Complicated ADU Zoning Situation - Opinions/Help needed

[jshakes92]

Hello!
Long story but I'm going to bullet point this to make it readable:

- We are trying to purchase what we thought was a legal triplex. Single family house, detached garage converted to unit, and an above garage unit.
- Single family house and both units built in late 40s/early 50s.
- Offer was accepted
- Appraiser came out and refused to appraise the property saying that it wasn't legal per zoning. Would not give us any details as to what was needed in order to make it legal and get an appraisal.
- Zoning only allows for 1 ADU unless permitted correctly back in the day, can be grandfathered in as a triplex if so.
- Permits aren't clear, we are proceeding as if it is illegal. Will fight this battle after buying the home.
- I spoke to the city and they recommended the seller removes the kitchen from the downstairs unit and we treat it as 1 unit, an upstairs and a downstairs. He also said if I did nothing and scheduled a different appraiser then there's a good chance he would appraise it anyway.

Just wanted to get your thoughts on the situation and see if you had any recommendations. We really want to buy this home and I need to make sure that the second appraisal goes smoothly.

Thanks in advance!

 

[Terrel L. Shields]

It is not an appraisers job to determine the legality of a multi-family or ADU - I would call it Single Family with 2 rentals. So the ADU is what it is. However I don't think FHA nor Fannie Freddy will fund a SFR with more than one ADU. I don't do either anymore so the rules may have changed.

Such assignments are a true PITB and so the appraiser may have simply not wanted to proceed.

PS- I don't live in Florida but such items here are a real dog on the market especially if the ADUs cannot be rented (i.e.- they are only to be occupied by a family member.)

 

[Mark K]

It is not an appraisers job to determine the legality of a multi-family or ADU...

Agree that the appraiser is not in a position to make the determination, i.e., legality, however, if the appraiser suspects that it property does not conform to the zoning ordinance I say that its his responsibility to state such. If he decides to walk at that point, that's his decision.

- Permits aren't clear, we are proceeding as if it is illegal. Will fight this battle after buying the home.

Personally, that's a battle I'd fight before buying the property. Some areas are somewhat flexible on these issues. Others are run by simple little, power hungry, zoning Nazis who believe that their sole purpose in life is to screw with owners...because they can. I'd talk to a real estate lawyer before buying if you want to continue the current use.

 

[glenn walker]

Also consult with Fire & liability Insurance , some will not cover these

 

[Tom D]

the happy to buy buyer now, becomes the angry owner if the problem can't be fixed. i wouldn't do the appraisal for that reason, can't defend yourself for not getting it right. buyer wanting it so much isn't a defense in court.

 

[Sadie]

The conundrum for the appraiser is figuring out the marketability of the property. How many people want to buy a property that most likely does not meet zoning and may not be up to code? Another appraiser may appraise the property but make it subject to removing one of the kitchens. If you decide to rent all three units without knowing if all are legal uses, you run the risk of renting an illegal unit and whatever penalties that entails. What Mark K said. Fix it prior to purchasing it.

 

[ZZGAMAZZ]

The conundrum for the appraiser is figuring out the marketability of the property. How many people want to buy a property that most likely does not meet zoning and may not be up to code? Another appraiser may appraise the property but make it subject to removing one of the kitchens. If you decide to rent all three units without knowing if all are legal uses, you run the risk of renting an illegal unit and whatever penalties that entails. What Mark K said. Fix it prior to purchasing it.

I recently appraised a 2-unit residential duplex that was "legal non-conforming" in an incorporated commercial zone that did not permit rebuild. Fortunately I was able to find a few similar properties with the same zoning to be reported as comparables. It also included a non-permitted bedroom addition to one of the units that warranted a C2C. Advice from the AF peer community that I hopefully interpreted correctly was the basis of the non-HBU status. Two values were required for the marital dissolution matter.

Hmmmmm...new slogan for the USPAP Scope of Work rule, p14: "We're Here. We're Peer......."

 

[Terrel L. Shields]

Bottom line - we have a lot of people who will modify their property with "improvements" that are actually detrimental to the property's HBU, and presents the appraiser will an insanely difficult task when if they simply left the property be and buy a bonafide rental - and be a lot easier on everyone. And much easier to appraise accurately. Personally to me a DUplex is a two unit building that is basically a mirror image halves and an adjoining wall. A TRIplex is a two unit rental that has two end members sandwiching a third between and basically are the same size each.

A house with a converted garage is simply that- SFR with ADU. And a house with a converted garage down and a FROG (finished room over garage) as a 3rd unit is simply a SFR with TWO ADUs and as such isn't going to get secondary marketing financing.