Client Says Change It To 3 Bedroom. And Call The 4th Br A "study"

[hastalavista]

The house has a sanitary infrastructure rated for 3 bedrooms. The house was built, designed, and marketed as a 3-bedroom house with a den.
Now its den is being used as a bedroom. Would I call that a "bedroom" creating a 4-bedroom count knowing the infrastructure is designed to support a 3-bedroom count? No. I wouldn't.
I can say it is being used as a 4th bedroom but that its original design was 3 bedrooms and the home's sanitary infrastructure is rated to support only 3 bedrooms. There, I've accurately described the situation.
The only other question is if there is a value difference between homes designed to support 4 bedrooms (with a 4-bedroom septic system) and homes like my subject which are 3 bedrooms and a den (with a 3-bedroom septic system). If there is, that is my adjustment. If there isn't, I make no adjustment.

I sure wouldn't call it a 4 bedroom house, knowing that its existing infrastructure (sanitary) and original design wasn't 4-bedrooms.
If this was on a public sewer, it wouldn't be an issue. But a house and its infrastructure is designed to work collectively to optimize the utility. The subject does not have the infrastructure to support 4 bedrooms. It has the infrastructure to support 3 bedrooms.

 

[caleb1004]

Thanks all for your excellent responses. This commentary has helped greatly. In the end here is what i did (for better or worse):

1. changed to 3 bedroom with "study"
2. added commentary as to why this was necessary including commentary on septic system permits
3. researched 3 vs. 4 bedroom homes in the neighborhood, found there were very little differences in value, as some of the homes had also the same issue and had a 4th bedroom called something else
4. added a 3 bedroom comp ; found a minor $2000 adjustment based on differences in the grid after all other adjustments made (all other things being made equal)
5. no value change in the end
6. builder happy, client happy, appraiser - mmm, not so happy because i didn't get paid for all the additional research !! lol

thanks guys and happy appraising!

 

[Mr Rex]

I'd advise going back late night and peep to see if the room is used as a BR or not. Due diligence is due diligence.Might have to make them tear the bedroom out.

 

[Tim Hicks (Texas)]

So, was one of the "bedrooms" off the entry and travel to the nearest bath across other living areas instead of a hall or direct access?

 

[hastalavista]

4. added a 3 bedroom comp ; found a minor $2000 adjustment based on differences in the grid after all other adjustments made (all other things being made equal)

That $2k difference makes some intuitive sense.
As Howard pointed out to me, it is likely that when the home was built, and assuming the site could support a 3 or 4+ septic system, the cost would be less for the lower bedroom count than the higher bedroom count. That difference likely impacted the selling price of the subject vs. 4 bedroom homes. And while that difference may be get blurred over time due to market-taste changes, there is a very reasonable argument to make that the different septic system ratings have an impact.
That is exactly what your analysis concluded (at least as evidenced by value differences due to bedroom count). It is a discernible market difference.

6. builder happy, client happy, appraiser - mmm, not so happy because i didn't get paid for all the additional research !! lol

(my bold)

Au Contraire! You're understanding of such conditions has now expanded and you are much better equipped to deal with this situation in the future. You got paid... the payment you received is experience and a higher level of competence.

Good luck!

 

[RSW]

That $2k difference makes some intuitive sense.
As Howard pointed out to me, it is likely that when the home was built, and assuming the site could support a 3 or 4+ septic system, the cost would be less for the lower bedroom count than the higher bedroom count. That difference likely impacted the selling price of the subject vs. 4 bedroom homes. And while that difference may be get blurred over time due to market-taste changes, there is a very reasonable argument to make that the different septic system ratings have an impact.
That is exactly what your analysis concluded (at least as evidenced by value differences due to bedroom count). It is a discernible market difference.

(my bold)

Au Contraire! You're understanding of such conditions has now expanded and you are much better equipped to deal with this situation in the future. You got paid... the payment you received is experience and a higher level of competence.

Good luck!

You are so right! It is as difficult lesson to learn. One of the 1st things to do when you find out the house is on a septic tank is to find out home many bedrooms it is approved for. It will save a lot of time later on in the appraisal process.

 

[huntercharlie]

The local municipality issued a C/O for the subject property as a 4 BR home, thus it is a legal 4 BR home, case closed. (See post 9, in which the following is stated: just got the c/o ; 2 story with basement; 4 bedrooms above grade...

For decades inspectors in my area looked the other way for all kinds of things like this. The city started doing something about it about a decade ago. The county started to come around in the past two or three years.

 

[jay trotta]

No, apparently you don't know what it is or what it signifies. The C/O is the official determination that that the home complies with all applicable laws and regulations, which would include any applicable septic/sewer laws/regs/permits issued by the health department (at least that is how it works in every jurisdiction that I am familiar with). Once the C/O is issued, that certifies that the house has been deemed to be legal by the local municipality.

C/O is the Certificate of Occupancy (allows occupancy); Health Code is different and specific to the application applied for, they are 2 separate permits, the C/O is a Final Inspection for legal occupancy. You can occupy without one, but that's another discussion.
Health Codes, for specific BR counts, as I had noted require specifics for the sanitary system to function properly for a given period of time and therefore, the need for a "reserve area" at the time of application. My area may be a bit more tedious, but what the Code Calls for, is what is applicable and applies to the area in which you work.

 

[timd354]

K

C/O is the Certificate of Occupancy (allows occupancy); Health Code is different and specific to the application applied for, they are 2 separate permits, the C/O is a Final Inspection for legal occupancy. You can occupy without one, but that's another discussion.
Health Codes, for specific BR counts, as I had noted require specifics for the sanitary system to function properly for a given period of time and therefore, the need for a "reserve area" at the time of application. My area may be a bit more tedious, but what the Code Calls for, is what is applicable and applies to the area in which you work.

Everywhere that I am familiar with a C/O is a determination by the municipality that the home meets all applicable legal requirements including septic

 

[timd354]

2) A certificate of Occupancy does NOT state bedroom /Bath count on the document, it doesn't state size or anything else but the address/legal description as appropriate.

That is an unsupported assumption on your part. The only person who has actually seen it says it does and I have personally seen many C/O's that include the BR and bath count