Unpermitted Additions

[Terraform]

This area is legal per zoning but has no permit for the conversion (assuming there are no building code violations). If the lender were to make, as part of the assignment condition, the exclusion of this area as a positive impact on value, would the report need to be based on a hypothetical condition?

 

[CANative]

It would be an unacceptable assignment condition, IMO. I'd tell them no.

Fannie Mae FAQ:

Q26. If the subject property features an unpermitted addition, can the square footage of the unpermitted addition be included in the total gross living area reported on the appraisal report?

If the appraiser has identified an addition(s) that does not have the required permit, the appraiser must comment on the quality and appearance of the work and assess the impact, if any, on the market value of the subject.

 

[Mike Kennedy]

Is this an immediate dis-qualifier for FHA loans?

Governing Municipality?

 

[CANative]

Governing Municipality?

This area is legal per zoning but has no permit

Didn't you see this?

 

[Mike Kennedy]

http://appraisersforum.com/showpost.php?p=2527185&postcount=9

 

[CANative]

Are you saying that the OP is incapable of accessing the zoning ordinances of the area he works in? And that you are an internet appraiser genius that can solve appraisal issues in areas you've never set foot in?

And your link has ZERO to do with this. Why are you so incapable of grasping even the simplest of appraisal problems?

 

[CANative]

Oh, now I see why you are SO confused about this issue.

For improvements to represent the highest and best use of a site, they must be legally permitted,

"Legally permitted" in this case does not refer to the administrative process of obtaining building permits. It refers to the the legal rights that run with the land.

Is an SFR legally permitted? Why yes it is. Since it is a use by right you don't need a use permit. But you will need a building permit.

This does not affect the highest and best use.

So stop copying and pasting until you know what it means.

 

[Terraform]

Context

This was my short and skinny on the converted area, I know I should have been more descriptive but sometimes less is more?

The subject GLA as reported differs from the tax assessor's records.

The subject appears to have an unpermitted garage conversion to living area per tax records, approx. half of the garage remains functional as a 1 car garage. The quality and appearance of the workmanship is comparable to the original dwelling. The conversion is considered to have a positive impact on the market value of the Subject. Comp 2 4710 SOAPSTONE DR has a similar 1 car garage conversion to living area.

Revised response from the lender:

Thank you for speaking with me today (AMC)! Per our last conversation, the lender has stated the following requests do not need to be addressed at this time:
3) There is an unpermitted garage conversion per the appraiser. We must be provided with approval from the City for this conversion to living area. (If this cannot be provided, the conversion to living area may need to be taken down. 4) Appraiser to provide a photo of the converted portion of the garage looking outside as we must see the status of the garage door, since 1/2 the garage was converted to living space. Appraiser to also provide an interior photo of the remaining 1/2 of the garage that is still used for its intended purpose.”.

All of the requested photos were already in the report. Basically the lender just recanted on the original request.

 

[CANative]

Good. So there is nothing you need to do (assuming they acknowledge that getting the permits is their problem.)

 

[Terraform]

Once I stated as per their request I would be making the report subject to a local official inspection based on the extraordinary assumption that no repairs or alterations would be needed, they changed their tune.