Request to Remove Addition from Appraisal

[AngelEyes359]

Most of my clients expect me to verify permits for additions, major renovations, in-law or accessory apartments and on occasion attic and basement finish. That's fine. Sometimes the permit information is available. Sometimes it's not. I report what I see and find but that's a separate issue for what I give value. I don't get to decide that. Neither does the UW. The market decides that.

I'm doing an appraisal now of a SF with a bootleg in-law in the basement.
The town does not recognize in-law apartments and there was no record of permits being taken out for any of the basement rooms. I am going to disclose that but I am also going to give these rooms contributory value. Why? Because I have other sales with the same unpermitted feature and hordes of data that the market still gives it value.

The underwriter wants you to hide the truth to make their job easier. What they're proposing is as isn't, not as is.

 

[Pat Butler]

Unfortunately, USPAP doesn't define physical segment. I've always thought that to pertain more to land, or at least to breaking apart entire 'things' like the house from the land, as compared to breaking apart a house into different segments.

 

[Fritz in NY]

We have discussed this numerous times and the consensus is...

We are not the permit police! That said...

You should report what you see. The improvements are what they are. Value the property in it's "as-is" condition. What would a buyer do? If that is buy it because it has zzz square footage then that is what the value is. If you know the addition was done without permits include that information in your report.

YES, we are not the permit police or code enforcement etc. In most SOW orders "permits" search/verificaion is not included. By I do believe somewhere we have to state it is "Legal".
If we had to get permits for the original dwelling, the pool, the deck, addition # 1, addition # 2 it would take longer that the inspection itself.

 

[Corbyn Reece]

It's looking like I'm going to take the one room out of GLA per one of the agents that that is an unpermitted room. I'll put in its contributory value elsewhere on the grid. If the underwriter insists I take the value out, perhaps I'll take it out of the grid but I will write about it elsewhere in the addendum and not change my appraised value. In other words, perhaps to assuage the lender I'll reformat some of the things in the report but keep the overall gist of it the same - no value change, no misleading changes.

 

[Fritz in NY]

illegal units

Most of my clients expect me to verify permits for additions, major renovations, in-law or accessory apartments and on occasion attic and basement finish. That's fine. Sometimes the permit information is available. Sometimes it's not. I report what I see and find but that's a separate issue for what I give value. I don't get to decide that. Neither does the UW. The market decides that.

I'm doing an appraisal now of a SF with a bootleg in-law in the basement.
The town does not recognize in-law apartments and there was no record of permits being taken out for any of the basement rooms. I am going to disclose that but I am also going to give these rooms contributory value. Why? Because I have other sales with the same unpermitted feature and hordes of data that the market still gives it value.

The underwriter wants you to hide the truth to make their job easier. What they're proposing is as isn't, not as is.

In my market a deck, patio, finished basement and/or an in-law unit is almost NEVER known
to exist according to the town/municipality.
Our liability would be huge, if the town came after the homeowner, because of our inspection/declaration that we SAW IT.....

 

[23Degrees]

Does the zoning code state directly or via reference to the building code that permits are required for such a structure? If so you might want to consider indicating the illegal situation as it relates to zoning compliance by checking the appropriate box. In some venues not doing so could also be considered misleading.

 

[Riick]

Another reply from underwriter, paraphrasing:

"other appraisers have mentioned unpermitted additions and not included the square footage or value in their appraisals. That way they are NOT ignoring the addition nor are they giving it any value. This is common practice and I have not had any issues with appraisers understanding this"

I'd tell her where to stick it and/or talk to her supervisor, but this is an important client. Thinking about my next move . . .

Bolded text above is the giveaway.
Every time I've heard that phrase ("...all the OTHER appraisers have no problem modifying the value upward by 80%")
it was from an AMC monkey-brain who wanted me to lie.

Well can't you do it on just this one???

Would it break any ethical rule to lie for us, just once, today?

Well, you could move to a new town, and start over as a Virgin.

/

 

[Eric C]

Its hypocritical to verify permits for one thing and not another. In my city, a permit is requried for any little you do to the house. If you're going to verify permits for an addition then you might as well also verify permits for the new central ac, the remodeled bathrooms, the remodeled kitchen, the new plumbing, or electricals.

you're telling me if the HO built a new pool and didnt pull permits you;re not going to give it value???........or if the interior was completely remodeled with no permits you're not giving it value?....

 

[Mike Kennedy]

In my market a deck, patio, finished basement and/or an in-law unit is almost NEVER known
to exist according to the town/municipality.
Our liability would be huge, if the town came after the homeowner, because of our inspection/declaration that we SAW IT.....

Example:

http://www.colonie.org/building/#permit
Permits & Applications

• Land Use Law within the Town of Colonie Code
• Zoning Map

[HISTORY: Adopted by the Town Board of the Town of Colonie 12-28-1978 by L.L. No. 7-1978. Amendments noted where applicable.]
GENERAL REFERENCES Building construction administration — See Ch. 62.
Dogs and other animals — See Ch. 79.
Fire prevention — See Ch. 100.
Water conservation — See Ch. 188.
Zoning — See Ch. 190.

Purpose.


Officials authorized to issue tickets.


A. The following public servants of the Town of Colonie are hereby authorized to issue and serve appearance tickets with respect to violation of a state statute, a local law, ordinance, rule or regulation of the Town of Colonie that such public servants are, respectively, required or authorized to enforce:
(1) Building Department Superintendent, Chief Building Inspector and Building Inspectors: building and zoning.

http://www.colonie.org/assessor/
http://www.orps.state.ny.us/rps/index.cfm

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[jversen]

Addition

How about an extraordinary assumption that the addition has met all requirements. Reserve the right to reconsider if found to not have met all requirements.