Converted Garage

[notsmith]

HELP... You all won't believe this, BUT I got one of these today. Garage converted into family room with heat. I remembered, (I'm so proud) that I had to call about the permit. Called twp, NO permit!

BUT now WHAT? it isn't legal, and therefore, what?

I include in GLA, say highest and best use is one without the garage converted.????

 

[notsmith]

Final word from Atlanta HOC:

"The appraiser must treat garage conversions as part of GLA provided that it is accessible from the interior of main dwelling in a functional manner; has a permanent/sufficient heat source and in keeping with the design/appeal/quality of construction of the main dwelling.

Conversions that do not meet the above are to be addressed as a separate line item in the sales grid, not in the GLA. Appraiser must address the impact of inferior quality conversions on marketability as well as contributory value, if any."

No permit? Fine. So I'm running with it

Wait: So what are you saying about the NO permit issue? AND zoning is different than then getting a permit, so it is still legal use (well as long as converting your garage is legal), but what about Highest and best and are you just going to mention that no permit was obtained????

 

[Tom Woolford]

Wait: So what are you saying about the NO permit issue? AND zoning is different than then getting a permit, so it is still legal use (well as long as converting your garage is legal), but what about Highest and best and are you just going to mention that no permit was obtained????

FHA seems only concerned that there are no functional issues. it is of construction at least equal to the rest of the building, and that it is acceptable to the market. The first two are up to you, and the third can be addressed with a similar converted comp or one without a garage. Mentioning the permit is probably not necessary: Are you going to talk about the original CO for the building?

 

[notsmith]

I'm getting tired. So, now we are thinking that permits are only for new construction? I'm thinking that isn't true. I know, I've seen this before where they want to know if there are permits, and if there is an addition or conversion to find out if permits were obtained. This could affect the value, because the buyer in that twp could be made to remove all the "improvements" since NO permits were obtained.

 

[Evincere]

 

[J Grant]

HBU is legally permissable use of the entire property. First test is land as vacant . Residential. Yes. Second do improvements contribute more to site than if torn down/vacant. Yes . So, HBU is residential.

At this point, put HBU aside, the property has met the HBU test. One might argue a segment of property (converted garage ) is not equally at HBU as rest of property which might be the case but imo it is confusing to put it in those terms on this thread since some are getting confused about legally permissable HBU and a segment of the property that may be "illegal" in terms of a building code violation. Just because one portion of the property is out of compliance with building code/zoning office does not make teh entire property "illegal".

Appraisers imo should disclose lack of permits, or unknown status of permits. To do otherwise is misleading. Then go on to analze the property...was the garage conversion done in a workmanlike manner, is the garage door and motor still in place, or has the area been converted to an extent it is one and the same as main dwelling...that can answer whether to include it in GLA or not. Local market acceptance, usually bracketed by one or two comps with similar non permitted or unknown permit status are used to determine value with appropriate adjustments.

Appraisers should know the area, drive around and look, are many garages, patios etc converted or added on to original dwellings....its more typical of smaller, older houses but I've seen it in some high $ houses as well.

 

[CANative]

HELP... You all won't believe this, BUT I got one of these today. Garage converted into family room with heat. I remembered, (I'm so proud) that I had to call about the permit. Called twp, NO permit!

BUT now WHAT? it isn't legal, and therefore, what?

I include in GLA, say highest and best use is one without the garage converted.????

What is the difference between the gain in living area and the loss of the garage (including the cost to convert?) HBU

There are use permits and there are building permits. Almost all construction stuff needs a building permit. Not all construction stuff needs a use permit.

 

[CANative]

Another part of solving the problem requires careful reading and understanding of the zoning ordinance specific to this property. Some codes require enclosed parking. So, while adding to the living area is all perfectly fine and legal, doesn't require a use permit and only requires the building permit then the loss of the garage will put the property out of compliance unless they also built a replacement garage.

 

[J Grant]

What is the difference between the gain in living area and the loss of the garage (including the cost to convert?) HBU

That is an answer but imo will start to confuse (some ) people because the HBU is for entire property, aside from HBU for component of property. If the loss of garage impacts value more than the gain in living area, it's a loss of value however you want to assign it...funct obsolescence perhaps. The point is to explain it in a way that is understandable to the users of report and not be misleading, (including presence or absence of permits or status unknown)

Each case will be different depending on a number of factors, such as in post 68 if an area has special zoning around enclosed parking, how professionally the work was done, market acceptance in area do other homes have similar or is this a lone house with no garage .

In smaller houses living space can be cramped so making a garage living area can positively impact value especially if it adds a critically needed bedroom. In larger houses , the loss of garage can be more of adverse impact as it is market expected to have a garage and usually the floorplan has adequate # of bedrooms.. often the garage converted room has awkward access from a laundry room and never feels fully integrated into the rest of the house.

 

[CANative]

"If the loss of garage impacts value more than the gain in living area,"

Then the HBU is to reconvert the new living area back to a garage.

If there needs to be a replacement garage in order to be a legal, conforming use then that's additional HBU analysis.