Georgia Real Estate Commission Fiscal Year 2012 Annual Report GEORGIA REAL ESTATE COMMISSION GEORGIA REAL ESTATE APPRAISERS BOARD FISCAL YEAR 2012 ANNUAL REPORT TABLE OF CONTENTS Agency Investigative Statistics by Fiscal Year................................................................................................... 1 Agency Disciplinary Actions Imposed by Fiscal Year....................................................................................... 1 Fines and Disciplinary Costs Reimbursements Collected .................................................................................. 2 Agency Investigations Completed by Fiscal Year and Type.............................................................................. 2 Real Estate Licensees by Fiscal Year and License Type .................................................................................... 3 Real Estate License Renewals ............................................................................................................................ 3 New Resident Real Estate Licenses Issued......................................................................................................... 4 New Non-Resident Real Estate Licenses Issued ................................................................................................ 4 Real Estate Licensee Population by Fiscal Year................................................................................................. 5 Agency's Separate Budget Unit Status ............................................................................................................... 6 Report of Revenue and Disbursements for Amended FY 2012 ......................................................................... 7 Education, Research and Recovery Fund ........................................................................................................... 8 Recent Recovery Fund Contracts........................................................................................................................ 9 Organizational Chart ......................................................................................................................................... 10 Strategic Plan .................................................................................................................................................... 11 Results Based Budget Measures ....................................................................................................................... 12 Appraisers by Fiscal Year and Classification ................................................................................................... 14 Appraiser Disciplinary Actions Imposed by Fiscal Year ................................................................................. 14 Agency Investigative Statistics by Fiscal Year (Includes Real Estate Commission and Appraisers Board Cases) In addition to written complaints, the Commission's staff processes a number of informal complaints daily, including grievances, and inquiries received from telephone or walk-in customers. The staff resolves most of these informal matters rapidly to the satisfaction of the public. Many complaints involve contract disputes and require legal assistance. The staff recommends that the complaining party seek legal counsel or consider pursuing the matter in court for appropriate action. Agency Disciplinary Actions Imposed by Fiscal Year (Includes Real Estate Commission and Appraisers Board Cases) Page 1 of 14 Disciplinary Actions include Citations (generally for less serious violations - 228 in FY2012) or Sanctions (for more serious violations - 187 in FY2012). The Commission also has an option to send "letters of findings" to licensees when an investigation reveals only technical license law violations that involve no harm to the public. The Commission makes extensive use of consent decrees to resolve contested cases. Where there is little dispute regarding the facts in a case and the parties agree on the sanction to be imposed, the Commission uses the consent decree to save parties the time and the expense of a full, formal hearing before an Administrative Law Judge. Most cases are resolved without a formal hearing. Fines and Disciplinary Costs Reimbursements Collected GEORGIA REAL ESTATE COMMISSION & APPRAISERS BOARD FINES DISCIPLINARY COSTS REIMBURSEMENTS GREC $24,400 $116,500 GREAB $11,600 $91,550 AGENCY $36,000 $208,050 Agency Investigations Completed by Fiscal Year and Type (Includes Real Estate Commission and Appraisers Board Cases) Page 2 of 14 Real Estate Licensees by Fiscal Year and License Type Real Estate License Renewals Page 3 of 14 New Resident Real Estate Licenses Issued New Non-Resident Real Estate Licenses Issued Page 4 of 14 Page 5 of 14 Agency's Separate Budget Unit Status A 1977 court ruling and subsequently adopted state statutes require that the Commission's budget for direct and indirect costs approximately equal its revenue collections. Revenue collections are fees paid by licensees for both original and renewals of licenses. Direct costs include expenses for which the Commission directly pays; for example, salaries, rent, computer charges, administrative law courts and specially assigned Attorney General's (SAAG's) for legal work on disciplinary cases. Indirect costs include the Office of the Georgia Attorney General for additional legal work and the Georgia Secretary of State for Human Resources services. The Governor's Office of Planning and Budget (OPB) and the Legislative Budget Office (LBO) have instructed the Commission to base its proposed budget so that the State's appropriation to it equals approximately 85% of its income. The 15% difference retained by the State pays the indirect costs. If the Commission's fee income significantly exceeds the State's appropriations to it, it must reduce fees charged to licensees. Conversely, if fee income falls significantly below the State's appropriations to it, the Commission must increase fees to licensees. In 1990, the State of Georgia created the Georgia Real Estate Appraisers Board (GREAB). The Commission performs similar services for appraisers as it does for the real estate licensees. It regulates, educates and disciplines appraisers in the same manner as real estate licensees. The budget for the Commission includes the fee income and cost of the GREAB. From the years 2000 through 2008 the fee income from real estate and appraiser licensees significantly exceeded the Agency's expenditures. This was due to a significant increase in new licensees. However, the licensee population started declining in 2008 and is continuing to do so. In addition to the amounts appropriated by the State each year to the Commission, the Commission is allowed by law to retain revenue collected from disciplined licensees to reimburse the Commission for its administrative, investigative, legal costs and expenses ("Retained Revenue"). Page 6 of 14 Report of Revenue Collected, Amount Allocated for Expenditures and Disbursements for Amended FY 2012 for the GREC Revenue $2,752,189 Revenue from Real Estate Licensees (New & Renewals) (-$ 73,520) Paid into Recovery Fund from New Real Estate Licensees $ 521,450 Revenue from Appraiser Classifications and AMC's (New & Renewals) $ 279,025 Retained Revenues $ 36,000 Fines Generated from Disciplinary Actions $3,515,144 Total Revenue generated by the GREC ________________________________________________________________________ Disbursements (Note: Disbursements by the Commission are limited by law to appropriated funds from the State Legislature plus Retained Revenues) $2,903,777 Amended FY 2012 State Appropriation $ 279,025 Retained Revenues $3,182,802 Total Amount Limited by law for spending by the GREC -$3,134,051 Total spent by the GREC $ 48,751 Unspent Funds from Appropriated Funds and Retained Revenue Note: $21,740.46 Paid into State Treasury $27,009.92 Carried forward to FY2013 for benefit of GREC _______________________________________________________________________ $3,515,144 Total Revenue generated by the GREC -$3,134,051 Total spent by the GREC $ 381,093 Excess Revenue paid to the State Treasury from Real Estate and Appraiser Licensees -$ 262,850 Estimated Cost for HR services provided by the SOS & for legal services provided by the AG (AG - $177,850) (SOS - $85,000) $ 118,243 Estimated Excess Revenue paid to the State By Real Estate and Appraiser Licensees $ 21,740.46 Unspent State Funds $ 139,983.46 Total Estimated Revenue paid to the State Treasury Page 7 of 14 Education, Research and Recovery Fund ("Recovery Fund") The Recovery Fund is funded from a one-time $20.00 fee for each original real estate license issued and any interest earned. The Recovery Fund is used to reimburse non-licensees who have been harmed by a licensee but cannot recover from the licensee after obtaining a judgment against the licensee through the courts. The fund is also used to underwrite the cost of developing real estate courses, conducting real estate seminars, conducting real estate research projects, publishing and distributing real estate educational material, and for education research programs for the benefit of real estate licensees and the public. The Commission is required by law to keep a minimum balance of $1,000,000.00 in the Recovery Fund. At the end of FY 2012, the Recovery Fund balance was $1,748,975. Fiscal Year 1974-2005 2006 2007 2008 2009 2010 2011 2012 Income Disbursements Judgments Paid & Collection Costs Education & Research Contracts Licensee Payments Interest Earned Number of Judgments Amount Number of Contracts Awarded Amount $3,829,379 $329,060 $326,550 $181,460 $95,200 $96,238 $74,940 $73,520 $2,290,125 $63,430 $128,801 $83,668 $29,720 $6,498 $3,916 $3,205 132 $796,101 1 $5,155 0 $32 0 $0 0 $0 0 $0 0 $0 0 $0 207 $3,001,207 10 $218,620 7 $406,033 4 $212,204 10 $348,900 10 $324,491 10 $325,617 11 $357,411 Balance $2,322,196 $2,490,911 $2,540,197 $2,593,121 $2,493,271 $2,276,422 $2,029,661 $1,748,975 Page 8 of 14 Brokerage $6,000/yr Trust Account $6,000/yr Common Violations $31,200/yr Common Violations $64,000/yr Brokerage & Trust Accounts $62,000/yr Online CE Recent Recovery Fund Contracts Scholarship $30,000/yr School Meeting $36,000/yr Classroom CE Paper Newsletter $ 65,000/yr Publications Training Online Knowledgebase $101,000 (3yrs) Instructor Training Workshops $21,500/yr Electronic Newsletter $10,000/yr Page 9 of 14 Organizational Chart GEORGIA REAL ESTATE COMMISSION (Five Licensees & One Public Member Appointed by Governor) Chair Bill Bonner, Fayette County Vice-Chair Paul G. Brower, Marietta Members David J. Burge, Atlanta Clayton Foster, Flowery Branch Scott Free, Perry Gwen Fulcher Young, Augusta GEORGIA REAL ESTATE APPRAISERS BOARD (Four Appraisers & One Public Member Appointed by Governor) Chair Charles B. Bramlett, Monticello Vice-Chair Sandra McAlister Winter, Alpharetta Members William R. Coleman, Jr., McDuffie County D. Scott Murphy, Suwanee Marilyn Watts, Fayetteville REAL ESTATE COMMISSIONER (Appointed by Commission) Administration - Two Positions Information Systems Information Services Education and Training Investigations Three Positions Six Positions One Position Seventeen Positions Permanent Employees and Their Years of Service as of June 30, 2012 William L Rogers Jr., Real Estate Commissioner (Sworn in on 01/18/2011) Craig Coffee, Deputy Real Estate Commissioner (11) Frank Ambio (6), Information Services Manager Jeff Angel (14), Systems Programmer 2 Audrey Brown (17), Investigations Area Supervisor Bess Buckley (16), Investigative Specialist Vivian L. Chang (11), Investigator II Marshell Clark (6), Investigator Deborah Dupree (26), Administrative Clerk Charlotte Durant (15), Education Advisor Delories Gibson (24), Compliance Manager Alan Gloer (28), Investigations Area Supervisor Tia Griffin-Barnes (5), Investigative Assistant Teresa Holder (15), Director of Information Systems Felicia Hubbard (19), Senior Information Specialist Letitia Jackson (2), Information Specialist Chuck Jonaitis (2), Investigator Jennifer Jones (7), Administrative Clerk Diane M. Keys (11), Investigator Josephine Lee (6), Administrative Operations Coordinator Shin Shin Liu (11), Network Specialist Oil Mata (7), Investigator Shonda Mason (13), Investigator Joanne Newton (7) Investigative Specialist Rosa Scott (16), Investigative Specialist Wanda J. Sorrells (32), Investigations Area Supervisor Margaret Snow (5), Investigator Kimberley Wimby (12), Information Specialist Page 10 of 14 Strategic Plan The Agency's Mission The mission of the Georgia Real Estate Commission and the Georgia Real Estate Appraisers Board is to ensure professional competency among real estate licensees and appraisers and to promote a fair and honest market environment for practitioners and their customers and clients in real estate transactions in Georgia. The Agency's Vision Those who use the services of Georgia real estate brokers and appraisers in real estate transactions will encounter responsive, knowledgeable, and ethical professionals. Core Values To protect the public in maintaining a fair and honest market for real estate transactions in Georgia. Agency Strategic Plan - Goals and Strategies Report Goal Strategy Description Measurable Objective Assure that Real Estate Licensees and Appraisers Meet Standards of Minimum Competence and Adhere to Regulatory Requirements in the Conduct of Business Conduct a Compliance Audit of Georgia Real Estate Schools Insure that Individuals are Being Properly Educated and Are Prepared to Pass the State Licensing Exam Georgia's Passing Rate on the Qualifying Examination will be Within 5 Points of Other States Giving the Same Examination Timely Resolve Complaints About Real Estate Brokerage and Appraisal Activity Under the License Law and the Appraisal Act, and Assure Due Process Rights Under Those Laws to Real Estate Licensees, Appraisers, and Members of the Public Reduction of Time to Investigate a Case File Implement Increased Use of Citations as a Disciplinary Tool to Reduce the Length of Time Necessary to Resolve an Investigative Case Reduce Amount of Time Between Opening a Case for Investigation and Closing the Case From One Year to Six Months Develop Solutions to Minimize or Eliminate Problems that Real Estate Licensees, Appraisers, and Members of the Public Encounter in Complying with the License Law and the Appraisal Act Online Courses Develop Series of Online Courses for Licensees to Take to Increase Their Awareness of the License Law Implement Series of Online Educational Courses to Assist Licensees in Adhering to the Real Estate License Law Maintain Effective Communication Between the Agency and Real Estate Licensees, Appraisers, and Consumers of Their Services Electronic and Paper Newsletters Produce 12 Electronic and 2 Paper Newsletters Produce 12 Electronic and 2 Paper Newsletters Enhance the Efficient and Cost Effective Operation of the Agency Increased Use of Computer Applications as Opposed to Traditional Paper Applications Continue to Develop Web Based Applications for Use by Licensees Increase in Use of Online Computer Applications Page 11 of 14 Results Based Budget Measures SECTION 1: PROGRAM RESULTS AND MEASURES 1.1. Agency Name: Georgia Real Estate Commission Georgia Real Estate Appraisers Board 1.2. Program Name: Regulation, through licensing of practitioners, of real estate licensees and real estate appraisers. 1.3. Program Purpose: To protect the public and other licensees by regulating real estate licensees and real estate appraisers. SECTION 2: PROGRAM GOALS DESIRED RESULTS AND RESULTS MEASURES 2.1 Goal 1: Real estate licensees and real estate appraisers will be qualified and provide competent service. 2.2 Desired Result 1.a: Conducting investigations of the activities of licensees helps ensure that practitioners are qualified and competent Actual Results 1.a Number of Agency Investigations Completed in a Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 2,668 2,128 2,181 2,151 2,053 . Page 12 of 14 Desired Result 1.b: Georgia's passing rates on the qualifying examinations to be within 5 points of the average passing rates of other states giving the same examinations; thereby ensuring that persons successfully passing them are minimally qualified. FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 4.5% above 7.6% above 7.3% above 8.0% above 6.0% above Goal 2: Staff will respond to all applicants, licensees, and the public's requests for information within agency guidelines. Actual Results 2 Service Provided FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 95% of requests for applications and materials will be filled within one business day. 99% 99% 99% 98% 96% 95% of requests for written responses to questions will be responded to within 2 business days. 99% 99% 98% 97% 97% 95% of all completed applications will be processed within 5 business days of receipt. 96% 97% 98% 98% 96% Page 13 of 14 Georgia Real Estate Appraisers Board Appraisers by Fiscal Year and Classification GREAB Disciplinary Actions Imposed by Fiscal Year Page 14 of 14