Occupancy Determination (CHECK BOX)

[AnonApprsr]

Good Morning,

I have to make a decision right away and need help. The property is an ocean front home, and like many Ocean Front homes, it is rented for 1 or 2 months in the Summer. At the time of inspection (a week ago) the tenant was there. The tenant is TAW, agreed to be there for 3 more weeks. I noted the occupancy as tenant, explained the situation in the addendum, and noted the typical nature of such activity.

I shipped the report yesterday, and this morning I am already being asked to mark it as Owner. I know that in Florida if you live the home for 6 months and a day it is considered Owner Occupied.

Is that Occupancy determination as of the day you inspect? In other words if you're renting out your home for a week, and that's when the appraiser comes, it's tenant occupied? Does the occupancy section only have to do with the home being a income producing property or not? What's the deal, guys? Help!

 

[residentialguy]

Is that Occupancy determination as of the day you inspect? In other words if you're renting out your home for a week, and that's when the appraiser comes, it's tenant occupied?

No, I don't believe that to be the case. (although, I don't have a guideline to whip out stating as such)

I would not ignore it, though. I would put owner occupied - confirmed by homeowner, and then state that at the time of the inspection, you found it to be rented by a tenant for a few weeks, which is typical in this area.

 

[BOCK FOLKEN]

Good one.

I would mark it Owner and be done with it.

The other 10 months of the year, the home is "owner occupied". Yes we know if it is a vacation home the owner is not actually there a lot of that time...but it is NOT actually vacant as it stands ready to be occupied by the owner at any time he chooses, and it is not listed for sale. The owner is maintaining it, and paying the taxes and fees etc, so it is the Owner's home even if it is not his primary residence.

I would note it is a vacation home (assuming that is the case) in the addendum to cover yourself. The current tenant in this case is temporary guest who is paying for the expenses of staying there temporarily. It is a fine line but reasonable I think.

bock

 

[Peter LeQuire]

Sounds like a second home used off season by its owner and rented during "peak" season. It is what it is - tenant occupied at the time of inspection. The owner can explain what's going on - that isn't your job.

 

[BRCJR]

Happens many times in my local market. Bristol Motor Speedway. People rent their homes for a couple weeks per year.

Care should be taken in determining if their insurance would be enforce if something happened during the "rental phase".

 

[AnonApprsr]

Happens many times in my local market. Bristol Motor Speedway. People rent their homes for a couple weeks per year.

Care should be taken in determining if their insurance would be enforce if something happened during the "rental phase".

So... what do you do regarding occupancy checkbox on the 1004?

The only thing that would change is the checkbox, the explanation is is the same in my addendum. And it doesn't affect value....which do you check off BRCJR?

 

[Pittsburgh Pete]

Depends on what happens the other 10 months of the year. You do not indicate anything other than that the property is rented for the summer months with no indication what happens the rest of the year. The devil, and your answer, is in the details.

 

[residentialguy]

Depends on what happens the other 10 months of the year. You do not indicate anything other than that the property is rented for the summer months with no indication what happens the rest of the year. The devil, and your answer, is in the details.

I don't see any harm in stating that the homeowner states that the home is owner occupied the other 10 months. No one ever knows who really lives in a house, yet we have no problem checking owner occupied.

 

[Webbed Feet]

No, I don't believe that to be the case. (although, I don't have a guideline to whip out stating as such)

I would not ignore it, though. I would put owner occupied - confirmed by homeowner, and then state that at the time of the inspection, you found it to be rented by a tenant for a few weeks, which is typical in this area.

Then I would say to you, read certification number 10 again if your SOW has you using a Fannie 2005 form for reporting and signature.

By the way, do you mark all the 2-4 family properties you do what are rented month to month as owner occupied also?

 

[Webbed Feet]

Good one.

I would mark it Owner and be done with it.

<....snip.......> bock

Would you quote the line numbers of USPAP that contain the "be done with it" standard of reporting for us?