Health & Safety Issues

[Overimprovement]

Basic question--Upon what guidelines or criteria are we to base our opinion that such and such is or is not a health and/or safety issue? Obviously FHA for instance has fairly clear guidelines. Fannie less so, and in-house or port loans perhaps none at all (from the client anyway).

Is it based solely on:
1) Local building codes,
2) National codes,
3) Our personal opinion--"I wouldn't want my family living there unless it got fixed",
4) What we think most of our peers would say, or
5) Something else?

Thoughts?

This is just a general inquiry, would appreciate if no specifics are mentioned. Just looking for what we think our guidelines should be...

 

[J Grant]

Could be all of the above but imo, what any reasonable/well informed adult would consider a health and safety issue

 

[bnmappraisal]

IMO, it's your #1 and #4

1) Local building codes,

4) What we think most of our peers would say, or

I think #1 trumps all others, but then I would think "would my peer consider this an issue"

I would also think "what would Avg Joe homebuyer" consider, safe/sound/sanitary

 

[Restrain]

Use the 'common sense' approach. An electrical breaker box without the protective cover, stairs with no railing, etc. Lack of something from a current building code that wasn't required when it was built-Nope.

 

[ICT RE]

IMO it should be from the perspective of the typical market participant of average intelligence/background.

Anything more and you are bleeding your appraisal career into other arguably dissimilar professions and skill sets. Areas where one should be real careful giving the impression that you have expertise and competency. Are you a market analyst or a general contractor, or what about a code inspector?

Make a statement in your report that gives any impression that the property was also considered for compliance with code, and you’re opening a one ton bag of worms from a liability perspective. The concept of core competencies comes immediately to mind.

FHA/USDA and VA considerations notwithstanding.

 

[Terrel L. Shields]

Identify the issues and assume them away. The fact FNMA and FHA etc. requires you call for repairs isn't a USPAP problem. For lenders and private parties flag them. It is not you job to fix them, call for repairs, etc., unless the lender so requests. Not all loans go to secondary market...

 

[Tim The Enchanter]

IMO it should be from the perspective of the typical market participant of average intelligence/background.

That's setting the bar real low.

 

[Mark K]

That's setting the bar real low.

I'm not opposed to a low bar in this situation. There are too many appraisers masquerading as wanna-be code compliance/safety inspectors.

 

[Overimprovement]

Identify the issues and assume them away. For lenders and private parties flag them. It is not you job to fix them, call for repairs, etc., unless the lender so requests.

Ahh..but therein lies the rub. These lenders are too cowardly to go to a borrower directly and say, 'we need you to fix X before we loan you money'. No, they want to hide behind the appraiser. They want to be able to say, "The appraiser said this is a health and safety issue so we have no choice but to have you repair it".

I have no problem doing re-inspections, but it just seems strange to me that something seemingly so important (I mean its health and safety stuff, right?) wouldn't have at least some guidelines out there.

Most areas I cover have no building codes, so that is out. What would typical person and/or my peers think? We all could give 10 examples of items that would likely result in a 50/50 difference of opinion. Have certainly seen more than a couple just in the last year here!

But I do appreciate the responses so far, because I now crafting a sort of boilerplate response that references the lack of code, typical owner response, and reaction of my peers. As the various recurring issues I seem to deal with on this question re-surface, I will use that boilerplate regardless of whether I call it out or not.

 

[J Grant]

Seems pretty simple to define health and safety...is a condition in house present that would present a danger (frayed wiring, a stairs with no railing etc, visible mold etc...Other than that or specific FHA issues, no we are not code inspectors. If construction or wiring looks very funky/ homemade we can call for an inspection. I agree with Overimprovement, the lender does not want to "upset" the borrower so instead of sending a property inspector out they stick us with the health and safety cop role on top of valuation ( unpaid of course)

Does anyone ask a home inspector since they are out at the property, to also perform a valuation? Never seen it.

No worries, we soon wont be inspecting, if hybrids come to pass to for lending origination we can not see any problems if we weren't even there.