Enclosed patio-GLA?

[Randolph Kinney]

We generally will not purchase or securitize a mortgage on a property if the improvements do not constitute a legally permissible use of the land.

We do make certain exceptions to this policy, as long as the property is appraised and underwritten in accordance with the special requirements we impose as a condition to agreeing to make the exception:

A. the illegal use in OP and your example would not qualify under "certain exceptions" per Fannie i.e. as an ADU.

B. I didn't write their guideline, they did.

c. Highest & Best Use must be "legally permissible".

d. Enclosed Patio or converted Porch into an additional room sans kit / bath typically does not fall under the use category of ADU. A room is a room.

Permit (where municipal ordinances exist and apply) or No Permit or Cert. of Occupancy = illegal addition/use

Legal, Legal-NC (still legal), or Illegal.

I must be confused Mike and I appreciate your help on parsing the Fannie guideline so that it can be applied.

Do I understand you correctly, as long as whatever square feet addition does not constitute a violation of zoning where it is the use of the land that is in question? Meaning, it is zoned for use as single family residential and that additional square feet with out permit does not change that?

 

[Mike Kennedy]

Whether Municipal Planning, Building and Zoning are separate segments of Municipal Land Use Laws, or all 3 are segments of an all-inclusive Zoning & Use law, if a municipality requires a building permit and/or certificate of occupancy for either a 1 room addition or conversion of an existing patio, deck, porch, or garage into GLA, or a new addition of an accessory dwelling unit or conversion of any of the above into an accessory dwelling unit - either the expansion or conversion complies with Municipal Building and Use Codes or it does not. The OP stated "without a permit" - indicating that the specific Municipality where the subject is located requires one for the conversion cited. It is either legal, LNC, or illegal. Ilegal use applies under Municipal Ordinance and Fannie Requirements. Under Residential Zoning, Residential Use of the Site remains permissible, the Site Improvement represents an Illegal Use.


example: A building permit is required for any work that physically changes or adds structures to your property. There are many exemptions from building permits, so telephone (760) 602-2717, (760) 602-2718 or (760) 602-2721 to inquire as to whether a permit is required before beginning your project or check the Carlsbad Municiple Code, CMC 18.04.105.


Zoning Code
Chapter 21.10 R-1 ONE-FAMILY RESIDENTIAL ZONE*
21.10.010 Intent and purpose.
21.10.020 Permitted uses.
21.10.030 Second dwelling units.

21.10.030 Second dwelling units.
A. The public good is served when there exists in a city housing which is appropriate for the needs of and affordable to all members of the public who reside within that city. Among other needs, there is in Carlsbad a need for affordable rental housing. Therefore, it is in the public interest for the city to promote a range of housing alternatives in order to meet the affordable rental housing needs of its citizens. This section is intended to provide a rental housing alternative by establishing a procedure to create new second dwelling units.
B. The provisions of this section shall apply to single-family zones R-A, R-E and R-1, areas designated by a master plan for single-family detached dwellings in P-C zones and lots within multifamily zones R-2, R-3, R-P, R-T, R-W and RD-M, which are developed with single-family residences.
C. Second dwelling units developed within the coastal zone require a minor coastal development permit issued according to the provisions of Section 21.201.085 and a building permit. Second dwelling units outside of the coastal zone require a building permit.
D. The completed minor coastal development permit and/or building permit application for a second dwelling unit shall include the following information:
1. The name(s) of the owner(s);
2. The address of the dwelling units;
3. The assessor’s parcel number;
4. Building elevations and a general floor plan of the second dwelling unit;
5. A scaled drawing showing the lot dimensions, the location of the primary and second dwelling unit, location of all vehicular parking and the total square footage of both units;
6. Description and location of water and sanitary (sewer) services; and
7. An applicant-signed affidavit of compliance declaring that: (a) the second dwelling unit is not in conflict with existing conditions, covenants and restrictions (CC&Rs) applicable to the title of the subject property; (b) the property owner(s) shall reside in either the main dwelling unit or the second dwelling unit unless a lessee leases both the main dwelling and the second dwelling unit; (c) the property owners agree to rent the second dwelling unit at a monthly rental rate which shall not exceed an income of a low-income household, adjusted for household size, at eighty percent of the San Diego County median income.
E. Second dwelling units shall comply with the following:
1. The second dwelling unit shall either be attached to the main dwelling unit and located within the habitable area of the main dwelling unit or detached from the main dwelling unit and located on the same lot as the main dwelling unit;
2. The second dwelling unit shall have a separate entrance;
3. The second dwelling unit must meet the setback, lot coverage and other development standards applicable to the zone which are not addressed within this subsection. In the coastal zone, any housing development processed pursuant to this chapter shall be consistent with all certified local coastal program provisions, with the exception of density, or as otherwise specified within this subsection;
4. Attached second dwelling units shall conform to the height limits applicable to the zone and detached second dwelling units shall be limited to one story, except that second dwelling units constructed above detached garages shall be permitted and shall conform to the height limits applicable to the zone;
5. Garage conversions are prohibited unless replacement off-street garage parking is provided concurrently and in compliance with the requirements of Chapter 21.44;
6. Second dwelling units shall not be permitted on a lot or parcel having guest or accessory living quarters, or a residential care facility. Existing guest or accessory living quarters may be converted into a second dwelling unit provided that all zoning and structural requirements are met;
7. One additional paved off-street (covered or uncovered) parking space shall be provided for the second dwelling unit and shall comply with the requirements of Chapter 21.44. The additional parking space may be provided through tandem parking (provided that the garage is set back a minimum of twenty feet from the property line) or in the front yard setback;
8. Adequate water and sewer capacity and facilities for the second dwelling unit must be available or made available;
9. All necessary public facilities and services must be available or made available;
10. The second unit may be rented and shall not be sold separately from the main dwelling unit unless the lot on which such units are located is subdivided. The lot upon which the second unit is located shall not be subdivided unless each lot which would be created by the subdivision will comply with the requirements of this title and Title 20; and further provided, that all structures existing on each proposed lot will comply with the development standards applicable to each lot;
11. The total area of floor space for an attached or detached second unit shall not exceed six hundred forty square feet;
12. The second dwelling unit shall be architecturally compatible with the main dwelling unit, in terms of appearance, materials and finished quality;
13. A second dwelling unit which conforms to the requirements of this section shall be allowed to exceed the permitted density for the lot upon which it is located and shall be deemed to be a residential use consistent with the density requirements of the general plan and the zoning designation for the lot;
14. The size of the lot upon which a second dwelling unit is proposed shall not be less than the minimum lot size required of the zone. (Ord. NS-718 § 7 (part), 2004)

http://www.bpcnet.com/codes/carlsbad/_DATA/TITLE18/Chapter_18_04_BUILDING_CODE.html#18 Building Code

18.04.310 Violations.
Any person or corporation who violates any of the provisions of this code or this chapter is guilty of an infraction, except for the fourth and each additional violation of a provision within one year, which shall be a misdemeanor. Penalties for a violation of this chapter shall be as designated in section 1.08.010 of this code. (Ord. NS-333 § 2 (part), 1995)

 

[Randolph Kinney]

Ilegal use applies under Municipal Ordinance and Fannie Requirements. Under Residential Zoning, Residential Use of the Site remains permissible, the Site Improvement represents an Illegal Use.

Lets see if I understand. I have a house. The site is zoned for a house. I don't have a permit for the room addition. The room addition that was made could be done with a permit, but it wasn't. Therefore the site is still legal use but the improvements are not? And that makes the whole (site + improvements) illegal use for zoning? But as long as I have an illegal kitchen to go along with the illegal addition, that is Okay for Fannie? Fannie will reject the property if the illegal addition does not have an illegal kitchen?

 

[Mike Kennedy]

I didn't write it........they did. Fannie will reject the property if the illegal addition does not have an illegal kitchen?

and sleeping quarters and a bathroom i.e. ADU.

Their in-house UW policy does not change the fact that, in municipalities where zoning and building ordinances exist and require compliance under municipal Law...... unpermitted uses, including ADU, are illegal uses.

 

[CANative]

Just because someone didn't get the stinking permit to build something doesn't necessarily mean that it is an illegal use of the land.

I'm not sure if you discern the difference Mike. I've been reading your posts for at least a year and you're always quick to jump to the conclusion that lack of permits is evidence of illegal use.

 

[Randolph Kinney]

I didn't write it........they did. Fannie will reject the property if the illegal addition does not have an illegal kitchen?

and sleeping quarters and a bathroom i.e. ADU.

Their in-house UW policy does not change the fact that, in municipalities where zoning and building ordinances exist and require compliance under municipal Law...... unpermitted uses, including ADU, are illegal uses.

Mike,

I understand your point that you did not write the Fannie selling guide and their policy as stated for illegal ADU as it applies to SFR and duplexes. You will note that it also says something about the income produced from the ADU. Could that be the illegal use according to zoning, operating a home where income is derived by renting out the unit(s) in a zone that prohibits such use? In other words, the owner is not using it as residential in nature but a commercial enterprise?

However, you are setting yourself up to be the official interpreter of that policy when you declare that it can only apply to additions with kitchens and not any other addition.

Why do you suppose that Fannie wants to see at least 3 similar properties that have the same "illegal" aspect to them that have sold in that neighborhood?

I think Greg Boyd is also trying to make a distinction of illegal use of the land versus something that conforms to zoning but does not have a permit for some aspect of the improvements but otherwise conforms to the land use, the neighborhood and market preference.

The whole isssue is appraiser liability when you "bless" an addition that does not have a permit. What is the JA history on enforcement? Do they issue retro permits? Have they made anyone tear down the addition? Are there like properties that are bought and sold freely in the market?

My experience is that most lenders will lend on properties that have additions with out permits provided you conform to their underwriting standards on that.

 

[Lobo Fan]

In my area it is often difficult to verify permit status. Albuquerque only keeps records back to 1985, Rio Rancho to 1990, and Santa Fe to 1991. Some counties only file by issuance date, so you must know the month and year of issuance. Sometime I don't even know which decade.

It is my understanding that al long as it is still being used within legal zoning and complies with setbacks, etc. that the addition is a legal use, eve if it was not permitted or inspected.

 

[PropertyEconomics]

The USE may be legal and the addition ILLEGAL. It depends upon jurisdictions. Everyone should be very cautious about this.

Non permitted and Not permitted are not the same thing.

 

[Lobo Fan]

This might be why one of my lenders gets such heartburn over non-permitted additions. Checking for things such as set backs, lot fill, etc. are well outside the scope of an appraisal.

 

[PropertyEconomics]

This might be why one of my lenders gets such heartburn over non-permitted additions. Checking for things such as set backs, lot fill, etc. are well outside the scope of an appraisal.

Lobo .. I disagree... checking for those things are all part of the highest and best use of an appraisal assignment. I know someone told you its outside the scope .. but in my opinion it isnt. BUT ... that being said .. if the permits are not available for search ... I see no way they could be determined to not have been permitted either. Its a slippery slope .. but they cannot merely be ignored.