Non-permitted 2nd unit?

[Johnny Knucks]

What do you mean when you say the garage has been converted into a "second unit?"

Typically, in a SFR dwelling, a garage is finished or more extensively converted to liiving area. Does this garage now have a kitchen and bathroom? what kind of windows and access does it have ? Did they remove the garage door? Without further description, it is not possible to give a credible answer.

Yes the garage has k/b and is approximately 750 sf. 3 brs and a living area. Single entrance and a legal exit window in every bedroom. It's all electric with public w/s. Garage door is removed and it looks like a standard ranch style with a deck off the side.

 

[Johnny Knucks]

Wait....what? I thought the garage was converted to a non permitted Adu. What do you mean it's also a detached garage?

I guess I should have clarified, I believe the structure is legal, but it does not have the required permits. That's what I meant by non-permitted.

 

[swandel1]

Watch the septic issue. I have a neighbor that converted a detached garage into an ADU. He didn't want to pay for permits, inspections, separate septic system, etc. so he just made a big pit, put a cover on it, then installed a patio on top of that. It eventually backed up and flooded the illegal ADU. He then had to do it the right way and pay for the clean-up. I am not sure if the insurance company reimbursed him.

 

[J Grant]

Yes the garage has k/b and is approximately 750 sf. 3 brs and a living area. Single entrance and a legal exit window in every bedroom. It's all electric with public w/s. Garage door is removed and it looks like a standard ranch style with a deck off the side.

Per your description and photo, this is no longer a garage! Maybe it started out as a garage, but now it is a guest house or ADU ( I dislike the word unit )

There is no way you can do the appraisal giving igt no value, as if it does not exist - unless you use a hypothetical condition and a URAR form will not let you do that. It sounds like an unacceptable assignment condition and you need to tell the client you can not do what they are asking.

Why doesn't the client want it included in value ? Fannie/Freddie far as I know, allows lending on not permitted guest houses or ADU's - ( the appraisal needs 2 similar non-permitted use guest house comps )

 

[J Grant]

Yes the garage has k/b and is approximately 750 sf. 3 brs and a living area. Single entrance and a legal exit window in every bedroom. It's all electric with public w/s. Garage door is removed and it looks like a standard ranch style with a deck off the side.

This is no longer a garage. I do not understand why you keep calling it a garage-makes it very confusing .

 

[Johnny Knucks]

This is no longer a garage. I do not understand why you keep calling it a garage-makes it very confusing .

I agree, it's no longer a garage, however it is listed as a detached garage on public records.

 

[Surf Cat]

Many municipalities have amended their zoning rules and regulations to allow for ADUs ( converted garages, converted sections of the main dwelling to have separate entrances with a kitchen and bathroom, Etc.) Per the subject's zoning, this may be allowable....you need to verify.

If the above is the case, you can find a couple sales with non permitted garage conversions like yours or a non permitted addition.... "something" to show market acceptance and what the market reaction is for said non permitted additions.

You need to find legal, permitted Adu builds to extract a percentage to find out the difference between legal and non-premitted ADU's are. You need to do the same thing for properties with and without garages as subject no longer has a garage.

Before doing this however, contact your client and let them know that's how you going to approach this assignment. Or, if they want a hypothetical as if the garage conversion never transpired.

 

[J Grant]

I agree, it's no longer a garage, however it is listed as a detached garage on public records.

Comment: "The rear aDU ( or guest house) is converted from a former garage. Public records still lists it as a garage. The area zoning is legal for a guest house or ADU. The conversion was not done with a building permit. The consrtrcion looks adequate and functional. Inspection recomended since no building permits were pulled."

 

[Johnny Knucks]

Per your description and photo, this is no longer a garage! Maybe it started out as a garage, but now it is a guest house or ADU ( I dislike the word unit )

There is no way you can do the appraisal giving igt no value, as if it does not exist - unless you use a hypothetical condition and a URAR form will not let you do that. It sounds like an unacceptable assignment condition and you need to tell the client you can not do what they are asking.

Why doesn't the client want it included in value ? Fannie/Freddie far as I know, allows lending on not permitted guest houses or ADU's - ( the appraisal needs 2 similar non-permitted use guest house comps )

I don't have similar comps with non-permitted guest houses, so that's not a solution. I'd like to do is as just an outbuilding and give it no value, but I'm not sure that's the proper way to go. It doesn't have any permits, so technically it's illegal, and I'm thinking of doing that. It's either that or legal/nonconforming, but I'm not a home inspector or county inspector. What I think I should do is make it subject to inspection. That means the deal can't go through unless they get it inspected, otherwise I think I'll be liable.

 

[J Grant]

Many municipalities have amended their zoning rules and regulations to allow for ADUs ( converted garages, converted sections of the main dwelling to have separate entrances with a kitchen and bathroom, Etc.) Per the subject's zoning, this may be allowable....you need to verify.

If the above is the case, you can find a couple sales with non permitted garage conversions like yours or a non permitted addition.... "something" to show market acceptance and what the market reaction is for said non permitted additions.

You need to find legal, permitted Adu builds to extract a percentage to find out the difference between legal and non-premitted ADU's are. You need to do the same thing for properties with and without garages as subject no longer has a garage.

Before doing this however, contact your client and let them know that's how you going to approach this assignment. Or, if they want a hypothetical as if the garage conversion never transpired.

Agree with your post, just one point - as far as I know, we can not just create a HC on a URAR lending appraisal where a major property characteristic does not exist/never happened.