Are we required to obtain permits?

[Krystal Schware]

I have seen a few similar posts but nothing of concrete answer.
I had recently completed an appraisal on a home that had a professionally finished basement. The 'badger-you-to-death AMC' has come back now asking for me to obtain and provide copies of the permit(s). I have been told by many of my peers as well as the gentleman I trained with that we are not trained in this area and it is not part of our scope of work to become the permit police, etc. I just want to see what is accurate before I decide how to respond to the AMC and/or how to accurately handle the situation. Is it our responsibility as appraisers to obtain permits?
Thanks in advance for any assistance.

 

[Thomas Fiehler]

Only been doing this 37 years and never pulled a permit. Suggest they contact a title department.

 

[Mike Kennedy]

I have seen a few similar posts but nothing of concrete answer.
I had recently completed an appraisal on a home that had a professionally finished basement. The 'badger-you-to-death AMC' has come back now asking for me to obtain and provide copies of the permit(s). I have been told by many of my peers as well as the gentleman I trained with that we are not trained in this area and it is not part of our scope of work to become the permit police, etc. I just want to see what is accurate before I decide how to respond to the AMC and/or how to accurately handle the situation. Is it our responsibility as appraisers to obtain permits?
Thanks in advance for any assistance.

1. governing municipality?

2. which definition of Highest and Best Use was utilized in your appraisal?

3. as of the Effective Date of Appraisal did the site "as-improved" represent a legal, legal nonconforming, or illegal use based on applicable local ordinances (i.e. laws)?

 

[Scott R Marshall]

My answer would be "it depends". Was it within your original lender client requirements and guidelines? If so then as you accepted the assignment you had better do it. If you believe that you should not then don't accept such assignments or ask the client to waive the requirement.

I have some clients that do require it and some that don't. For those that require it I do the research. Those that don't, I don't. Having said that, if your local municipality has a known habit of going after unpermitted additions and/or your typical buyer verifies permits, I would think you would be hard pressed to not perform the research yourself.

 

[CANative]

1. governing municipality?

2. which definition of Highest and Best Use was utilized in your appraisal?

3. as of the Effective Date of Appraisal did the site "as-improved" represent a legal, legal nonconforming, or illegal use based on applicable local ordinances (i.e. laws)?

*SIGH*

Only been doing this 37 years and never pulled a permit. Suggest they contact a title department.

 

[Abester]

I guess appraisers ARE permit police...

 

[Krystal Schware]

Hi. Was not made aware of the finished basement prior to the inspection so it was not part of the original SOW to obtain and provide any permits. (never heard of this request for a basement either..only for additions) They want permits for the basement being finished.

Appraised as-is- 8 year old two story old home, SFR with a rec room, den and full bath in the basement. Finished basements are allowed in this area and quite common- is conforming.

 

[Mike Kennedy]

Hi. Was not made aware of the finished basement prior to the inspection so it was not part of the original SOW to obtain and provide any permits. (never heard of this request for a basement either..only for additions) They want permits for the basement being finished.

Appraised as-is- 8 year old two story old home, SFR with a rec room, den and full bath in the basement. Finished basements are allowed in this area and quite common- is conforming.

1. What "area"?
2. Governing Municipality is a County, Borough, Town, City?
3. Was the 8 year old home built with an unfinished or finished basement?
4. Did the SOW agreement with the Lender (or AMC Agent for a Lender) include an assignment condition to report the appraisal opinion on a GSE summary report format in compliance with GSE guidelines?

 

[hastalavista]

My answer would be "it depends".

This is my answer as well.
Sometimes, depending on the assignment, I'll go to the planning/building department. Not only in the small towns, but I'll do it at the larger communities as well (Oakland, for example). Fortunately for me, many of the communities have their permits on-line.
These situations are usually when I think something has been done to the property which wouldn't be allowed (vs. not just having a permit for doing it).

For a couple of clients, I do pre-foreclosure valuations; these are usually a drive-by situation. In that case, I'll try to research the property in detail (prior MLS records, GoogleEarth Pro overhead/measurement, etc., etc.). I've caught some odd looking stuff by researching the property first; I'll call the client and tell them I may have to dig a little deeper; sometimes I'll charge more, sometimes I won't (if I had to go to downtown Oakland, I'd charge a bit more. If I'm going to smalltown building department and that takes an extra 20-minutes, I probably won't charge... that's me).
I'll do this because I think, given the intended use and the type of property verification (observation from the street, reliance on public/MLS data), that is a prudent thing to do in order to conclude credible results.

Other times, if it it probably can be done with a permit, I may not go chase the permit down (I'll try on-line or use a vendor service, BuildFax).
San Francisco is a great example of this: Probably 25% of the finished ground-floor areas in certain neighborhoods are without permits. The market doesn't care (and the city hardly cares either). I'll look on line, but I won't go to City Hall for that one. If the lender wants a permit, they can either (a) pay me to get one, or (b) get the borrower to go get it.

Obviously, if my engagement-agreement requires permit research and I accept the assignment, I'm obligated to do that research. I don't have any clients that have that requirement.

I disclose everything in my report, and provide my rationale for my valuation analysis. Market value, as-is. If the client wants me to make the report "subject to" permits, that's their call: they can get the permits and the UW can sign-off on the condition.

Good luck!

 

[Krystal Schware]

1. What "area"?
2. Governing Municipality is a County, Borough, Town, City?
3. Was the 8 year old home built with an unfinished or finished basement?
4. Did the SOW agreement with the Lender (or AMC Agent for a Lender) include an assignment condition to report the appraisal opinion on a GSE summary report format in compliance with GSE guidelines?"

1&2 is allowed in the Township and per zoning. Common to the market area.
3- not sure as of yet. waiting to hear back from the homeowner.
4- yes 1004/UAD compliant

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