Garage conversion

[Michael Willis]

People have done garage conversions in the areas I service, they may get permits to do the work but it almost never gets recorded as actual GLA. Parking is so scarce in some parts of San Francisco that garage parking is arguably worth more than a converted garage. There is a market in San Francisco for people who don't use their own garage to rent it out weekly/monthly to people for various reasons. In my personal experience I don't make any contributory adjustments for a GC since there isn't enough evidence to warrant any.

 

[Tim Hicks (Texas)]

I second the duck*. But by all means do a little due diligence on this if for no other reason than to increase your understanding of that market.

*Seems to me the duck used to be philosophically opposed to garage conversions being included in the GLA. Maybe I'm thinking of sunrooms.

I always separate them. Apples to apples. If I have a garage conversion property, I will find 1-2 garage conversion sales.

 

[Restrain]

1. You do not know the garage was not permitted, from your own post, as you don't know when it was enclosed. Could have been done before records retained. Therefore you have to assume that the permit was issued.

2. What code requires now is not relevant to a dated enclosure as the enclosure would have been done per earlier code requirements.

3. If the enclosure is of the same quality as the residence, it is GLA. If not, it is valued separately.

4. Congratulations. You now have opened yourself to liability, revealing confidential information to the building department.

 

[J Grant]

1. You do not know the garage was not permitted, from your own post, as you don't know when it was enclosed. Could have been done before records retained. Therefore you have to assume that the permit was issued.

Why does an appraiser "have" to assume a permit was issued, when they have no way to find out? (and, if, after all these years, the garage conversion is not on tax records GLA, the evidence is more that it was never indeed permitted)

2. What code requires now is not relevant to a dated enclosure as the enclosure would have been done per earlier code requirements.

The enclosure might have been done prior to a code, however, if it is not up to current codes, it is not. Just report that. Let lender make the decision about whether to lend, but they should know condition of property and whether it conforms to others in the area or present safety and building standards.

3. If the enclosure is of the same quality as the residence, it is GLA. If not, it is valued separately.

Not sure about that...certainly it is square footage, whether or not appraiser includes it in GLA is another matter...the appraiser can, but to say it has to be done that way? Whether or not it is included in GLA, appraiser should disclose and describe the living area and how it is used, and if market is returning value, the value can be on report whether or not the area is part of GLA

4. Congratulations. You now have opened yourself to liability, revealing confidential information to the building department.

Imo, non permitted or gray area additions cause potential liability for appraisers no matter how they handle it. I suppose one way to avoid liability, is if appraiser feels a need to call/question building department, to get written permission from homeowner to do so.

If an owner is evasive or refuses to give permission to an appraiser to call building dept, that alone is a clue it is likely not permitted.

 

[Terrel L. Shields]

non permitted or gray area additions cause potential liability for appraisers no matter how they handle it. I suppose one way to avoid liability, is if appraiser feels a need to call/question building department, to get written permission from homeowner to do so.

If an owner is evasive or refuses to give permission to an appraiser to call building dept, that alone is a clue it is likely not permitted.

JG, sounds like the problem is the city records being so old that determining if its Certificate of occupancy was buried somewhere in a box in a back room... I would EA that issue. I see no liability for the appraiser in evoking the "available in the normal course of business" - It certainly isn't what your peers do to go for weeks trying to find a COO and certainly appears to have already done their due diligence. Document and go on. The real issue is value and whether it is GLA. I suggest it is not GLA unless you cannot otherwise distingush it from the rest of the dwelling and very likely you can...

 

[Mike Kennedy]

So. Just got a call from the city, and they advised another parking situation would have to be setup(ie carport, another garage, fenced area) to be considered legal. He then advised me they could have applied for a variance. WTH, why is everything so gray!

Which City?

 

[Tim Hicks (Texas)]

3. If the enclosure is of the same quality as the residence, it is GLA. If not, it is valued separately.

That is a very gray area for many appraisers. There is too much subjective decision making by appraisers regarding "same quality." Now, if they covered the garage entry with the same brick, leveled the floor, removed all evidence of the previous garage and the entry to the conversion is not through some ancillary room like a laundry room, then maybe it could be considered equal, but that it rarely the case. It happens so rarely, that the majority of the time it is best to just separate it and adjust what the market supports for such an improvement. Plus, then there is the loss of garage utility.

Most times, the floor is not level, the garage doors are still present on the exterior or just covered with plywood, there is a storage area for the garage doors, or the interior has a faux wall where the garage doors are still present.

 

[TxArmadillo]

4. Congratulations. You now have opened yourself to liability, revealing confidential information to the building department.

Nope. Go back and re-read post #8.

 

[J Grant]

Terrell, even if the original C of O or permit is no longer on file because of old record keeping, if it WAS filed and approved 30 years ago, wouldn't the amount of living area of that converted space be showing up as square footage in the public records? It would be recorded as sf under air or improved sf (however county classifies it), instead of showing as a garage.

 

[Deleted member 128537]

You are not a building inspector. If the GC is marketable appraise it. If the county doesn't know there is a permit then how the heck can you know. You've done your due diligence. Just disclose what it is and get on with it, and don't over think it.