Illegal vs Legal Non-conforming ?

[jay trotta]

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?

GH is correct per HBU- "legally permissible", but you are also correct as to when the dwelling was built and its legally permitted use at that time. Therefore, the question refers to a back in time date of original construction and zoning compliance at the time.

While zoning standards (per municipality) change over time, the need for compliance would relate the building date (zoning compliance as of that date) of any improvements. Additions/Alterations are subject to zoning at the period in which they were built. You may also find Health & Safety standards may be applicable to the addition/alteration as of date.

 

[ZZGAMAZZ]

GH is correct per HBU- "legally permissible", but you are also correct as to when the dwelling was built and its legally permitted use at that time. Therefore, the question refers to a back in time date of original construction and zoning compliance at the time.

While zoning standards (per municipality) change over time, the need for compliance would relate the building date (zoning compliance as of that date) of any improvements. Additions/Alterations are subject to zoning at the period in which they were built. You may also find Health & Safety standards may be applicable to the addition/alteration as of date.

=Well in all sincerity i sure learned a lot today and appreciate the AF... and need to ask what IMO is a logical question: Does the same rationale apply to the "legally permissible" aspect of the HBU analysis? I presume so but if so, why doesn't the 1004 page 1 zoning compliance checkbox indicate "legally permissible" rather than "legal?" Also wondering whether the industry forms should include a checkbox for "legally permitted" as well as "legal" if "legal" pertains to legallyay permissible:? Although form construction is a different animal to fry. But thanks all..as I try courageously to avoid asking whether I am the ONLY appraiser of 10,000 who fails to understand basic issues like this...although the sage advice that one learns throughout life is "never ask a beautiful woman a question about her feelings for you, unless you are prepared for any answer." And if were only...things woulda been different...

 

[glenn walker]

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

3.6 will solve the dilemma.

 

[George Hatch]

If a jurisdiction is not enforcing their requirements then - from the market's perspective - they are effectively allowing the non-compliance to continue. Buyers and sellers will react according to their expectations. OTOH the lenders will take a different view of the situation and so will the insurers. And it will become an issue with the jurisdiction if the question of rebuilding comes up.

That's how a property can have one value among the buyers/sellers but a different value to the lenders.

MV (to the market participants)​

vs​

MV+ (to the lenders)​

 

[gregb]

For the BREA, an appraiser must turn down an assignment if there is a difference between MV to the lenders vs MV to the market participants. Received a letter back in the day from BREA because I complied with a lender's assignment condition of "no permit, no value" relating to a garage conversion.

 

[George Hatch]

After a certain point it becomes an unreasonable assignment condition.

"Value for house on 5ac even though the subject property consists of 40ac" is another example. Okay to answer as an additional question but the outcome might not represent the MV for the property being appraised or encumbered.

We normally identify the subject as consisting of the whole, not as a partial:
"MV of the property at 123 main street is $zzz,zzz as of 07/22/2026."

 

[glenn walker]

Normally one of the tests is If a Municipality's building department won't issue a rebuild letter on a non conforming property then it's going to be deemed to no longer be legally permitted for traditional conforming lending purposes.

 

[ZZGAMAZZ]

If a jurisdiction is not enforcing their requirements then - from the market's perspective - they are effectively allowing the non-compliance to continue. Buyers and sellers will react according to their expectations. OTOH the lenders will take a different view of the situation and so will the insurers. And it will become an issue with the jurisdiction if the question of rebuilding comes up.

That's how a property can have one value among the buyers/sellers but a different value to the lenders.

MV (to the market participants)​

vs​

MV+ (to​

For the BREA, an appraiser must turn down an assignment if there is a difference between MV to the lenders vs MV to the market participants. Received a letter back in the day from BREA because I complied with a lender's assignment condition of "no permit, no value" relating to a garage conversion.

Woa!!! Very interesting. What a great cautionary message. Did the borrower or selling agent complain to BREA? Or was the client condition described in the report.

 

[ZZGAMAZZ]

Normally one of the tests is If a Municipality's building department won't issue a rebuild letter on a non conforming property then it's going to be deemed to no longer be legally permitted for traditional conforming lending purposes.

But in that scenario, the page 1 Zoning Compliance would be marked as Legal Conforming," correct?

 

[gregb]

Woa!!! Very interesting. What a great cautionary message. Did the borrower or selling agent complain to BREA? Or was the client condition described in the report.

My brother submitted the report as a work sample to BREA when I was supervising him.