medical marijuana.have some questions.

[Pat Butler]

Where do you draw the line?

I draw the line at the items requested by the client on the appraisal form that they chose. When it asks whether or not the use is legal then I need to consider whether there is some sort of use in the house that is legal or illegal. I also need to consider whether or not what they are doing is acceptble under zoning.

I agree that there are gray areas, but pharmaceutical production in a residential neighborhood is way over the line. So I would report that. If the client ends up ignoring that info then that's fine. But reporting something that they might ignore is better than not reporting something that they might have been concerned with.

 

[Delta85]

I draw the line at the items requested by the client on the appraisal form that they chose. When it asks whether or not the use is legal then I need to consider whether there is some sort of use in the house that is legal or illegal. I also need to consider whether or not what they are doing is acceptble under zoning.

I agree that there are gray areas, but pharmaceutical production in a residential neighborhood is way over the line. So I would report that. If the client ends up ignoring that info then that's fine. But reporting something that they might ignore is better than not reporting something that they might have been concerned with.

What's illegal? The structure itself or the human activity going on inside it? If I appraise a home and a crap game is underway in the basement do I report that? How about if I see a bunch of kids playing in the family room? Do I ask if this is a daycare and if so do I ask for paperwork to see if it is legal or not? How about if there are suspicions that the homeowners are illegal aliens? Do I investigate?

I think it's a big mistake suggesting that appraisers become the eyes and ears of the lender on any and everything concerning the borrower. The home is what we are looking at and if their behavior or activity is effecting the structure THEN we can make notes in the report.

 

[Metamorphic]

What you call pharmaceutical production, looks a lot like gardening. An extra child hanging out could be an illegal day-care operation. I few too many boxes could be an untaxed ebay business. The magazines in the gun safe might hold too many bullets. The quantity of Roundup in the garden shed may exceed regulations. Heck, a lot of states still have sodomy laws; are you going to report the lube in the nightstand?

 

[Pat Butler]

Doesn't matter what it looks like. It IS pharmaceutical production.

I appraised a property years ago that had an illegal child care operation going on inside. I had never seen anythign like it. The lady had jammed in 20 baby cribs in the basement so close that they were touching. I walked into the basement and a bunch of babies started looking at me. The crowded conditions were terrible for these kids. I simply photographed it and disclosed the use in the report.

Common sense needs to be applied here, just like all the other decisions we make in an appraisal. I can't believe that a lender would not be concerned about drug production in a house and would let them decide whether it's something that would concern them. I think it would also affect value if you were to put the house on the market and have non-liberal prospective buyers coming through the house and seeing the 'operation'.

 

[George Hatch]

You're missing the point. The lender is also concerened about other aspects of the property other than just the value. Hence, the occupancy box, etc.

I firmly believe that most lenders, at least those outside of CA, would be interested to know that there is an illegal pharmecutical operation going on inside the subject property. The little box that says "legal" or "illegal" might have some applicability here as well as the zoning.

No, that box is specific to the HBU analysis, which speaks to how the market deals with the realty.

Hydroponic equipment and their contents are personal property and are typically excluded from the valuation of the realty. Even a drip irrigation system wouldn't normally be considered significant to the valuation of the realty. Commenting on that in an appraisal is the equivalent of commenting on someone's disco ball and surround sound stereo system they set up in the family room.

For SFRs' the occupancy of the unit generally isn't really a factor in the valuation unless there's a lease encumbrance on the property rights appraised. That lenders ask that question in an appraisal speaks to their internal requirements with respect to the terms and conditions of the loans they're writing, not to anything involving the valuation of the realty.

I suppose a lender could include in their appraisal policy a requirement to report all unlawful conduct onsite based on the appraiser's understanding of local, state and federal laws and regulations. I can't see them ever doing it, though.

If the people have poor housekeeping does that go into an appraisal report? If the house is vacant is that significant to the HBU analysis? If the occupants are a racial minority is that part of the valuation? If one of the occupants is a child molester or a drug addict does that go into an appraisal report? Of course not - because all those people and all their personal characteristics are portable and go with the occupants when they leave.



I'm really not that interested in wading into choosing sides in the ongoing culture war and the current impasse between state laws voted into being by the state voters vs federal laws being written by the politicians in Washington. Unless and until federal seizures of homes where the states have permitted MM growing becomes an issue in the market I'm not inclined to unilaterally make it an issue in an appraisal report.

If I had staunch moral objections to the manner in which people occupy their properties then I'd be more inclined to withdraw from an assignment involving those properties than I would be to injecting my opinion of morality into an appraisal report under cover of plausible deniability via citing federal drug laws.

If a client wants to ask the question then they can take responsibility for asking it and I can consider the merits vs the legal liability of providing that answer in an appraisal report.

 

[PropertyEconomics]

I can just imagine the situation if the OP gets rejected but also happens to be a member of a protected minority group with respect to Fair Lending laws.

George I certainly understand what you are saying but I dont think any of the protected classes are protected in so far as they are allowed to break the law. A crime is a crime even if committed by a protected class member under Fair Housing or Lending Laws.

 

[Delta85]

Doesn't matter what it looks like. It IS pharmaceutical production.

I appraised a property years ago that had an illegal child care operation going on inside. I had never seen anythign like it. The lady had jammed in 20 baby cribs in the basement so close that they were touching. I walked into the basement and a bunch of babies started looking at me. The crowded conditions were terrible for these kids. I simply photographed it and disclosed the use in the report.

Common sense needs to be applied here, just like all the other decisions we make in an appraisal. I can't believe that a lender would not be concerned about drug production in a house and would let them decide whether it's something that would concern them. I think it would also affect value if you were to put the house on the market and have non-liberal prospective buyers coming through the house and seeing the 'operation'.

You photographed children and included it in your report? Wow. I'd never consider doing that. Perhaps, if I saw a situation where kids appeared to be in danger, I'd make a discreet phone call to the authorities. But this information has no place in an appraisal report.

As bad as an illegal daycare is, I don't see how it effects the subject property unless they have altered the structure somehow to accomodate the business. How is it the appraisers job to determine and disclose an illegal daycare? How many kids does it take to make an illegal daycare? 5? 15? How do you investigate this? Do you question the homeowner?

 

[Metamorphic]

George I certainly understand what you are saying but I dont think any of the protected classes are protected in so far as they are allowed to break the law. A crime is a crime even if committed by a protected class member under Fair Housing or Lending Laws.

You haven't really been following the latest on illegal immigration and ICE have you?

We're rapidly devolving into a society ruled not by law, but politically based mandate. I dont think a bunch of federal prosecutors appointed by a president who admitted in his autobiography to doing "a little blow", are going to proffer chargers against medical users working under a state exemption. Can they? Sure. And if they wanted to they could subpoena the state's license records and make about 20 busts an hour for week and wrap them all up. Has it happened? Even once?

 

[CANative]

George I certainly understand what you are saying but I dont think any of the protected classes are protected in so far as they are allowed to break the law. A crime is a crime even if committed by a protected class member under Fair Housing or Lending Laws.

Sick people are allowed to grow their medicine. Being sick is probably considered some sort of protected class (AIDS patients are a protected class and marijuana is a recognized treatment.)

 

[Alpine]

What you call pharmaceutical production, looks a lot like gardening. An extra child hanging out could be an illegal day-care operation. I few too many boxes could be an untaxed ebay business. The magazines in the gun safe might hold too many bullets. The quantity of Roundup in the garden shed may exceed regulations. Heck, a lot of states still have sodomy laws; are you going to report the lube in the nightstand?

Bingo! Unless I were to witness child, elder, or other domestic abuse, or undisputable evidence of the manufacture and sale of hard drugs, or obvious mold/mildew-related damage or fire risk to the property from the grow, what someone does in their home is simply not my business. How something impacts the condition and marketability of the property might, but growing three-to-six plants of the same flora that the Founding Farmers did is not going to impact the property.

To the OP: To most Oregon appraisers, your situation is old news and a non-starter; sadly, some appraisers here are of the ilk who want to impose moral judgment on your real estate. I feel it's reasonable to disclose the grow and permit to the appraiser, then state that while you expect him to describe the improvements (enclosed room) in the report, you are requesting he not violate your privacy by disclosing the contents or photographing them. One of the social problems with legal medical marijuana grows is that if the local criminal element learns of it, they may try to break in and steal it.

Similar concerns are expressed to appraisers by many homeowners with other types of valuables or homes businesses. I recently appraised the home of an extreme right-wing and privacy/conspiracy nut who was literally paranoid about the photos of the interior of his home being "imbedded" on the internet. He also had artwork he claimed was collectable, so I took pictures from specific angles of his living room, kitchen, and baths, and simply disclosed that interior photos were limited in the report due to borrower's request for privacy. I have had the same experience to a lesser degree of paranoia when homeowners were part-time gun dealers, jewelry-makers, etc. Then there was that couple who sewed leather and latex fetish wear and sold it online-- she kept him in a collar! Again, their business, not mine.

Finally, just make sure the appraiser's name is not Pat "Self-Appointed Vice Inspector/Enforcer of All Federal Statutes/DEA Informant Wannabe" Butler. You might even ask the appraiser their party affiliation before you let them in. Wait, nevermind, a true conservative would support state's rights over federal mandates, especially when it comes to what you can do in the privacy of your own home.