is it the appraiser's job to pull permits

[kakarotto]

i was just told off by a borrower for telling him it's not my job to go to city hall and pull permits. PLUS, if you bought the house in 2009 wouldn't you keep copies of building permits? What kind of idiot does that?

 

[Tim Hicks (Texas)]

Not my job. How would you know when and where to look for a permit on a 40 year old house with an addition that nobody knows when it was done? Many cities here didn't require permits until the 1990's. It is a needle in a hay stack around here.

 

[NORTON]

i was just told off by a borrower for telling him it's not my job to go to city hall and pull permits. PLUS, if you bought the house in 2009 wouldn't you keep copies of building permits? What kind of idiot does that?

was the borrower your client? how did the conversation arise?

 

[Mike Kennedy]

Subject: USPAP AO-28 / Due Diligence is Required
5. A real property appraiser accepted an assignment to appraise a three-unit residential property. The intended use of the appraisal was for mortgage financing. The client requested that the appraiser not verify the legal status (e.g., compliance with zoning, building codes, use permits) of the three units with municipal officials.
The appraiser withdrew from the assignment because she concluded that the client’s assignment condition limited the scope of work to such a degree that assignment results are not credible in the context of the intended use. The use of an extraordinary assumption about the legal use of the property would not produce credible assignment results in the context of the mortgage financing use.
The above “Case Study” was Issued as an Opinion that the ASB clearly considers municipal verification STANDARD and REQUIRED APPRAISAL PRACTICE (in markets where building & zoning ordinances exist and the information is readily available during the "normal course of business") on Mortgage Financing Appraisal Assignments.

[FONT=&quot]i.e. those who subscribe to the notion that such verification is NOT required and THAT is "standard" - are dead wrong. [/FONT]

 

[Mike Kennedy]

Concurrent thread, suggest reading ALL of the Posts.

http://appraisersforum.com/showthread.php?p=2110747#post2110747

 

[Tim Hicks (Texas)]

"Normal course of business."

 

[Scott R Marshall]

I have been dealing with this quite a bit lately and as a result have become somewhat knowledgeable of how local jurisdictions handle permits.

#1 on the list is the ease in which it can, at least on a cursory level, be verified. Typically all it takes is a phone call and I have my answer. Maybe in some markets it is more difficult but so far my experience locally is it is just as easy as calling the assessors office. There are appraisers who have the notion that this is some kind of long process but have never stuck their foot in the water (or the last time they did was sometime in the 1990's) to see how difficult or easy it really is.

#2 on the list is how every local jurisdiction handles it. State law is permits are only required to be kept on file for 10 years. So far, while most jurisdictions will quote state law, they do keep records for longer than that. Currently the furthest back that I have found in my local market area is 1986.

#3 is specific to my state as we are non-disclosure. Things like data cards for a property are not readily available. I can make requests to the county attorney but this is typically a 5 to 20 business day process from the time they receive the request in writing. In addition, there are additional fees associated with getting these documents. So attempting to verify GLA, age, etc is not something which can be done in the normal course of business. In states where full disclosure is allowed there may be no reasonable excuse.

#4 is also specific to my market. While local jurisdictions can tell me if permits have been issued, what they were issued for is very generic. At times it will be a comment like "a 1 room addition". Sometimes I will be given "an addition of approximately 500 sqaure feet". While I can make some educated guesses as to whether the permit is for what I am calling for, the non-disclosure status of law prohibits me from knowing for certain.

My biggest issue with the whole permit thing is once I have been asked to verify a permit, am I not responsible for verifying all permits? What if the elctrical has been updated or the hot water heater/furnace replaced? What if the windows were replaced or the entirety of the kitchen redone? I can tell you in most local jurisdictions in my market, this requires a permit. I just wonder if I am opening a can of liability beans.

 

[knadave]

Whats the fee. For $200, they are lucky you even inspected the home. Bang it out and move on.

 

[Mike Garrett RAA]

Subject: USPAP AO-28 / Due Diligence is Required
5. A real property appraiser accepted an assignment to appraise a three-unit residential property. The intended use of the appraisal was for mortgage financing. The client requested that the appraiser not verify the legal status (e.g., compliance with zoning, building codes, use permits) of the three units with municipal officials.
The appraiser withdrew from the assignment because she concluded that the client’s assignment condition limited the scope of work to such a degree that assignment results are not credible in the context of the intended use. The use of an extraordinary assumption about the legal use of the property would not produce credible assignment results in the context of the mortgage financing use.
The above “Case Study” was Issued as an Opinion that the ASB clearly considers municipal verification STANDARD and REQUIRED APPRAISAL PRACTICE (in markets where building & zoning ordinances exist and the information is readily available during the "normal course of business") on Mortgage Financing Appraisal Assignments.

[FONT=&quot]i.e. those who subscribe to the notion that such verification is NOT required and THAT is "standard" - are dead wrong. [/FONT]

I disagree! First off, as we all know, Advisory Opinions are not part of the Uniform Standards. Secondly, the issue in the advisory opinion is about assignment conditions so limiting the Scope of Work that the results would not be credible and the report could be mis-leading.

Should an appraiser check for permits? It depends. Is it necessary for credible results? Maybe. When a client imposed condition such as cited above raises a red flag then the appraiser should probably withdraw from the assignment.

Do most appraisers check for permits on every assignment? I doubt it. Is it even necessary to do? I doubt it. Now, if you see, as an example, a newer addition on a residence, should the appraiser inquire if there was a permit pulled for the addition? I would. If I had doubts can I check for permits? Yes I can and often do.

So, what if I find the addition was built without the benefit of a permit? Should I give it no value? Should I require it be torn down? Should I require the home owner obtain a permit? Or, do I disclose what I know and let the underwriter sort it out? Inquiring minds want to know.

One final thought....does having a permit indicate the work was done properly? It's one thing to have a permit IN MY MARKET and it's another if there was no final inspection. We see quite a bit of that too.

 

[Elliott]

Just curious, what does the BP tell you?
They are typically a local way to raise revenue
and either the builder or building dept lie about
the cost of construction.