NET/FARES "Gross Living Area" square footage (which was

1,512 square feet), he instead inappropriately relied on the

square footage figure (2,000) for "Total Area" (which is

different than "Gross Living Area") found in the MLX listing for

the property. This was a substantial error negatively impacting

the soundness of the adjustment he made for "Gross Living Area"

to obtain an "Adjusted Sale Price" for Comparable Sale 3.

40. The MLX listing for Comparable Sale 3 also contained

the following "remarks":

DON'T MISS THIS BEAUTY. PLENTY OF SPACE FOR

THE IN-LAWS. CALL LISTING AGENT. CAN USE

LIKE 2 IN LAWS AND MAIN HOUSE APPROXIMATELY

2000 SF. HOUSE HAVE 3 BEDROOMS 2 BATHS.

YOU CAN USE 2 EFFICIENCIES AND THE HOUSE.

HOUSE TOTALLY REMODELED NEW BATH, NEW

KITCHEN.

These "remarks" suggest that Comparable Sale 3 actually

consisted of not one, but three separate dwelling units ("2

efficiencies" and a "main house"), contrary to the

representation made by Respondent in the Report, and it

therefore should not have been used as a "comparable" to

appraise a single-family residence (which Respondent, in his

Report, mistakenly represented the Subject Property to be).

41. The following "Adjusted Sale Price[s]" for the three

"comparables" were set forth on the last line of the Sales

Comparison Grid: Comparable Sale 1: $398,825; Comparable Sale

2: $396,775; and Comparable Sale 3: $393,225.

42. At the end of the "Sales Comparison Approach" section

(beneath the grid) was the following "Summary of Sales

Comparison Approach":

The subject property is similar to all of

the comparable sales which were carefully

selected after an extensive search in and

out of the subject's defined market. This

search consisted of analyzing numerous

closed sales and narrowing the list down to

the most similar. After close evaluation of

the comparable sales utilized, equal

consideration was given to all comparable

sales in formulating an opinion of market

value.

Indicated Value by Sales Comparison

Approach: $395,000.

43. In arriving at this appraised "value" of $395,000,

Respondent made no adjustments for the damage to the Subject

Property's roof noted in the "Improvements" section of the

Report or for the "4% seller contribution for closing costs"

mentioned in the "Contract" section of the Report; neither did

he provide an explanation as to why he had not made such

adjustments.

44. The first part of the "Reconciliation" section of the

Report read as follows:

Indicated Value by Sales Comparison

Approach: $395,000; Cost Approach (if

developed): $395,614; Income Approach (if

developed): N/A

Final reliance is given to the Sales

Comparison Analysis due to the reliability

of market data and which represents the

motives of the typical purchaser [sic]. The

Cost Approach although not as accurate,

supports value. The Income Approach was not

appropriate for this assignment.

45. In developing his "Cost Approach" estimate of the

market value of the Subject Property (referenced in the first

part of the "Reconciliation" section), Respondent used a

"replacement cost new" figure of $90 a square foot. There was

nothing in the Report or Work File to support or explain his use

of this figure.

46. The second and final part of the "Reconciliation"

section of the Report read as follows:

This appraisal is made x "as is," _ subject

to completion per plans and specifications

on the basis of a hypothetical condition

that the improvements have been completed,

_ subject to the following repairs or

alterations on the basis of a hypothetical

condition that the repairs or alterations

have been completed, or _ subject to the

following required inspection based on the

extraordinary assumption that condition or

deficiency does not require alteration or

repair: Subject to the Statement of

Limiting Conditions and Appraiser's

Certification attached.

Based on a complete visual inspection of the

interior and exterior areas of the subject

property,[ 12 ] defined scope of work,

statement of assumptions and limiting

conditions, and appraiser's certification,

my (our) opinion of the market value, as

defined, of the real property that is the

subject of this report is $395,000, as of

January 27, 2006, which is the date of

inspection and the effective date of this

appraisal.

47. The fourth page of the Report contained pre-printed

boilerplate, including the following:

This report form is designed to report an

appraisal of a one-unit property or a one-

unit property with an accessory unit . . . .

* * *

SCOPE OF WORK : The scope of work for this

appraisal is defined by the complexity of

this appraisal assignment and the reporting

requirements of this appraisal report

form . . . . The appraiser must, at a

minimum: (1) perform a complete visual

inspection of the interior and exterior

areas of the subject property, (2) inspect

the neighborhood, (3) inspect each of the

comparable sales from at least the street,

(4) research, verify, and analyze data from

reliable public and/or privates sources, and

(5) report his or her analysis, opinions,

and conclusions in this appraisal report.

INTENDED USE : The intended use of this

appraisal report is for the lender/client to

evaluate the property that is the subject of

the appraisal for a mortgage finance

transaction.

INTENDED USER : The intended user of this

appraisal report is the lender/client.

* * *

STATEMENT OF ASSUMPTIONS AND LIMITING

CONDITIONS : The appraiser's certification

in this report is subject to the following

assumptions and limiting conditions:

* * *

2. The appraiser has provided a sketch in

this appraisal report to show the

approximate dimensions of the improvements.

The sketch is included only to assist the

reader in visualizing the property and

understanding the appraiser's determination

of its size.

* * *

5. The appraiser has noted in this

appraisal any adverse conditions (such as

needed repairs, deterioration, the presence

of hazardous wastes, toxic substances, etc.)

observed during the inspection of the

subject property or that he or she became

aware of during the research involved in

performing the appraisal. Unless otherwise

stated in this appraisal report, the

appraiser has no knowledge of any hidden or

unapparent physical deficiencies or adverse

conditions of the property (such as, but not

limited to, needed repairs, deterioration,

the presence of hazardous wastes, toxic

substances, adverse environmental

conditions, etc.) that would make the

property less valuable, and has assumed that

there are no such conditions and makes no

guarantees or warranties, express or

implied. The appraiser will not be

responsible for any such conditions that do

exist and for any engineering or testing

that might be required to discover whether

such conditions exist. Because the

appraiser is not an expert in the field of

environmental hazards, this appraisal report

must not be considered as an environmental

assessment of the property.

6. The appraiser has based his or her

appraisal report and valuation conclusions

for an appraisal that is subject to

satisfactory completion, repairs, or

alterations on the assumption that the

completion, repairs, or alterations of the

subject property will be performed in a

professional manner.

48. The fifth page of the Report contained additional pre-

printed boilerplate in the form of an "Appraiser's

Certification," wherein "the Appraiser [Respondent] certifie[d]

and agree[d] that," among other things:

1. I have, at a minimum, developed and

reported this appraisal in accordance with

the scope of work requirements stated in

this appraisal report.

2. I performed a complete visual inspection

of the interior and exterior areas of the

subject property. I reported the condition

of the improvements in factual, specific

terms. I identified and reported the

physical deficiencies that could affect the

livability, soundness or structural

integrity of the property.

3. I performed this appraisal in accordance

with the requirements of the Uniform

Standards of Professional Appraisal Practice

that were adopted and promulgated by the

Appraisal Standards Board of The Appraisal

Foundation and that were in place at the

time this appraisal report was prepared.

4. I developed my opinion of the market

value of the real property that is the

subject of this report based on the sales

comparison approach to value. I have

adequate comparable market data to develop a

reliable sales comparison approach for this

appraisal assignment. I further certify

that I considered the cost and income

approaches to value but did not develop

them, unless otherwise indicated in this

report.

5. I researched, verified, analyzed, and

reported on any current agreement for sale

for the subject property, any offering for

sale of the subject property in the twelve

months prior to the effective date of this

appraisal, and the prior sales of the

subject property for a minimum of three

years prior to the effective date of this

appraisal, unless otherwise indicated in

this report.

6. I researched, verified, analyzed, and

reported on the prior sales of the

comparable sales for a minimum of one year

prior to the date of sale of the comparable

sale, unless otherwise indicated in the

report.

7. I selected and used comparable sales

that are locationally, physically, and

functionally the most similar to the subject

property.

8. I have not used comparable sales that

were the result of combining a land sale

with the contract purchase price of a home

that has been built or will be built on the

land.

9. I have reported adjustments to the

comparable sales that reflect the market's

reaction to the differences between the

subject property and the comparable sales.

10. I verified, from a disinterested

source, all information in this report that

was provided by parties who have a financial

interest in the sale or financing of the

subject property.

11. I have knowledge and experience in

appraising this type of property in this

market area.

12. I am aware of, and have access to, the

necessary and appropriate public and private

data sources, such as multiple listing

services, tax assessment records, public

land records and other such data sources for

the area in which the property is located.

13. I obtained the information, estimates,

and opinions furnished by other parties and

expressed in this appraisal report from

reliable sources that I believe to be true

and correct.

14. I have taken into consideration factors

that have an impact on value with respect to

the subject neighborhood, subject property,

and the proximity of the subject property to

adverse influences in the development of my

opinion of market value. I have noted in

this appraisal report any adverse conditions

(such as, but not limited to, needed

repairs, deterioration, the presence of

hazardous wastes, toxic substances, adverse

environmental conditions, etc.) observed

during the inspection of the subject

property or that I became aware of during

research involved in performing this

appraisal. I have considered these adverse

conditions in my analysis of the property

value, and have reported on the effect of

the conditions on the value and

marketability of the subject property.

15. I have not knowingly withheld any

significant information from this appraisal

and, to the best of my knowledge, all

statements and information in this appraisal

report are true and correct.

16. I stated in this appraisal report my

own personal, unbiased, and professional

analysis, opinions, and conclusions, which

are subject only to the assumptions and

limiting conditions in this appraisal

report.

17. I have no present or prospective

interest in the property that is the subject

of this report, and I have no present or

prospective personal interest or bias with

respect to the participants in the

transaction. I did not base, either

partially or completely, my analysis and/or

opinion of market value in this appraisal

report on the race, color, religion, sex,

age, marital status, handicap, familial

status, or national origin of either the

prospective owners or occupants of the

subject property or of the present owner or

occupants of the properties in the vicinity

of the subject property or on any other

basis prohibited by law.

18. 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).

19. I personally prepared all conclusions

and opinions about the real estate that were

set forth in this appraisal report. If I

relied on significant real property

appraisal assistance from any individual or

individuals in the performance of this

appraisal or the preparation of this

appraisal report, I have named such

individual(s) and disclosed the specific

tasks performed in this appraisal report.[ 13 ]

I certify that any individual so named is

qualified to perform the tasks. I have not

authorized anyone to make a change to any

item in this appraisal report; therefore any

change made to this appraisal is

unauthorized and I will take no

responsibility for it.

20. I identified the lender/client in this

appraisal report who is the individual,

organization, or agent for the organization

that ordered and will receive this appraisal

report.

21. The lender/client may disclose or

distribute this appraisal to the borrower;

another lender at the request of the

borrower; the mortgagee or its successors

and assigns; mortgage insurers;; government

sponsored enterprises; other secondary

market participants; data collection or

reporting services; professional appraisal

organizations; any department, agency, or

instrumentality of the United States; and

any state, the District of Columbia, or

other jurisdictions; without having to

obtain the appraiser's or supervisory

appraiser's (if applicable) consent. Such

consent must be obtained before this

appraisal report may be disclosed or

distributed to any other party, including,

but not limited to, the public through

advertising, public relations, news, sales,

or other media.

22. I am aware that any disclosure or

distribution of this appraisal report by me

or the lender/client may be subject to

certain laws and regulations. Further, I am

also subject to the provisions of the

Uniform Standards of Professional Appraisal

Practice that pertain to disclosure or

distribution by me.

23. The borrower, another lender at the

request of the borrower, the mortgagee or

its successors and assigns, mortgage

insurers, government sponsored enterprises,

and other secondary market participants may

rely on this appraisal report as part of any

mortgage finance transaction that involves

any one or more of these parties.

24. If this appraisal was transmitted as an

"electronic record" containing my

"electronic signature," as those terms are

defined in applicable federal and/or state

laws (excluding audio and video recordings),

or a facsimile transmission of this

appraisal report containing a copy or

representation of my signature, the

appraisal report shall be as effective,

enforceable and valid as if a paper version

of this appraisal report were delivered

containing my original hand written

signature.

25. Any intentional or negligent

misrepresentation contained in this

appraisal report may result in civil

liability and/or criminal penalties

including, but not limited to, fine or

imprisonment or both under the provisions of

Title 18, United States Code, Section 1001,

et seq., or similar state laws.

49. Directly beneath the foregoing boilerplate was

Respondent's signature. No one else signed the Report, nor was

any individual identified in the Report as having assisted

Respondent.

50. Appended to the Report was an pre-printed "Addendum,"

which read, in pertinent part, as follows:

SCOPE OF APPRAISAL

The appraisal is based on the information

gathered by the appraiser from public

records, other identified sources,

inspection of the subject property and

neighborhood, and selection of comparable

sales within the market area. The original

source of the comparables is shown in the

Data Source section of the market grid along

with the source of confirmation, if

available. The original source is presented

first. The sources and data are considered

reliable. When conflicting information was

provided, the source deemed most reliable

has been used. Data believed to be

unbelievable was not included in this report

nor was [it] used as a basis for the value

conclusion.

The Reproduction Cost is based on published

cost indexes, such as Marshall Valuation

Service, and supplemented by the appraiser's

knowledge of the local market.

* * *

HIGHEST AND BEST USE

The Highest and Best Use of a site is that

reasonable and probable use that supports

the highest present value, as defined, as of

the effective date of the appraisal. For

improvements to represent[] the highest and

best use of a site, they must be legally

permitted, be financially feasible, be

physically possible and provide[] more

profit than any other use of the site would

generate.

SITE

The improvements on the property are legal

and conform to current zoning regulations.

In the event of a loss by fire [] all

improvements could be rebuilt without

obtaining a zoning variance.

The opinion of zoning compliance

requirements expressed in this appraisal is

based on the appraiser's inspections of the

subject property and comparison to the

appropriate zoning ordinance. This opinion

does not represent a certification which can

only be obtained from the proper

jurisdictional authority.

* * *

ROOM LISTS

The number of rooms, bedrooms, baths and

lavatories is typical of houses in this

neighborhood. Foyers, laundry rooms and all

rooms below grade are excluded from the

total room count.

* * *

CONDITION OF COMPONENTS

Any opinion expressed in this appraisal

pertaining to the condition of the appraised

property's, or comparable property's

components, is based on observation[s] made

at the time of inspection. They rely on

visual indicators as well as reasonable

expectations as to adequacy and dictated by

neighborhood standards relative to

marketability. These observations do not

constitute certification of condition,

including roof or termite problems, which

may exist. If certification is required, a

properly licensed or qualified individual

should be consulted.

COST APPROACH

The Cost Approach includes a land value

analysis and the estimated replacement cost

to construct, at current prices, a building

with utility equivalent to the building

being appraised, using modern materials,

design, layout and current construction

standards. Rates for the Cost Approach were

calculated using Marshall & Swift

Residential Cost Handbook. Physical,

functional and external inadequacies, as

measured in the market, are deducted

accordingly. The "as is" value of site

improvements (driveway, Landscaping, etc.).

represents their market contributory value

as measured by a paired sales analysis. The

Cost Approach is considered a supportive

indicator of value.

The subject[] site['s] value has been

derived from market abstractions techniques

applied to improved land sales from the

subject market area, land sales as well as

analysis of assessed value. [S]ubject[]

land['s] total value ratio is common for

properties in the subject[] market area and

does not adversely affect marketability

and/or value.

DIRECT SALES COMPARISON APPROACH

Direct Sales Comparison Approach is based on

the comparison of the subject with sales of

similar type properties. Adjustments are

made to these sales for differences with the

subject. [T]his is generally considered the

best indicator of value.

* * *

ADDITIONAL COMMENTS

LIVING AREAS:

The appraisal uses actual living area in the

market analysis for both the subject and

comparable sales properties. The living

area utilized for the sales data has been

abstracted from the Public Records/Tax Rolls

listed square foot area data and may have

been further modified by the field

appraiser's observation of the actual

improvements.

DIGITAL PHOTOGRAPHS

Digital photographs taken of the subject

property and sales comparables were not

enhanced or altered in any way, shape, or

form.

* * *

ITEMS LEFT BLANK

For the purpose of this appraisal report, an

item left blank indicates this item does not

apply to the subject property, indicates a

(No or None) response, or indicates that the

appraiser is not able to ascertain and/or is

not qualified to furnish this information.

* * *

DATE OF APPRAISAL

The date of the appraisal is the date of the

last site inspection of the subject

property.

SUBJECT'S SKETCH

All measurements of the subject's

improvements have been rounded and the

appraiser has tried to determine actual

measurements as accurately as possible.

This is not a survey and is not to be

interpreted as a survey of the subject

property.

* * *

51. The "sketch" of the Subject Property that Respondent

appended to the Report did not accurately reflect the

configuration and layout of the property, as of the effective

date of the appraisal.

52. On or about February 13, 2009, notwithstanding that

Respondent had indicated in the Report (in the "Reconciliation"

section thereof) that the appraisal was "made 'as is'" and not

"subject to completion per plans and specifications," nor

subject to any "repairs or alterations" being made, Respondent

inexplicably issued an "Appraisal Update and/or Completion

Report" (Supplemental Report) containing a "Certification of

Completion," which read as follows:

INTENDED USE : The intended use of this

certificate of completion is for the

lender/client to confirm that the

requirements or conditions stated in the

appraisal report referenced above have been

met.

INTENDED USER : The intended user of this

certification of completion is the

lender/client.

HAVE THE IMPROVEMENTS BEEN COMPLETED IN

ACCORDANCE WITH THE REQUIREMENTS AND

CONDITIONS STATED IN THE ORIGINAL APPRAISAL

REPORT ? X Yes _ No If No, describe any

impact on the opinion of market value.

The subject property has been ready per

plans and specifications.

APPRAISER'S CERTIFICATION : I certify that I

have performed a visual inspection on the

subject property to determine if the

conditions or requirements stated in the

original appraisal have been satisfied.

According to the Supplemental Report, Respondent conducted this

"visual inspection" of the Subject Property on February 13,

2006.

53. Contrary to the assertions made in the "Intended Use"

and "Appraiser's Certification" sections of the "Certification

of Completion," there were no "conditions" or "requirements"

"stated in the original appraisal [report]."

54. Any "plans and specifications" referenced in an

original or updated appraisal report must be maintained in the

appraiser's work file. Respondent's Work File contains no

"plans and specifications," nor any other indication as to what,

if any, post-Report repair or renovation work had been done on

the Subject Property at the time of the issuance of the

Supplemental Report.

CONCLUSIONS OF LAW

55. DOAH has jurisdiction over the subject matter of this

proceeding and of the parties hereto pursuant to Chapter 120,

Florida Statutes.

56. At all times material to the instant case, the Florida

Real Estate Appraisal Board (Board) has been statutorily

empowered to take disciplinary action against Florida-certified

real estate appraisers based upon any of the grounds enumerated

in Section 475.624, Florida Statutes.

57. The Board may impose one or more of the following

penalties, and no others: license revocation; license

suspension (for a period not exceeding ten years); imposition of

an administrative fine not to exceed $5,000.00 for each count or

separate offense; issuance of a reprimand; and placement of the

licensee on probation. § 475.624, Fla. Stat.

58. The Board may take such action only after the licensee

has been given reasonable written notice of the charges and an

adequate opportunity to request a proceeding pursuant to Sections

120.569 and 120.57, Florida Statutes. See § 120.60(5), Fla.

Stat.

59. An evidentiary hearing must be held if requested by

the licensee when there are disputed issues of material fact.

See Hollis v. Department of Business and Professional

Regulation , 982 So. 2d 1237, 1239 (Fla. 5th DCA 2008); and

§§ 120.569(1) and 120.57(1), Fla. Stat.

60. At the hearing, Petitioner bears the burden of proving

that the licensee engaged in the conduct, and thereby committed

the violations, alleged in the charging instrument. Clear and

convincing evidence of the licensee's guilt must be presented

for Petitioner to meet its burden of proof. See Department of

Banking and Finance, Division of Securities and Investor

Protection v. Osborne Stern and Company , 670 So. 2d 932, 935

(Fla. 1996); Fox v. Department of Health , 994 So. 2d 416, 418

(Fla. 1st DCA 2008); Walker v. Florida Department of Business

and Professional Regulation , 705 So. 2d 652, 655 (Fla. 5th DCA

be based upon a preponderance of the evidence, except in penal

or licensure disciplinary proceedings . . . .").

61. Clear and convincing evidence is an "intermediate

standard," "requir[ing] more proof than a 'preponderance of the

evidence' but less than 'beyond and to the exclusion of a

reasonable doubt.'" In re Graziano , 696 So. 2d 744, 753 (Fla.

1997). For proof to be considered "'clear and convincing' . . .

the evidence must be found to be credible; the facts to which

the witnesses testify must be distinctly remembered; the

testimony must be precise and explicit and the witnesses must be

lacking in confusion as to the facts in issue. The evidence

must be of such weight that it produces in the mind of the trier

of fact a firm belief or conviction, without hesitancy, as to

the truth of the allegations sought to be established." In re

Davey , 645 So. 2d 398, 404 (Fla. 1994)(citing with approval,

Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983));

see also In re Adoption of Baby E. A. W. , 658 So. 2d 961, 967

(Fla. 1995)("The evidence [in order to be clear and convincing]

must be sufficient to convince the trier of fact without

hesitancy."). "Although this standard of proof may be met where

the evidence is in conflict, . . . it seems to preclude evidence

that is ambiguous." Westinghouse Electric Corporation, Inc. v.

Shuler Bros., Inc. , 590 So. 2d 986, 988 (Fla. 1st DCA 1991).

62. In determining whether Petitioner has met its burden

of proof, it is necessary to evaluate its evidentiary

presentation in light of the specific allegations of wrongdoing

made in the charging instrument. Due process prohibits the

Board from taking disciplinary action against a licensee based

on conduct not specifically alleged in the charging instrument,

unless those matters have been tried by consent. See Trevisani

v. Department of Health , 908 So. 2d 1108, 1109 (Fla. 1st DCA

2005); Aldrete v. Department of Health, Board of Medicine , 879

So. 2d 1244, 1246 (Fla. 1st DCA 2004); Shore Village Property

Owners' Association, Inc. v. Department of Environmental

Protection , 824 So. 2d 208, 210 (Fla. 4th DCA 2002); and Delk v.

Department of Professional Regulation , 595 So. 2d 966, 967 (Fla.

5th DCA 1992).

63. Furthermore, "the conduct proved must legally fall

within the statute or rule claimed [in the charging instrument]

to have been violated." Delk , 595 So. 2d at 967. In deciding

whether "the statute or rule claimed [in the charging

instrument] to have been violated" was in fact violated, as

alleged by Petitioner, if there is any reasonable doubt, that

doubt must be resolved in favor of the licensee. See Djokic v.

Department of Business and Professional Regulation, Division of

Real Estate , 875 So. 2d 693, 695 (Fla. 4th DCA 2004); Elmariah

v. Department of Professional Regulation, Board of Medicine , 574

So. 2d 164, 165 (Fla. 1st DCA 1990); and Lester v. Department of

Professional and Occupational Regulations , 348 So. 2d 923, 925

(Fla. 1st DCA 1977).

64. In those cases where the proof is sufficient to

establish that the licensee committed the violation(s) alleged

in the charging instrument and that therefore disciplinary

action is warranted, it is necessary, in determining what

disciplinary action should be taken against the licensee, to

consult the Board's "disciplinary guidelines," as they existed

at the time of the violation(s). See Parrot Heads, Inc. v.

Department of Business and Professional Regulation , 741 So. 2d

1231, 1233 (Fla. 5th DCA 1999)("An administrative agency is

bound by its own rules . . . creat[ing] guidelines for

disciplinary penalties."); and Orasan v. Agency for Health Care

Administration, Board of Medicine , 668 So. 2d 1062, 1063 (Fla.

1st DCA 1996)("[T]he case was properly decided under the

disciplinary guidelines in effect at the time of the alleged

violations."); see also State v. Jenkins , 469 So. 2d 733, 734

(Fla. 1985)("[A]gency rules and regulations, duly promulgated

under the authority of law, have the effect of law."); Buffa v.

Singletary , 652 So. 2d 885, 886 (Fla. 1st DCA 1995)("An agency

must comply with its own rules."); and Williams v. Department of

Transportation , 531 So. 2d 994, 996 (Fla. 1st DCA 1988)(agency

is required to comply with its disciplinary guidelines in taking

disciplinary action against its employees).

65. At all times material to the instant case, the Board's

"disciplinary guidelines" have been set forth in Florida

Administrative Code Rule 61J1-8.002. The version of Florida

Administrative Code Rule 61J1-8.002 in effect at the time of the

violations alleged in the Administrative Complaint provided, in

pertinent part, as follows:

(1) Pursuant to Section 455.2273, F.S., the

Florida Real Estate Appraisal Board sets

forth below a range of disciplinary

guidelines from which disciplinary penalties

will be imposed upon licensees guilty of

violating Chapter 455 or Part II, Chapter

475, F.S. (For purposes of this rule, the

term licensee shall refer to registrants,

license holders or certificate holders.)

The purpose of the disciplinary guidelines

is to give notice to licensees of the range

of penalties which normally will be imposed

for each count during a formal or an

informal hearing. For purposes of this

rule, the order of penalties, ranging from

lowest to highest, is: reprimand, fine,

probation, suspension, and revocation or

denial. Pursuant to Section 475.624, F.S.,

combinations of these penalties are

permissible by law. . . .

(2) As provided in Section 475.624, F.S.,

the Florida Real Estate Appraisal Board may,

in addition to other disciplinary penalties,

place a licensee on probation. The

placement of the licensee on probation shall

be for such a period of time and subject to

such conditions as the Board may specify.

Standard probationary conditions may

include, but are not limited to, requiring

the licensee: to attend pre-licensure

courses; to satisfactorily complete a pre-

licensure course; to attend and

satisfactorily complete continuing education

courses; to submit to reexamination through

the state-administered examination, which

must be successfully completed; to be

subject to periodic inspections and

interviews by an investigator of the

Department of Business and Professional

Regulation.

* * *

(3) The penalties are as listed unless

aggravating or mitigating circumstances

apply pursuant to subsection (4):

* * *

(g) Section 475.624(4), F.S. Violated any

of the provisions of this section or any

lawful order or rule issued under the

provisions of this section or Chapter 455,

F.S.- The usual action of the Board shall

be to impose a penalty up to revocation and

an administrative fine up to $5,000.

* * *

(q) Section 475.624(14), F.S. 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- The usual

action of the Board shall be to impose a

penalty from a 5 year suspension to

revocation and an administrative fine of

$1000.

(r) Section 475.624(15), F.S. Has failed

or refused to exercise reasonable diligence

in developing or preparing an appraisal

report- The usual action of the Board shall

be to impose a penalty from a 5 year

suspension to revocation and an

administrative fine of $1000.

* * *

(4)(a) When either the petitioner or

respondent is able to demonstrate

aggravating or mitigating circumstances to

the Board by clear and convincing evidence,

the Board shall be entitled to deviate from

the above guidelines in imposing discipline

upon a licensee. . . .

(b) Aggravating or mitigating circumstances

may include, but are not limited to, the

following:

1. The degree of harm to the consumer or

public.

2. The number of counts in the

administrative complaint.

3. The disciplinary history of the

licensee.

4. The status of the licensee at the time

the offense was committed.

5. The degree of financial hardship

incurred by a licensee as a result of the

imposition of a fine or suspension of the

license.

6. Violation of the provision of Part II of

Chapter 475, F.S., wherein a letter of

guidance as provided in Section 455.225(3),

F.S., previously has been issued to the

licensee.

66. The Administrative Complaint issued in the instant

case alleges that, in connection with the development and

communication of his appraisal of the Subject Property,

Respondent violated: Standards Rule 1-1(a), (b), and (c) of the

Uniform Standards of Professional Appraisal Practice (2005) and

therefore also Section 475.624(14), Florida Statutes (2005)

(Count I); Standards Rule 2-1(a) of the Uniform Standards of

Professional Appraisal Practice (2005) and therefore also

Section 475.624(14), Florida Statutes (2005) (Count II);

Standards Rule 2-2(b)(ix) of the Uniform Standards of

Professional Appraisal Practice (2005) and therefore also

Section 475.624(14), Florida Statutes (2005) (Count III);

Section 475.629, Florida Statutes (2005) and therefore also

Section 475.624(4), Florida Statutes (Count IV); and Section

475.624(15), Florida Statutes (2005) (Count V).

67. At all times material to the instant case, Section

475.624(14), Florida Statutes, has authorized the Board to take

disciplinary action against a Florida-certified residential real

estate appraiser who "[h]as violated any standard for the

development or communication of a real estate appraisal or other

provision of the Uniform Standards of Professional Appraisal

Practice."

68. Standards Rules 1-1(a), (b), and (c), 2-1(a), and 2-

2(b)(ix) of the 2005 version of the Uniform Standards of

Professional Appraisal Practice (USPAP 2005), which was in

effect at the time of the violations alleged in Counts I through

III of the Administrative Complaint in the instant case, 14

provided as follows:

STANDARD 1: REAL PROPERTY APPRAISAL,

DEVELOPMENT

In developing a real property appraisal, an

appraiser must identify the problem to be

solved and the scope of work necessary to

solve the problem, and correctly complete

research and analysis necessary to produce a

credible appraisal.

Standards Rule 1-1 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

(a) be aware of, understand, and correctly

employ those recognized methods and

techniques that are necessary to produce a

credible appraisal;[ 15 ]

(b) not commit a substantial error of

omission or commission that significantly

affects an appraisal;[ 16 ] and

(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.[ 17 ]

* * *

STANDARD 2: REAL PROPERTY APPRAISAL,

REPORTING

In reporting the results of a real property

appraisal, an appraiser must communicate

each analysis, opinion, and conclusion in a

manner that is not misleading.

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

* * *

Standards Rule 2-2 (This Standards Rule

contains binding requirements from which

departure is not permitted.)

Each written real property appraisal report

must be prepared under one of the following

three options and prominently state which

option is used: Self-Contained Appraisal

Report, Summary Appraisal Report, and

Restricted Use Appraisal Report.

* * *

(b) The content of a Summary Appraisal

Report must be consistent with the intended

use of the appraisal and, at a minimum:

* * *

(ix) summarize the information analyzed,

the appraisal procedures followed, and the

reasoning that supports the analyses,

opinions, and conclusions.[ 18 ]

69. At all times material to the instant case, Section

475.624(4), Florida Statutes, has authorized the Board to take

disciplinary action against a Florida-certified residential real

estate appraiser who "[h]as violated any of the provisions of

[Part II of Chapter 475, Florida Statutes]," including the

following provision found in Section 475.629, Florida Statutes:

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.

70. At all times material to the instant case, Section

475.624(15), Florida Statutes, has authorized the Board to take

disciplinary action against a Florida-certified residential real

estate appraiser who "[h]as failed or refused to exercise

reasonable diligence in developing an appraisal or preparing an

appraisal report."

71. "There is no statute, rule, or USPAP standard that

defines 'reasonable diligence.'" Department of Business and

Professional Regulation, Division of Real Estate v. Guilfoyle ,

No. 07-0683PL, 2007 Fla. Div. Adm. Hear. LEXIS 469 *13 (Fla.

DOAH August 22, 2007)(Recommended Order). It was therefore

incumbent upon Petitioner, in order to meet its burden of

proving that Respondent deviated from the required standard of

diligence in violation of Section 475.624(15), Florida Statutes,

to present "competent evidence . . . from a person with

sufficient insight into what constitutes reasonable diligence on

the part of a certified real estate appraiser when developing an

appraisal or in preparing an appraisal report" under the

circumstances that Respondent faced in the instant case.

Department of Business and Professional Regulation, Division of

Real Estate v. Harrison , No. 06-3387PL, 2007 Fla. Div. Adm.

Hear. LEXIS 315 *24-25 (Fla. DOAH May 30, 2007)(Recommended

Order); Department of Business and Professional Regulation,

Division of Real Estate v. Catchpole , No. 06-3389PL, 2007 Fla.

Div. Adm. Hear. LEXIS 316 *22-23 (Fla. DOAH May 30,

2007)(Recommended Order); and Department of Business and

Professional Regulation, Division of Real Estate v. Price , No.

06-3720PL, 2007 Fla. Div. Adm. Hear. LEXIS 249 *26-27 (Fla. DOAH

May 3, 2007)(Recommended Order); see also McDonald v. Department

of Professional Regulation , 582 So. 2d 660, 670 (Fla. 1st DCA

1991)(Zehmer, J., specially concurring)("[W]here the agency

charges negligent violation of general standards of professional

conduct, i.e., the negligent failure to exercise the degree of

care reasonably expected of a professional, the agency must

present expert testimony that proves the required professional

conduct as well as the deviation therefrom."); and Purvis v.

Department of Professional Regulation, Board of Veterinary

Medicine , 461 So. 2d 134, 136 (Fla. 1st DCA 1984)("Section

474.214(1)(q), Florida Statutes, sets forth 'negligence,

incompetency or misconduct, in the practice of veterinary

medicine' as a ground for disciplinary action. The parties to

this appeal have treated 'negligence' and 'incompetency' as

meaning a failure to comply with the minimum standard of care or

treatment required of a veterinarian under the circumstances.

We accept that construction of this penal statute. Unlike a

charge of violating a statute or rule under section

474.214(1)(g), which requires no proof of a standard of care,

the charge against Dr. Purvis necessarily required evidentiary

proof of some standard of professional conduct as well as

deviation therefrom. . . . [T]he Board never introduced any

evidence at the administrative hearing to show the appropriate

standard of care which it contends Dr. Purvis failed to meet.

The Board introduced no expert testimony, no statute, no rule,

nor any other type of evidence to establish the appropriate

standard of care or that Dr. Purvis fell below that standard.").

Petitioner presented such evidence in the instant case through

the unrebutted expert testimony of Mr. Spool, which the

undersigned has accepted.

72. With respect to each of the five counts of the Amended

Administrative Complaint, Petitioner met its burden of proof.

73. Through its evidentiary presentation, it clearly and

convincingly established that, in connection with the

development and communication of his appraisal of the Subject

Property, Respondent violated the USPAP 2005 and statutory

provisions cited in Counts I through V of the Amended

Administrative Complaint by committing the following acts and

omissions (which were described in the "Essential Allegations of

Material Fact" set forth in the Amended Administrative

Complaint): treating the Subject Property for purposes of the

appraisal, and identifying it in the Report, as a legal single-

family residence, when it actually was, on the effective date of

the appraisal, an "illegally subdivided," multi-unit residential

property that was in violation of the City of Miami zoning code;

including an inaccurate sketch of the Subject Property in the

Report; using Comparable Sale 1 as a "comparable" in his sales

comparison analysis, despite its being 753 square feet smaller

than the 2,249 square foot Subject Property; in determining an

"Adjusted Sale Price" for Comparable Sale 3, relying on the

"Total Area" square footage (2,000) reported in the MLX listing

for the property, instead of the "Gross Living Area" square

footage (1,512) reported in ICS NET/FARES; not taking into

account that the "remarks" section of the MLX listing for

Comparable Sale 3 indicated that Comparable Sale 3, contrary to

the representation he made in the Report, was not a one unit

residential property, but rather consisted of three separate

dwelling units; failing to obtain and analyze, as part of the

appraisal process, a complete copy of the sales contract between

Mr. Vazquez and Mr. Ceballos that was signed and dated ; not

employing an appropriate method of verifying sales price

information for Comparable Sales 1, 2, and 3; failing to provide

in his Report or Work File: any support or explanation for

making a $25 per square foot upward adjustment in calculating

the "Adjusted Sales Price[s] of Comparables," using a

"replacement cost new" figure of $90 a square foot in developing

his "Cost Approach" estimate of the market value of the Subject

Property, and not making any adjustments in his sales comparison

analysis to account for the provision in the sales contract

between Mr. Vazquez and Mr. Ceballos that the "seller will pay

4% of purchase price for buyer closing costs"; stating in the

Report that the Subject Property was in "average" condition and

appraising it accordingly, notwithstanding that its roof, as

Respondent noted in the Report, "had many missing and/or

detached roof shingles"; stating in the Report that the

appraisal was "made 'as is'" and not "subject to completion per

plans and specifications," nor subject to any "repairs or

alterations," but then subsequently issuing a Supplemental

Report in which he indicated otherwise; and not retaining in his

Work File the "plans and specifications" referenced in the

Supplemental Report, nor any other documentation concerning

post-Report repair or renovation work on the Subject Property.

74. In its Proposed Recommended Order, Petitioner has

proposed that the undersigned recommend to the Board that it

revoke Respondent's residential real estate appraiser license

for his having committed the violations alleged in Counts I

through V of the Amended Administrative Complaint. Having

carefully considered the facts of the instant case in light of

the "disciplinary guidelines" set forth in the version of

Florida Administrative Code Rule 61J1-8.002 in effect at the

time of the commission of these violations, the undersigned

agrees that, given what the violations collectively reflect

concerning Respondent's ability to competently make residential

real estate appraisals with safety to clients and the general

public and in accordance with required professional standards,

the revocation of Respondent's license is the appropriate

disciplinary action for the Board to take in the instant case.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Board issue a Final Order finding

Respondent guilty of the violations alleged in Counts I through

V of the Amended Administrative Complaint and revoking his

residential real estate appraiser license.

DONE AND ENTERED this 2nd day of November, 2009, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of November, 2009.

ENDNOTES

1 Unless otherwise noted, all references in this Recommended

Order to Florida Statutes are to Florida Statutes (2009).

2 The hearing was originally scheduled for August 4, 2009, but

was continued at Petitioner's request.

3 "[C]aselaw indicates that a fact-finder should not arbitrarily

reject unrebutted testimony." The Florida Bar v. Clement , 662

So. 2d 690, 696 (Fla. 1995); see also Wiederhold v. Wiederhold ,

696 So. 2d 923, 924 (Fla. 4th DCA 1997)("[W]hile the trial court

can reject unrebutted expert testimony, it must offer a

reasonable explanation for doing so. In other words, the trial

court as fact-finder cannot arbitrarily reject unrebutted expert

testimony.")(citation omitted); and Long v. Moore , 626 So. 2d

1387, 1389 (Fla. 1st DCA 1993)("The trial court should accept

unrebutted expert testimony on highly technical matters, unless

it is so palpably incredible, illogical and unreasonable as to

be unworthy of belief or otherwise open to doubt from some

reasonable point of view.").

4 Mr. Potestad is now himself a Florida-certified residential

real estate appraiser.

5 While none of Petitioner's witnesses, including Ms. Lugo, was

able to give eyewitness testimony as to the state and condition

of the Subject Property on January 27, 2006, the evidentiary

record nonetheless clearly and convincingly establishes

(contrary to Respondent's and Mr. Potestad's testimony on the

matter, which the undersigned has rejected as unworthy of

belief) that the Subject Property was a multi-unit structure,

not a single-family residence, on that date. The evidence

supporting this finding includes Ms. Lugo's testimony as to the

observations she made during her January 5, 2006, and post-

January 27, 2006, follow-up visits to the Subject Property; her

testimony as to what needed to be done to convert the multi-unit

structure she saw on January 5, 2006, to a legal, single-family

residence; her testimony as to there having been no building

permit for work on the Subject Property issued between January

5, 2006, and her next visit to the property on or about June 6,

2006; and the hearsay statements of Mr. Ceballos concerning what

existed on the Subject Property at the time of his purchase in

February 2006 (which supplemented Ms. Lugo's testimony). See

Dieguez v. Department of Law Enforcement, Criminal Justice

Standards and Training Commission , 947 So. 2d 591, 596 (Fla. 3d

DCA 2007)("The victim's hearsay statements were properly

considered by the Administrative Law Judge to supplement and

explain the documents. Based on this, the Administrative Law

Judge could reasonably find (as she did) that the case had been

proven by clear and convincing evidence."); and

§ 120.57(1)(c), Fla. Stat. ("Hearsay evidence may be used for

the purpose of supplementing or explaining other evidence [in

administrative proceedings], but it shall not be sufficient in

itself to support a finding unless it would be admissible over

objection in civil actions.").

6 ISC NET is also known as "FARES" (which is an acronym for

First American Real Estate Solutions).

7 As Ms. Lugo credibly testified, the "neighborhood" actually

had numerous former single-family residences (including the

Subject Property) that had been illegally subdivided and

converted into multi-unit structures.

8 It is unclear how a shingle roof having "many missing and/or

detached roof shingles" could be said to be "Avg.," which (as

noted above) is how, in an earlier part of the "Improvements"

section of the Report, Respondent described the condition of the

Subject Property's roof.

9 A property with outstanding code violations, as the Subject

Property had, does not "generally conform to the neighborhood."

10 This figure is inaccurate: $395,000 (the reported "Sale

Price" of the Subject Property) ÷ 2,249 square feet (the

reported "Gross Living Area" of the Subject Property) = $175.63

per square foot.

11 MLX is an online multiple listing service.

12 It is difficult to imagine how Respondent could have

conducted, with reasonable diligence, "a complete visual

inspection of the interior and exterior areas of the [S]ubject

[P]roperty" and not have observed that the Subject Property was

an illegally subdivided multi-unit property, rather than (as he

represented in the Report) a legal single-family residence.

13 No such individuals were named in the Report.

14 The parties agree that USPAP 2005 provides the standards

against which Respondent's conduct should be measured in the

instant case.

15 The "comment" to Standards Rule 1-1(a) read as follows:

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.

16 The "comment" to Standards Rule 1-1(b) read as follows:

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.

17 The "comment" to Standards Rule 1-1(c) read as follows:

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.

18 The "comment" to Standards Rule 2-2(b)(ix) read as follows:

The appraiser must be certain that the

information provided is sufficient for the

client and intended users to adequately

understand the rationale for the opinions

and conclusions, including reconciliation of

the data and approaches, in accordance with

Standards Rule 1-6.

COPIES FURNISHED :

Donna C. Lindamood, Esquire

Senior Attorney

Department of Business and

Professional Regulation

400 West Robinson Street, N#802

Orlando, Florida 32801-1900

Steven W. Johnson, Esquire

20 North Orange Avenue, Suite 700

Orlando, Florida 32801

Thomas W. O'Bryant, Jr., Director

Division of Real Estate

Department of Business and

Professional Regulation

400 West Robinson Street

Suite 802 North

Orlando, Florida 32801

Reginald Dixon, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

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.