Additon to home built without permits

[Terrel L. Shields]

lemme back up a minute and ask what the county ordinance is.

you said

They replied that it was because the county didnt know about it.
I guess my question is, since this is currently not a "legal" use, and any of those things you sited above can also happen in this county, is there an affect on value?

In my state it is the obligation of the assessor to find it, not the obligation of the homeowner to report it. Secondly, the assessor does not have anything to do with the planning board here. And again, this applies only to my county, only commercial uses require a pre-construction permit out side the city limits. The city regulates anything within its boundaries it likes, but not the county. i.e.- I can build a house any where on my place without asking anything of anyone. The only permit i have to have is a septic has to be installed by a certified plumber who has to perk the ground and the electric co. will require me to have a 911 address before they will set a pole.

So, does your county require a permit? And, if so, what happens if they discover bootleg construction? Call them and find out what they typically do. Deduct a typical fine, if that is the case, or typical fees to inspect + permit + fine. I hope you are not assuming that because the assessor did not know about the addition, the county has been stiffed. These functions are normally separate in any jurisdiction I work.

 

[Mike Garrett RAA]

My take is quite different.

1. What if they never told you this was done without a permit?

2. Is it really of higher quality than the existing house?

3. Does it qualify as a super adequacy?

I would appraise the house with the addition and include a line in my report that it appears this addition was done without a building permit. Let the underwriter decide if it shouldn't be included in the GLA. It isn't storage from what you say, so calling it that is misleading.

If the underwriter comes back and says they want want it subject to a permit then change your report. In my county the regional building department can come out and inspect after the fact. Most likely they will just require the owner to pull a permit and have it inspected.

We are not to be "inspection police" for either the building department or assessor's office. Really want to get your ahhhhhhh thingie in a ringer mention it to the assessor's office and have them knocking on the home owners door right after you did your appraisal.

 

[Mike Garrett RAA]

I forgot to add one more thing....

This does not appear to me to be an "illegal use". Its still a residential property...just done without a building permit. Most likely they will slap the owners hand, make them get a permit and have the property inspected.

 

[larryhaskell]

Monica:

As part of the Highest & Best Use process, you have to determine if the improvements are legally permitted. Its very important to know the policy of the governing agency.

I recently inspected a property in our county that was not located in either of the incorporated cities. The original structure was a manufactured home. Later, a stick built addition was made to the living area that was permitted. Subsequently, a 2 car garage was added to the stick built area. Above the garage, a 2 bedroom, 1 bath living area was added at the same time. All of these improvements were also permitted. Now comes the problem. I inspect the property and lo and behold, the garage has been converted to living area and a kitchen was added in place of the laundry area.

The garage conversion to living area with the kitchen were not permitted and per our county guidlines, these improvements are now illegal. The guidelines further state that once improvements are considered illegal, they are always illegal. In other words, there is no forgiveness clause. This situation was further complicated because the total square footage of the second unit exceeded the permitted ratio relative to the primary structure. Adding the kitchen was the final straw.

In checking with the county, I was told that no permits were issued for the garage conversion. I could only conclude that the present use was not the H&BU because it was not legally permitted. I did learn that subsequent to my inspection, the county visited the homeowner and required them to return the improvements to their permitted status before the property can be sold.

Now if I understood Mike Garretts post, I screwed up. To me I had no choice. Had I not investigated the permit issue completely, Completed the appraisal, the buyer moves in, and then the poop hits the fan. If a fire were to destroy the improvements and the new owner wanted to rebuild the improvements exactly as they were, what's going to happen now? Owner goes to the county for permits and they say no way. The owner says no one told me the improvements were illegal. Beside, the owner paid for two separate living units, not a primary unit with guest quarters. Very likely a difference in value. If you were the owner what would you do now? Sue the realtor for not disclosing. Maybe. Sue the appraiser for not checking to determine the legality of the improvements. More likely in my opinion. I'll take my chances with some unhappy homeowner in order to do my job correctly. Just remember, at least in this case, the simple fact that a permit was not issued for the garage conversion, made the conversion illegal regardless of any other facts. In some cases we have no choice but to be permit police.

I also believe that we are not doing our due dilligence if we don't check for permits. Why would you want to rely on a homeowner who may be trying to hide something from you? Enough said.

 

[Ross (CO)]

A short while ago I did report on 3 and 1/4 year old home, nice, warm, log home on a postage-stamp site location with remainder of 1-acre lot all at 45 deg. slope. A few items were incomplete, like an upper level bath, some grouting of exterior stone siding and no decking planks over the cross-members of one of the two decks. H/O repeatedly saying that he was just going from 30-yr to 15-yr and was not taking any cash out. And, he's the builder of the house ! Quite often I do check our Bldg. Dept's. website for permit history. It shows original permit and several early and intermediary inspections, and then an item or two needing correction, and a needed final soils report from and engineer....and then a final inspection.....that never happened. I was close enough to that office the next day that I stopped by.....and sure enough, I am told that no final inspection and no C.O. was ever issued. I had called the assesssor office the day before to clarify a really screwy address record after these 3+ years. The property is paying taxes. So I mention no recorded C.O. in the addendum part on descrip. of improv. ...and let the other parties decide what to do. I have not been called in the time since. Maybe the client simply asked h/o to get the Final taken care of, now 3 and 1/4 years later, and the re-fi could proceed. Originally permitted, yes.....final inspection ever passing, not recorded yet, and lived in for over 3 years. Would a lender care about that situation ?

 

[Mountain Man]

This does not appear to me to be an "illegal use". Its still a residential property...just done without a building permit. Most likely they will slap the owners hand, make them get a permit and have the property inspected.

That is close to what they would do in my area, except the inspection part. :roll: We don't have code inspectors. You can build what ever you want, how ever you want, as long at the county gets to tax you on it. :roll: :twisted:

 

[Tim The Enchanter]

Well. Interesting thread and variety of answers.
We have plenty of building codes here, and they update them periodically. Especially after a good earthquake. :lol: You always need some kind of permit, at least from the county if not a city or coastal commission or....

Anyway, my answer for 11 years on the issue has almost uniformly been
"No Permit = No Value". And a comment that it was built in a workmanlike manner conforming to the original structure (assuming that's true). This seems to be what all the lenders want.

Even though I've yet to hear of someone in my area being made to remove or even get permitted / inspected, the unpermitted addition or conversion. Well, maybe security bars on windows with no inside releases in bedrooms. But that's a fire safety thing. I suspect the local govs have concluded people living in illegal garage conversions is better than having them living on the streets. And I guess it is, but that's a sad state of affairs. probably off topic too.

 

[Em Tee]

Lee:

After reading the various replies on this topic, I was glad to read yours because that's what my mentor taught me. I didn't see anyone else say that, and was beginning to think maybe it was in error. I keep learning that there's no "right" way when it comes to appraising!

 

[Jonathan Davey]

Hi, although im just a trainee (actually still looking for work, I am a broker as well as a builder). With an addition of that size done without a permit, more often then not the if/when the building inspector finds it, he will be ruthless. Building codes are often left open to interpataion, if the inspector chooses, he will more likely than not, choose an interpataion unfavorable to the homeowner. Further many items are generally overlooked by an inspector with whom you have a repoir. Those that do not have a much more difficult time. I know of many builders who "over build" in order to stay out of "interpetation range". Secondly, aside from drywall being ripped open and so forth, the foundation may have to be checked for depth, vapor barrier and so forth. Thirdly, the inspector can and sometimes does, require the removel of a structure based on setbacks, GLA etc. Its a dangerous game and unlikely to be covered by insurance in the event of disaster/fire etc, and God forbid someone be hurt. Fourth: it will hurt the marketability of a property, more than likely a buyer being represented by an lawyer, will require a permit be obtained prior to closing. It must be addressed in the report. I have read other posts where the appraiser indicates that it is not his/her job to find out about permits. Hope they have their errors and omissions paid. Similar thing just happened in Massachusetts with an illegal apartment. A young college girl was killed in a fire.EVERYBODY involved with that property is running for cover, includeding the mortgage broker/appraiser etc.

 

[Tim The Enchanter]

Yes Jonathon, I'm no builder, but even if the inspectors are not as hard assed as yours sound,
No permit = no value seems a good way to go, for my area anyway.
Lenders seem to agree, so.....