Annual report fiscal year 2014

Georgia
Real Estate
Commission
Fiscal Year 2014
Annual Report

GEORGIA REAL ESTATE COMMISSION
Suite 1000 International Tower 229 Peachtree Street, N.E. Atlanta, Georgia 30303-1605 404-656-3916 Voice 404-656-6650 Fax Internet www.grec.state.ga.us Email wrogers@grec.state.ga.us
MEMBERS
PAUL G. BROWER Chair
SCOTT FREE Vice Chair
JOSH BONNER DAVID J. BURGE CLAYTON FOSTER JERRY WARSHAW
STAFF
WILLIAM L. ROGERS, JR. Real Estate Commissioner
CRAIG COFFEE Deputy Real Estate Commissioner

January 12, 2015
The Honorable Nathan Deal Governor, State of Georgia Georgia State Capitol Atlanta, Georgia 30334
Dear Governor Deal,
Pursuant to the Official Code of Georgia Annotated 43-40-2 (g), I submit the Annual Report of the Georgia Real Estate Commission, ("the Commission," or the "Agency") for the fiscal year July 1, 2013, through June 30, 2014 ("FY 2014"). This report includes: (1) a summary of actions taken by the Commission; (2) a financial report of Income and Disbursements; (3) staff personnel; (4) the number of persons licensed by the Commission; and (5) steps taken in education and research to disseminate information so all licensees can be better informed to protect the public.
Since the Commission also provides administrative support for the Georgia Real Estate Appraisers Board (GREAB), I have included separate information concerning it though the budgets are combined.
FY 2014 ended with a real estate licensee population of 82,483. This is a decrease of 1,182 licensees from FY 2013. FY 2014 ended with an appraiser population of 4,645. This is a decrease of 88 licensees from FY 2013. The licensee population declined slightly in FY14 as the number of individuals becoming licensed increased and this offset the number of individuals choosing not to renew a license.
By law, no general State tax revenues may be used to support our Agency's operations. All funding comes from fees paid by licensees. Despite a decrease in the licensee population in FY 2014, the Agency returned approximately $487,834.00 surplus to the state.
Sincerely,

Paul G. Brower Chair

GEORGIA REAL ESTATE COMMISSION
GEORGIA REAL ESTATE APPRAISERS BOARD
FISCAL YEAR 2014 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 ................................................................................................................. 3 Real Estate License Renewals by Fiscal Year .................................................................................................... 3 New Resident Real Estate Licenses Issued by Fiscal Year ................................................................................ 4 New Non-Resident Real Estate Licenses Issued by Fiscal Year ........................................................................ 4 Agency's Separate Budget Unit Status ............................................................................................................... 5 Report of Revenue Collected and Amounts Expended During Fiscal Year 2014 .............................................. 6 Education, Research and Recovery Fund ........................................................................................................... 7 Recovery Fund Contracts.................................................................................................................................... 8 Organizational Chart .......................................................................................................................................... 9 Strategic Plan.................................................................................................................................................... 10 Results Based Budget Measures ....................................................................................................................... 11 Results Based Budget Measures ....................................................................................................................... 12 Appraisers by Fiscal Year ................................................................................................................................ 13 Appraiser Disciplinary Actions Imposed by Fiscal Year ................................................................................. 13

Agency Investigative Statistics by Fiscal Year
(Includes Real Estate Commission and Appraisers Board Cases)
In addition to written Requests for Investigations, the Commission's staff answers a number of questions daily, including complaints and inquiries received from telephone or walk-in individuals. The staff resolves most of these informal matters rapidly to the satisfaction of the public. Many complaints involve contract disputes and require legal assistance. In those instances, 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 13

Disciplinary Actions include Citations (generally for less serious violations - 216 in FY2014) or Sanctions (for more serious violations - 86 in FY2014). 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 and Board make extensive use of Consent Orders 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 and Board use the Consent Order 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. Only 13 cases were heard before an Administrative Law Judge in FY2014.
Fines and Disciplinary Costs Reimbursements Collected

GEORGIA REAL ESTATE COMMISSION & APPRAISERS BOARD

FINES DISCIPLINARY COSTS REIMBURSEMENTS

GREC $25,450
$143,455

GREAB $9,200
$67,310

AGENCY $34,650
$210,765

Agency Investigations Completed by Fiscal Year and Type
(Includes Real Estate Commission and Appraisers Board Cases)

Page 2 of 13

Real Estate Licensees by Fiscal Year Real Estate License Renewals by Fiscal Year
Page 3 of 13

New Resident Real Estate Licenses Issued by Fiscal Year New Non-Resident Real Estate Licenses Issued by Fiscal Year
Page 4 of 13

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 new licenses and the renewal of existing licenses. Direct costs include expenses for which the Commission directly pays; for example, salaries, rent, computer charges, administrative law courts and Special Assistant Attorney Generals (SAAGS) 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. In past years, 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 5 of 13

Revenue

Report of Revenues Collected and Amounts Expended by the GREC & GREAB for Amended FY 2014

$3,193,665

Revenue from Real Estate Licensees (New, Renewals, Reinstatements, Penalty Fees & Recovery Fund)

(-$ 112,660)

Required Deposit into Recovery Fund derived from New Real Estate Licensees

$ 506,955

Revenue from Appraiser Classifications and Appraisal Management Company's (New, Renewals, Reinstatements & Penalty Fees)

$ 283,389

Retained Revenues (Cost Reimbursement from Real Estate and Appraiser Licensees for

Disciplinary Actions) (Includes carryover from a previous year)

_________

$3,871,349

Total Revenue of the GREC & GREAB

________________________________________________________________________

Expenditure (Note: Expenditures by the Commission are limited by law to funds appropriated from the State Legislature and Retained Revenues)

$2,889,036

FY 2014 State Appropriation

$ 283,389

Retained Revenues (Includes carryover from a previous year)

$3,172,425

Total Amount limited by law for spending by the GREC & GREAB

(-$2,837,276)

Total Amount spent by the GREC & GREAB

$ 335,149

Unspent Funds from Appropriated Funds and Retained Revenue

Note: $51,760 Deposited into State Treasury

$283,389 Carried forward to FY2015 for benefit of GREC & GREAB

__________________________________________________________________________________

$3,871,349

Total Revenue Collected by the GREC & GREAB

(-$3,172,425)

Total Limited by Law for spending by the GREC & GREAB

$ 698,924

Excess Revenue collected from Real Estate and Appraiser Licensees over Appropriated Funds and Retained Revenue

$ 335,149

Unspent Funds from Appropriated Funds and Retained Revenue

(-$ 262,850)
$ 771,223 (-$ 283,389) $ 487,834

Estimated Cost of Human Resource services provided by the Secretary of State and of legal services provided by the Attorney General (Attorney General - $177,850) (Secretary of State $85,000)
Estimated Excess Revenue from Real Estate and Appraiser Licensees
Retained Revenue Carried Forward to FY2015 for benefit of GREC & GREAB
Estimated Excess Revenue deposited into the State Treasury collected from Real Estate and Appraiser Licensees

Page 6 of 13

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 2014, the Recovery Fund balance was $1,491,072.

Fiscal Year
1974-2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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 $83,560 $112,660

$2,290,125 $63,430
$128,801 $83,668 $29,720 $6,498 $3,916 $3,205 $3,374 $4,182

132 $796,101

1

$5,155

0

$32

0

$0

0

$0

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 10 $310,813 8 $150,866

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 $1,525,096 $1,491,072

Page 7 of 13

Brokerage $8,333/yr

Trust Account $8,333/yr
Common Violations
$8,333/yr
Common Violations $15,100/yr
Brokerage & Trust
Accounts $15,,000/yr

Online CE

Scholarship $20,000/yr

Classroom CE

Recovery Fund Contracts

Publications

Training
Georgia Real Estate InfoBase
$12,302

School Meeting $35,250/yr
Instructor Training Workshop $6,203/yr

Electronic Newsletter $9,000/yr

Page 8 of 13

Organizational Chart
GEORGIA REAL ESTATE COMMISSION (Five Licensees & One Public Member Appointed by Governor)
Chair Paul G. Brower, Marietta Vice-Chair Scott Free, Perry
Members Josh Bonner, Fayetteville David J. Burge, Atlanta Clayton Foster, Flowery Branch Jerry Warshaw, Atlanta

GEORGIA REAL ESTATE APPRAISERS BOARD
(Four Appraisers & One Public Member Appointed by Governor)
Chair D. Scott Murphy, Suwanee Vice-Chair Marilyn Watts, Fayetteville
Members Ronald Heckman, Stone Mountain
Jeff A. Lawson, Gainesville Keith Stone, Nashville

REAL ESTATE COMMISSIONER (Appointed by Commission)
Administration - Two Positions

Information Systems Information Services Education and Training Investigations

Three Positions

Six Positions

One Position

Thirteen Positions

Permanent Employees and Their Years of Service as of June 30, 2014
William L Rogers, Jr., Real Estate Commissioner (Sworn in on 01/18/2011) (3) Craig Coffee, Deputy Real Estate Commissioner (13)

Frank Ambio (8), Information Services Manager Jeff Angel (16), Systems Programmer 2 Audrey Brown (19), Investigations Area Supervisor Bess Buckley (18), Investigative Specialist Tiki Carter (2), Compliance Investigator Vivian Chang (13), Investigator II Deborah Dupree (28), Administrative Clerk Alan Gloer (30), Investigations Area Supervisor Tia Griffin-Barnes (7), Investigative Assistant Teresa Holder (17), Director of Information Systems Felicia Hubbard (20), Senior Information Specialist Letitia Jackson (4), Education Advisor

Chuck Jonaitis (4), Investigator Jennifer Jones (9), Administrative Clerk Diane Keys (13), Compliance Supervisor Josephine Lee (8), Administrative Operations Coordinator Shin Shin Liu (13), Network Specialist Shonda Mason (15), Investigator Joanne Newton (9), Investigative Specialist Carol Robinson (1), Information Specialist Jon Snelling (2), Investigator Margaret Wallace (7), Investigator Kimberley Wimby (14), Information Specialist

Page 9 of 13

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 them, their customers and clients, and the citizens of Georgia.
The Agency's Vision
For the public to encounter educated, knowledgeable, and ethical professionals and for those professionals to be able to obtain license renewals in an expeditious manner.
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

Measurable

State Goals

Objective

Completion of a SQL based Licensing Information Technology Build and maintain a quality state

Database by 2017. This project is

(IT) Department will

government workforce

approximately halfway completed and work with a private

has 5 remaining modules that require vendor to complete the Focus state resources on essential services

between $22,000 and $142,000 to

"Application Shell and and employ enterprise solutions

complete depending on the module. Login" module.

Georgia real estate and appraiser licensees will use well designed efficient online computer services to conduct business with the agency such as renewing licenses and changing firms.

Information Technology (IT) Department's Server Replacement Project to replace all agency network servers.

Build and maintain a quality state government workforce
Focus state resources on essential services and employ enterprise solutions.

Implementation of the 2015 changes to the Real Property Appraiser Qualification Criteria as established by the Appraiser Qualification Board of The Appraisal Foundation and overseen by The Appraisal Subcommittee.

Criminal Background Investigation Process to Include Fingerprints

Focus state resources on essential services and employ enterprise solutions
Promote safe communities and stable families where children thrive

Page 10 of 13

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, education, and disciplining 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 ensures professional competence and promotes a fair and honest market environment

Actual Results 1.a Number of Agency Investigations Completed in a Fiscal Year

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

2,181

2,157

2,053

1,659

1,730

.

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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 the exam are minimally qualified to practice real estate brokerage activities.

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

7.3% above

8.0% above

6.0% above

8.0% above

7.0% above

Goal 2:

Staff will process all applications submitted to the agency within five business days or less.

Actual Results 2 Service Provided

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

All completed applications will be processed by the

staff within five business days of receipt.

98%

98% 99% 98% 97%

Page 12 of 13

Georgia Real Estate Appraisers Board
Appraisers by Fiscal Year
GREAB Disciplinary Actions Imposed by Fiscal Year
Page 13 of 13