100% Rebuild

[jay trotta]

Don't know your area, but here is what I did (recently) because I find THAT request from any Lender to be the #1 link to get you later.

Most States have a base "Zoning Requirement" for all municipalities to follow, the municipality can change them to fit their "Local zoning" requirements. Your base statute gives the authority.

What I did was to force the Lender to obtain a "Letter of Intent" by a local attorney with respect to the State Statute and provide that information to us. We have that letter on file for future use and have incorporated that information into our (Otis) addendum and it goes into every single report. To the best of my knowledge, there is NO SUCH THING as a 100% rebuild letter that any Zoning office provides. Municipal ZOning Regulations are; living, breathing documents that have the ability to change and therefore, do NOT guarantee the future at all.

cheers

 

[Webbed Feet]

Google "California Accessory unit law" and there is some great boiler plate in the state code to get them off your back. As the previous posters have stated it is a lender's problem not an appraiser's. If you did an "as - is" appraisal and had apples to apples you're done!

Mr. Brody,

You mean it's more likely he compared a crab apple to maybe one other crab apple and two nice Golden Delicious apples or three. Because what he described sounded "Illegal"... not "Legal Nonconforming"

Legal nonconforming generally requires either a variance to be granted or something to be built prior to zoning code. We have a "hobby" room built clearly AFTER zoning code was in place because he stated it was done with permits. It was then later converted lacking any permits to do so AFTER zoning was already in place. I don't know about everyone else's jurisdictions they appraise in but all the ones I do certainly require permits for kitchens, baths, and sleeping areas. Little things like fire code, electrical and plumbing inspections required. Not to mention statues and codes to prevent building defacto duplexes in SFR zoning areas. All of my jurisdictions also would allow a "Legal Nonconforming" to rebuild within one year at least if detroyed below a certain percentage or value level. Not disallow rebuilding at all. Sorry, but what he posted shouts "Illegal", that is why they will not allow it to be rebuilt under any circumstances as a ADU. It has to come back as what it was permitted for, a hobby room.

You've no idea how many times I've found out appraisers ahead of me checked the "Legal Nonconforming" box just because the improvements had been there awhile and they 100% failed to even try and find out the truth when zoning and improvements did not match up correctly. Have to get that "As-Is" work out the door in 24 hours or less don't you know...

Barry Dayton

 

[Lee Lansford]

If the appraisal contained sold comparisons with zoning status the same, or very similar, to the Subject, the market's reaction to the status is reflected in the data.

Lacking such competitive properties, it would be very difficult (as in "not appropriately supported") to pin an opinion of value on the Subject. Lacking such data for analysis, the market's reaction to the Subject's zoning status is an unknown.

If the appraisal has been appropriately developed and communicated, the appraiser has done his or her job.

 

[hal380]

This may have been covered already, as I frequently skim long threads. Here is my position .... 1st I would not consider a future rebuild. My work is only valid on the effective date of the appraisal. Perhaps the propety could be rebuilt "today" but why be a guantor of a third party's performance in the future. 2nd Was this requirement in the original "Scope of Work?"

The most I would do is forward a copy of the relevant page of the zoning Regs, and with whatever disclaimers foreward it to the underwriter. My cover letter would only indicate that this is the general rule covering typical situations at the present time and any impact on future decisions of the zoning board is unknowable at the present.

Regards

Hal

 

[Lee Lansford]

Most likely, the U/W is asking for the broker to provide a rebuild letter, and the broker is asking for you to do it because he/she either doesn't know how, or doesn't want to do it. Just say no!

If the comps used are also legal non-conforming and would not be rebuildable, I would state that as proof that the market doesn't care. If the comps that you used are legal and rebuildable, however, you may not be comparing apples to apples.

Good luck!

Carole nailed it!
As long as the sold comparisons have the same (or, VERY similar) zoning status as the Subject and this data forms the basis for the opinion of value, the appraiser has done his or her job.

 

[Richard Carlsen]

I never answer "rebuild" questions flat out. If the client insists, then I would make the report subject to being provided with a letter from the appropriate governmental authority on the subject of rebuild.

Investigating and committing to a statement on rebuild is not part of the scope of work. Commenting on the contents of a rebuild when provided with documentation from the governmental authority can be part of the appraisal. I just don't go looking for this information as it is something in the future and subject to governmental action or changes in the law.

If the UW wants a rebuild statement, ask that the HO provide a letter from his/her governmental authority that it can or cannot be rebuilt and extend your neck no father than that letter goes.

 

[hastalavista]

This is the comment I used:
Please let it reflect throughout this report that after a conversation with the Los Angeles County Planning Department it was determined that the accessory unit is legal non conforming as an accessory unit, however it cannot be rebuilt as such. It was also determined that it can be rebuilt as a hobby room as originally built. This appraisal was based on the subject in its as is condition, therefore no further adjustments were made. The County will not provide a rebuild letter unless a formal request is made in writing. This falls outside of the boundaries of the appraisers scope of work and the appraiser recommends that said letter is requested by the lender.
Basically I compared it to other SFR with accessory units because that is what I have, AS IS. Am I wrong?

(all my bold)-

No, I don't think you are wrong. Here's what you said:
1. I spoke to the planning department and determined two things from the conversation:
a. The accessory unit is legal-nonconforming (as indicated in the report)
b. Per the planner, it cannot be rebuilt as a accessory unit but only as a hobby room.
2. I valued the property "as is"; "as is" includes the market reaction to the accessory unit.
3. The County will not provide a "rebuild" letter unless a formal written request is made- such a request is outside my SOW. I recommend that if a rebuild letter is required, the lender obtain one from the appropriate source.

That works for me- others provide some good caveats when dealing with this issue but I think you are "ok".

 

[Richard Carlsen]

Denis wrote:

3. The County will not provide a "rebuild" letter unless a formal written request is made- such a request is outside my SOW. I recommend that if a rebuild letter is required, the lender obtain one from the appropriate source.

The only problem with this reply is that if the inclusion of a rebuild letter is part of the assignment, you have to address the rebuild issue specifically and not through a "recommendation" to the client. They've already passed the buck to you so you have to fulfill the assignment requirement.

Two choices as I see it: Decline the order if it contains a requirement for a rebuild letter or require a rebuild letter from the appropriate governmental authority be provided by the HO by making the report "subject to".

 

[hastalavista]

The only problem with this reply is that if the inclusion of a rebuild letter is part of the assignment, you have to address the rebuild issue specifically and not through a "recommendation" to the client. They've already passed the buck to you so you have to fulfill the assignment requirement.

Two choices as I see it: Decline the order if it contains a requirement for a rebuild letter or require a rebuild letter from the appropriate governmental authority be provided by the HO by making the report "subject to".

Richard-

Good to see you post lately- figured you went on a round-the-world fishing trip!

Here's a question:
I assume that the request for a rebuild letter came after the intial engagement. I further assume that it is difficult to cover all possible contingencies in a typical mortgage finance appraisal order in "real time".
If I am correct, then I see my point#3 as a clarificaiton of the initial engagement- not as a failure to complete what was agreed to. But, I could be wrong.

As I have posted before, I have the following in my SOW addendum:

I have reported the subject’s zoning based on my data research. The source for zoning may be public records, a zoning map, a telephone call to the zoning/planning department, or other sources considered reliable. I have also researched the zoning, and included the appropriate zoning description.
Some properties may be “Legal, non-conforming” due to lot size requirements of the current zoning ordinance, a zoning use change, or other reasons. One example would be an older home may be located on a lot that does not meet the minimum lot size requirements of the current zoning; in such a case, I will indicated the subject is “Legal, Non-Conforming (Grandfathered)” due to minimum lot size requirements.
Note: My research into the subject’s legal/non-conforming status is limited to my phone call into the appropriate jurisdiction/authority or based on a review of the zoning map and zoning ordinance. Requests for “Rebuild Letters” by the client exceed the SOW of this report- I advise the client to obtain such documents directly from the appropriate authority.
Additional comments in the report addressing if the subject can be “rebuilt if damaged/destroyed” require me to undertake a legal inquiry into the subject that I am not qualified to undertake. If possible, I will include a statement from the jurisdiction (if I am able to obtain one) or “cut and paste” what zoning ordinance comments I find based on my research that address the repair/replacement of improved non-conforming lots and/or uses. I do this as part of my data research service, and I am not providing an opinion as to the ability of any particular property being rebuilt “as is” or in any other configuration. I furthermore disclaim any liability for how such information is used and interpreted by my client that I research and provide in this matter. In regards to zoning, my liability is limited only to the verification of the subject’s zoning. I advise my client that any definitive answer to the question regarding the subject’s ability to be rebuilt (“as-is” or in any other configuration/use) is beyond my SOW, and further advise the client that the client must contact the appropriate jurisdiction direct to resolve any question in this matter. The information provided in my report is a summary of my research, and is not an opinion (either affirmative or negative) regarding the ability of the subject to be rebuilt.​

 

[Richard Carlsen]

Denis

I like the statement in the SOW. Putting something in is fine. However, if the client says that the order will include a rebuild statement and you accept the order, you have to comply. Hence, way of complying by requiring a letter from the governing authority. No phone calls or he said/she said statements.

I've been off the board for a while as I have moved about 50 miles from where I used to live and am working in semi-retirement now. It is not hard to get used to 2-3 orders per week. BTW, where do I sign up for that round the world fishing trip?