Lot line adjustment

[onevalue]

I have a client on a residential lot (.30 acre) that purchased an extra 20,000 sq ft from an adjoining neighbor. This was done 4-5 years ago and has been made an extention of the backyard. The bank requires before it will allow the addition to the parcel, a statement from an appraiser stating that this does not devalue the property. This is not for value.
Please give me suggestions on format and experience you have with lot line adjustments. Thank you.

 

[CANative]

I don't understand the problem. 4 or 5 years ago the property owner and the neighbor agreed to change the boundary lines between their properties. This means that one property got bigger and one got smaller. There was no addition and no new parcel. You can call the county planner or the assessor and ask for the BLA number (should be a hyphenated number with the year first and the adjustment number second.)

How can a lender allow or not allow something that has already happened?

 

[Mike Kennedy]

Lender to provide Appraiser with a copy of the Current Survey and/or the Revised Legal Description for the subject property reflecting the additional lot area.

 

[The Warrior Monk]

The bank requires before it will allow the addition to the parcel, a statement from an appraiser stating that this does not devalue the property. This is not for value.

This actually is "for value." An appraiser stating the effect on value of a property of something is an appraisal; i.e., opinion of value.

I'm not following what the bank means by "allow the addition of the parcel." It appears that the parcel was already added...is that the case?

 

[onevalue]

To Clarify...
The purchase happened 4-5 years ago but the lot line was NOT officially moved. Here part of the explanation of my assignment...

"They have told me that the format does not matter, but it needs to be written by an appraiser.
The bank needs the information to confirm that the lot line is not going to negatively affect the value of the property.
The information will be send, with a package of other information, to both mortgage companies in order to approve the lot line, since technically they own my house."

 

[CANative]

Danger Will Robinson. Warning, warning, warning.

It sounds like one property needs a release of a portion of their property and they want to use your appraisal somehow.

 

[The Warrior Monk]

In cases like this, I would need clarification on the legal status of the property. In many jurisdictions a property owner can't simply move a lot line. It would need the appropriate approvals, basically to make sure it conforms with all of the zoning and other requirements that apply. If the proper approvals are in place, and if the property was purchased in the under the same ownership as the parcel to which it would be merged, in many jurisdictions the parcel is considered merged, whether or not a tax map or survey shows it.

In summary, in my own practice, I would require the necessary documentation confirming the legal status of the property before I would address what they are asking for.

 

[Mark K]

After reading this a few times I remain somewhat confused but it sounds like there are two appraisals required.

One for the property that obtained the nearly 1/2 acre and one for the other parcel that lost the same amount.

It should be relatively easy to state that the value of the property that acquired the 1/2 ac. has not been reduced, if this is the case (likely).

To state the same for the other property would mean that the excess 1/2 acre had zero value (unlikely).

You need to get more details and to verify your scope of work before proceeding.

 

[TEL2002]

Sounds like you need to see the survey stakes. Otherwise how do you confirm what you are saying about the additional land.

 

[Terrel L. Shields]

The bank requires before it will allow the addition to the parcel, a statement from an appraiser stating that this does not devalue the property. This is not for value.

You, the appraiser is performing an appraisal assignment when you aver the very direction of a value. See the definition of "Appraisal" in USPAP... ("expressed as a relationship (e.g.-not more than, not less than).." They are asking that you express that relationship - i.e. - the additional land will not change the value or will add to or subtract from value.
However.....
If you stated correctly that the "client" owns the lot, then the bank's role is what? If you misspoke and the "client" is actually the bank.... then explain to them that it would require an update of the report. The new "update" would include the additional land and you might conclude that the property value did not change, but you must disclose the prior assignment.

You can do this by the expedient of the option available where the prior report is included by reference... i.e. - your "update" references the report or you can attach the whole report and write an addenda.

Folks will tell you to write an addenda to the original report... I am telling you that USPAP says to write a letter report that incorporates by reference or attachment the original report as the addendum. That new report must include all the items required in Advisory Opinion 3....

I don't agree with the notions above that suggest you need to worry about a survey, do two appraisals, etc.