Are we required to obtain permits?

[CANative]

I give the home maximum value

That's what those brokers from the mall kiosks used to say on their order forms.

 

[normando]

In some areas, bathroom additions require sewer lateral costs which can be in thousands. Thus, if done correctly, there should be less problems in future. And I do notice that kitchen remodeling done with or without permits generally not much of difference as long as done by knowledgeable contractor. However if done with permits, usually well done.

 

[hastalavista]

This thread is becoming a bit funny.

I've seen forumites (myself included) come down hard on appraisers for not doing enough.
It is rare that I see appraiser "A" argue with appraiser "B" that "B" is doing more than "A" would, and therefore shouldn't do it.
:laugh:

I stated my standard: If I think it is necessary for credible results or required by my engagement-agreement, I'll do it (or, cancel the assignment, or get it modified if that is appropriate).
If it isn't necessary for credible results or not required, then I don't do it.

Is there an inconsistency there? Not for an appraiser!

 

[Mike Kennedy]

"Mike, are you suggesting that each and every improvement upon the site that might be subject to the permit process is an item to be researched and verified by the appraiser as having been put in place via the permit process?"

Yes. Either a BP is, or is not required by a Municipality for site improvements.

"And, further, that the appraiser is to verify that what is in place--if put in place via a permit--conforms with the permit?" No.

Verify whether improvements which are "in place" conformed, as of the EDA, with a C.C. or C.O., Yes.

It is the Municipality's legal responsibility to determine whether or not what was built conforms with the description in the BP and complies with municipal requirements for legal construction, occupancy, and use. NOT the Appraiser's.

Residential Dwelling and additional amenity permits (in municipalities which have zoning and building ordinances) establish the legal right to erect, construct, renovate, add to, convert, or demolish site improvements in accordance with required filed plans and specs which comply with Municipal Requirements (ordinances, regulations et al).

Permits typically have a "shelf-life" i.e. a time frame under which the planned improvement construction (of any type noted above) must take place. Extensions or New Permits are typically required should additional time or changes to originally proposed plans be required. They too have shelf-lives.

Municipalities typically require either Certificates of Completion, Compliance, or Occupancy which supercede, cancel out and replace a "building permit".

The fact that a building (or demolition) permit was issued does not make an now-completed existing improvement, or removal of same, a Legal Use. A Municipal C.C. or C. O. does.

Should improvements be built which vary in characteristics from the filed plans to which the BP correspond, the original BP is either cancelled and a new BP issued or the original BP is revised by the Municipality based on newly filed plans of what actually was built, a new BP Fee is typically required (and possibly a fine on long-existing alternative improvements) subject to municipal inspection and issuance of a C.C. / C.O.

In the case of expired permits lacking requisite C.C. or C.O., the improvement(s) built as described in the BP become illegal uses. Typically Municipalities cite fines, civil infractions of local Law(s), and a process to "cure" the illegal use(s) which must be adhered to in order to make the Use Legal (under C.C. or C.O.)

Legally Permissible Use of a Site "As-Vacant" includes Zoning and, when a vacant site is improved, (either actually or proposed under H.C.) the physical improvements and occupancy "As-Improved" as of a specific Effective Date of appraisal.

Such is the case re the OP. Either the Site, "As-improved" represented a Legal, LNC, or Illegal Use as of the Effective Date.

Was the Appraiser required to inquire and get municipal confirmation of whether, and/or what BPs, and C.C.'s or C.O.'s were on file for the subject site same - in THAT Municipality - under the SOW for that Assignment? Yes, IF the information was readily available during the normal course of business.

IF a BP and CC./C.O. was required by the Municipality, and the info was not immediately available, a full explanation of the Municipal Process should have been included in the Report, and utilization of either an EA or HC with a conditional Value Opinion subject to Municipal Confirmation by the Lender or Property Owner would have been appropriate.

The appraisal report should have also stipulated that information provided by the Municipality was necessarily assumed reliable and, should the Client have concern in that regard, direct contact with the Municipality was recommended.

* additional note of import to Lenders and Property Owners: illegal improvements or uses typically also negatively impact property insurability and can, in some states, nullify insurance policies.

 

[Webbed Feet]

When a home is remodeled with permits, I give the home maximum value since they did everything right even if workmanship is average. Once in a while, I see finished basement done without permits but beautifully done and I give it significant value.

Got your definition and source for those handy?

m2:

Personally, the only "value" I give is the one defined for the assignment.

 

[normando]

The homes I look at usually over 50 years. It's not often I see a home with permits documented since originally built. If it's documented, homeowner can have a case of grandfathering in the in-law if built similar to original house. In any case, once you know the history of subject, you're in better position to appraise the property. It's amaziing many agents and even owners do not know legaity of rooms. They think it's there when they bought it and accept it as it is. I have problem with comp data when appraisers included unpermitted area into total gross area.

 

[Lee Lansford]

additional note[/B] of import to Lenders and Property Owners: illegal improvements or uses typically also negatively impact property insurability and can, in some states, nullify insurance policies.
[/COLOR][/COLOR]

Now the appraiser is to give legal opinions?

 

[Lee Lansford]

Mike, if the market (i.e., buyers & sellers, governmental agencies which oversee housing) is "blind" (i.e., no enforcement, buyers and sellers pay no heed, etc.) to whether or not (for example) the finish in the subject's basement was via the permit process or not--and you cannot find a permit for the finish--may I ask what your approach would be to offering an opinion of Market Value for the subject?

 

[Fnbpos]

Mike, if the market (i.e., buyers & sellers, governmental agencies which oversee housing) is "blind" (i.e., no enforcement, buyers and sellers pay no heed, etc.) to whether or not (for example) the finish in the subject's basement was via the permit process or not--and you cannot find a permit for the finish--may I ask what your approach would be to offering an opinion of Market Value for the subject?

I'd like to know that approach also.....and about this "maximum value" and "significant value"...are you guys serious ?

Some of you ...and you know who you are....are over-analyzing to the point of where your analyses do NOT reflect the market anymore.

Its MARKET value....hello ??? anyone ?

PS call into the attorneys re: lawsuits; no callback yet.

 

[Mike Kennedy]

Now the appraiser is to give legal opinions?

Not at all. That task rests on the shoulders of Municipalities which have Building and Zoning Ordinances. The add-on is simply additional info supporting why Appraisers are tasked with identifying legally permissible improvements as of an Effective Date of Appraisal from a Client, a Client Lender and Intended User perspective in addition to HABU predicated on Legally Permissible use for a Site "as-improved".

The add-on was posted for clarification as this site is visited by consumers, lenders, realtors et al who are usually not Licensed Appraisers.