Illegal vs Legal Non-conforming ?

[ZZGAMAZZ]

Let's discuss "legally permited" but also "legally permissible please:

Subject of the lending assignment is a very recently renovated SFR with a detached studo unit that per interview with the Listing Agent reflects the conversion of a nondescrpt storage unit into a Guest Unit, without permits.

Although I don't think that the distinction is often discussed on the AF, is it agreed that for an improvement to be "legal non-conforming" means that the improvements were built with building permits in the past when the improvements were compatible with zoning standards [which subsequently changed] as well as being built with building permits?

OTHERSIE, for example, because the studio unit was built currently without permits....the property must be defined as "illegal" on 1004 page 1?

I ask because I "think" that the appraisal alternative default to "legal conforming" is "legal non-conforming" although "illegal" would be more appropriate.

Thanks

 

[glenn walker]

Why not replace illegal in your vocabulary with Completed with a building permit or No building Permit found. The word Illegal refers to a crime or a criminal use. Only an Official determines if the existing use is not allowed.

 

[J Grant]

The detached studio can be illegal per zoning but was done with building permits .

The detached studio can be legal per zoning but was not done with building permits .

The detached studio can be illegal per zoning AND not done with building permits .

Ilegal applies to does zoning allow it. Non permitted means it was not constructed with ( and did not get ) a building permit. Sometimes people use slang and apply the wrong labels to describe permitted and illegal.

 

[Tom D]

That one small thing does make a whole property illegal. That one thing may be not permitted, and or not zoned. So don't become a legal expert when we are not legal experts. And wordings can put your foot in a bear trap. I believe fannie doesn't care if it was not permitted, or legal, as long as done with the same quality as the rest of the buildings. And how long has it been there with no L&I knocking on da door.

illegal in the eyes of fannie mae, so what?
If Fannie Mae identifies unpermitted additions or improvements, the appraiser must comment on the quality and appearance of the work and assess its impact on market value.

• Illegal Accessory Units: For one- or two-unit properties with illegal accessory units (e.g., mother-in-law suites), the loan is eligible if the use conforms to the neighborhood, the property is appraised based on current use, the borrower qualifies without counting rental income, and the appraisal demonstrates the improvement is typical for the market using at least three comparable properties.

 

[alebrewer]

I think that, quite often, 'illegal use' is construed as 'illegal'. An illegal use (one that does not conform to current zoning requirements AND has not been grandfathered) is typically an administrative issue that may or may not be resolved via variances, protests, etc. A home with an unpermitted addition may represent a property that exhibits an illegal use (depending on zoning), but that is not the same as a homeowner performing illegal activities (manufacturing heroin for example).

 

[J Grant]

Fannie as far as I know requires at least 2 comps with similar illegal zoning or 2 comps with similar non- permitted status if no building permit was the issue.

 

[Mark K]

Think of grandfathered when you think of legal nonconforming. The improvements were there either prior to zoning or prior to a zoning change which now makes them non-conforming with the current zoning ordinance. Does not sound like your subject is legal non-conforming.

As far as illegal use goes, I have read zoning ordinances that state that improvements constructed without permits are considered an illegal use of the property.

If I was in your shoes, I would call zoning and planning department and ask them what they consider the status a property so built. I would not give them the address, however.

 

[ZZGAMAZZ]

Why not replace illegal in your vocabulary with Completed with a building permit or No building Permit found. The word Illegal refers to a crime or a criminal use. Only an Official determines if the existing use is not allowed.

Logical as always but 1004 page 1 requires a checkbox

Think of grandfathered when you think of legal nonconforming. The improvements were there either prior to zoning or prior to a zoning change which now makes them non-conforming with the current zoning ordinance. Does not sound like your subject is legal non-conforming.

As far as illegal use goes, I have read zoning ordinances that state that improvements constructed without permits are considered an illegal use of the property.

If I was in your shoes, I would call zoning and planning department and ask them what they consider the status a property so built. I would not give them the address, however.

Ergo the crux of the scenario. The unit waa just built without permits, so nothing about a grandfather clause is pertinent. Yes it is legally permissible, and yes for once several properties have similar improvements so market acceptance is easily demonstrated. I am reluctant often to contact the jurisdiction, because municipal nomenclature can differ from appraisal jargon, although it is more of a salient factor than usual, because of its location in a small unincorporated island surrounded by incorporated areas, all with the same city address although properties in the county exist with inferior off site infrastructures.... but without a similar attention to detail regarding conformity to building codes, etc., although one would be hard pressed to quantify that distinction.... although Rebuild or insurability will be questioned. NEVERTHELESS, is it the AF opinion that the Form page 1 Zoning Compliance question pertains to Permissibility?

 

[George Hatch]

The operative term in HBU analysis is "legally permissible", not permitted. The two terms have somewhat different meanings.

 

[ZZGAMAZZ]

The operative term in HBU analysis is "legally permissible", not permitted. The two terms have somewhat different meanings.

I remember nephew glenn's post 2 years ago thar explained the distinction. I was advised by 2 2 jurisdictions that an improvement had to have been legally permitted when built to be "legal non-conforming" at present. The FNMA form page 1 Zoning Compliance offers 4 alternatives. If the permit starus is not a factor, would the Form ever be used if any of the last 3 options are selected?