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Illegal Duplex

Discussion in 'Urgent - Help Needed' started by Em Tee, Sep 10, 2007.

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  1. Em Tee

    Em Tee Senior Member

    0
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    I just can't get my brain wrapped around this - I need help!!!

    Subject is a duplex. According to city planning & zoning, it's illegal and they're only allowed to have a single family residence on that lot. City said if they investigated, owners would be required to put it back to SFR.

    My client now wants me to appraise it "as is", with a cost to cure to convert it back to SFR. That would require the demolition of the smaller 2nd unit. Other than the fact that I have no freakin clue what that might cost, isn't that a hypothetical condition? Because "as is" is an illegal duplex. To appraise it as an SFR would be hypothetical. Am I getting that right? Also, if they wanted it appraised as an SFR, there wouldn't be a cost to cure, would there?

    My mind is going in circles. What are my options for appraising this property?

    Thanks!!
     
  2. Austin Martin

    Austin Martin Sophomore Member

    0
    Oct 26, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    Iowa
    Cost to remove second unit

    I know that M&S gives a cost to demolish SFR's this should get you in the ball park
     
  3. PropertyEconomics

    PropertyEconomics Elite Member

    1
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico

    Mary .. honestly it seems you are in need of educating your client in a very polite way as to how you must proceed with this. I think if you do so, or ask to speak to the underwriter ... it should be clear how they want you to proceed and thats that.

    Your not confused .. they are. Best of Luck to you. :clapping:
     
  4. George W Dodd

    George W Dodd Senior Member

    0
    Jul 9, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    Mary,

    Would it be possible to convert it to a SFR with an attached in-law suite or some other single family use. Please provide some more info, are the units attached or detached? How about size, you say the smaller unit but how big is it? Are you sure the County/City would require it to be demo?
     
  5. Charles Knutson

    Charles Knutson Member

    0
    Jun 3, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    I'm not sure it would require demolition -- sometimes, removing the kitchen is all that is needed to convert a rental unit into a legal home office or studio space, or separate quarters for a teenager.

    Cost to remove a kitchen would be minimal, and it would take the rental unit issue off the table.

    Would the second unit be legal as a mother in law apartment? Or guest quarters? I used to see those all the time, and they added value in some entry level homes. Often they were in a basement, and they received a higher positive adjustment for the M-I-L Apt than an ordinary finished basement.

    There are several ways to approach this, but I would do the kitchen demolition cost to cure -- that should be $1k or less, and maintains the contributory value of the smaller structure.
     
  6. Em Tee

    Em Tee Senior Member

    0
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    2nd unit is too large for the lot so it couldn't be converted to in-law unit. The duplexes are attached on 2 walls and the configuration is weird enough that I don't think they could be melded into one really big house. City stated they would require "conversion" to SFR, but didn't state how that would have to occur. Tear down is the best option I see.

    CB3? Appraise it as SFR subject to 2nd unit being torn down (or modified). Then I wouldn't have to include a cost to cure, right?
     
    Last edited: Sep 10, 2007
  7. PropertyEconomics

    PropertyEconomics Elite Member

    1
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico

    Mary .. the only problem there is thats not an "as is" but I think you could do it if they were to agree to tear it down.
    My guess is the lender wants a value assuming its not there on a cost to cure adjustment basis but without the hypothetical or the subject to. Id call the underwriter ... I really would.
     
  8. Don Clark

    Don Clark Elite Member

    18
    Jan 17, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    That's the best advice any of us could give.

    And, do not get some message relayed by a phone monkey. Insist on speaking directly with the underwriter.
     
  9. Walter Kirk

    Walter Kirk Senior Member

    17
    Jun 24, 2003
    Professional Status:
    Licensed Appraiser
    State:
    New Jersey
    Is it possible that the use is grandfathered? Can the second unit be accessed from the first unit?
     
  10. CANative

    CANative Elite Member

    368
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Unless you've got at least 3 sales of similar properties with illegal accessory units to demonstrate market acceptance and values, your client's deal is dead in the water. Cost to cure is meaningless (and most likely misleading) drivel in this case and is pure BS.
     
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