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Building Permits

Discussion in 'Urgent - Help Needed' started by JULIEWEBB, Feb 23, 2006.

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  1. JULIEWEBB

    JULIEWEBB Sophomore Member

    0
    Sep 23, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Wyoming
    When a homeowner does remodeling or additions, is it within the Scope of Work for the Appraiser to make sure that the homeowner acquired building permits to do the work?

    I recently appraised a house that the homeowner's had added onto back in 1994. The lender wants me to find out if there was a building permit for the addition. I looked over previous threads on this forum and determined that it is outside the scope of work, and told the lender that. He says I'm wrong and that it is within the scope of work to do this. I have never done it before, so I need to know if I'm wrong.
     
  2. John Hassler

    John Hassler Senior Member

    0
    Jul 23, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Ask the lender to read Item 1 of the Limiting Conditions.
    "The appraiser will not be responsible for matters of a legal nature ...."

    I would be inclined to offer the lender, at an additional fee, my services to check permits on file with the appropriate government agency and report my findings. I would be sure to indicate that I would not be making any conclusions as to the legality of the addition but only report what is or is not on file with the city/county.
     
  3. Obsolescent

    Obsolescent Senior Member

    9
    Jul 6, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    Could the homeowner provide a copy of the building permit? I just did an inspection on a home that was nearing the end of some extensive remodeling and was being sold. There was no building permit posted so I asked the listing agent for a copy of the permit and he told me "there are no building permits." I informed the client and the client is now persuing the issue with the seller.
     
  4. Mr Rex

    Mr Rex Elite Member

    85
    Jan 12, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    North Carolina
    If the Homeowner wants the loan, they will find the permit real quickly, recently had one of these, the LO kept trying to put the onus back on me, I refused, the homeowner got it straightened out ASAP.
     
  5. Brad Ellis

    Brad Ellis Senior Member

    0
    Feb 7, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Julie,

    It is almost assuredly a part of your original scope of work.

    USPAP requires you to identify the relevant characteristics of the subject including "legal". Unpermitted space is not legal and may or may not add to value in the same manner as the legally permitted space. That, too, is a part of yor assignment under normal lending circumstances.

    Brad
     
  6. Smokey Bear

    Smokey Bear Elite Member

    0
    Dec 8, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    IF you do get a copy of the permit, make sure it's marked "final" or something like that. A lot of people take out permits, and do whatever they want and just never get the final inspection. It's not "legal" until it's got final approval of the work.

    Also, I hear people all the time say that their enclosed porch is living space, cuz they got permits. Permits doesn't make it gla, you can get a permit for a garage and that doesn't make it gla.
     
  7. Oregon Doug

    Oregon Doug Senior Member

    0
    Jan 15, 2002
    Professional Status:
    General Public
    State:
    Oregon
    Brad - You must IDENTIFY the relevent characteristics of the subject and deal with them in the analysis for sure, but to make the statement that they are "legal" or "illegal" is beyond the scope of your appraisal.

    Where are our USPAP instructors when we need 'em?

    Oregon Doug
     
  8. Otis Key

    Otis Key Elite Member

    0
    May 15, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    How did they start construction and get the materials, gas, electrical and other items of the addition performed without having a permit. Electrical and gas connections are required to be performed to code and I don't know of any licensed tradesmen that would do that without a permit someplace. Title and permit searches are outside the SOW for my reports. Like Michael said, the permit will show up when the HO wants to close the loan.
     
  9. Smokey Bear

    Smokey Bear Elite Member

    0
    Dec 8, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Lots of owner/contractors do good work on their house, but without permits. Some do work for their buddies.
     
  10. Brad Ellis

    Brad Ellis Senior Member

    0
    Feb 7, 2006
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    O. Doug,

    IF you identify the legal characteristics and analyze them how can you not know if an improvement is or is not legal? I do not get the difference but will happily allow myself to be enlightened.

    There are areas in which there may be no building codes but they are few and far between. If codes exist and you do something without the required permits it will be illegal even if you conform to all the codes. Virtually all of these laws were written to achieve a basic safety level in homes and to get tax money. Failing to do either will make it illegal by definition. They either followed the law or did not.

    But DO tell me where you are coming from. Based upon the original poster's question it seems that this client wants a typical scope of work- i.e., appraise it to its H+B use, and that would include an analysis of what is and what is not legal and the market's reaction to that. Some markets may not care and others, like mine, will care a great deal.

    This must be identified by the appraiser at the time of the assignment via communication with the client. I saw nothing that indicates some reduced scope of work was requested by the client, but perhaps there was.

    Let's let our original poster tell us if there was some sort of unusual circumstance surrounding this assignment. If not, determining whether or not improvements are legal is part of the typical scope of work.

    And by the way, I AM a USPAP instructor.

    Brad
     
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