medical marijuana.have some questions.

[EddieB]

A few days later the DEA showed up and found a meth lab inside in the unispected shed. The banks had just made a $600,000 loan on a property that now belonged to the DEA. The bank went after the appraiser and won. The pre-printed forms state that the appraiser viweded any areas that contributed to the value. The appraiser included the shed on the sketch.

When I was a wee trainee, I appraised a property with a locked detached garage. Owner said that he was allowing a friend to store things there and didn't have a key. A few weeks later, while watching breaking news at 6:00, I saw the live video of homeowner being taken away in cuffs. Large pot growing operation in the locked detached garage. I gave value to building and I did not inspect. My supervisor who also didn't inspect, said to not worry. I worried.

I believe that this should be disclosed in the appraisal. The States and the Feds are a long way from resolving this and I wouldn't want my E&O or career on the line in the meantime.

 

[Delta85]

I'd love to see a photo of this grow room. If it's the kind of structure that could be cleared out when the home is sold with no effect on the marketability of the home then I just don't see how this is an appraisal problem or how the appraiser could be held liable for things done in that room while the current homeowner is using it.

 

[Delta85]

So, if you don't want to be paying on a morgage for a house being auctioned by the DEA, then I would make sure that the bank, the appraiser, and your insurance person all knew about your garden and acknowledged in writing that they knew.

What kind of a slippery slope is that? So where do we draw the line in what we should be disclosing in our reports? To what extent are appraisers snoops and tattle tales and gossips? Are we to be aware of various legal issues and be familiar with civil and criminal law to the extent that we can understand what we are seeing, understand the ramifications of it, and make judgement calls as to what private behaviors happening behind closed doors belong in an appraisal report?

What if an appraiser does not know what weed looks or smells like? Do we make the report subject to expert inspection? If I appraise a home with a greenhouse do I make the report subject to plant identification from a licensed expert in order to make sure everything growing in there is legal? And am I truly competent to appraise homes if I am unfamiliar with local civil and criminal law now? It is bad enough being forced to be permit police but now we are social workers and federal/state/local law experts now?

 

[Tim The Enchanter]

When I was a wee trainee, I appraised a property with a locked detached garage. Owner said that he was allowing a friend to store things there and didn't have a key. A few weeks later, while watching breaking news at 6:00, I saw the live video of homeowner being taken away in cuffs. Large pot growing operation in the locked detached garage. I gave value to building and I did not inspect. My supervisor who also didn't inspect, said to not worry. I worried.

I believe that this should be disclosed in the appraisal. The States and the Feds are a long way from resolving this and I wouldn't want my E&O or career on the line in the meantime.

The building has value regardless of what's inside it, yeah?

 

[JTip]

I didn't know the op, and apparently most who posted, are experts in botany.

I'm not. I specialize in real estate and real property, mostly the residential side though I would love to get into some commercial stuff in the future.....

 

[Lost Cause]

When I was a wee trainee, I appraised a property with a locked detached garage. Owner said that he was allowing a friend to store things there and didn't have a key. A few weeks later, while watching breaking news at 6:00, I saw the live video of homeowner being taken away in cuffs. Large pot growing operation in the locked detached garage. I gave value to building and I did not inspect. My supervisor who also didn't inspect, said to not worry. I worried.

I believe that this should be disclosed in the appraisal. The States and the Feds are a long way from resolving this and I wouldn't want my E&O or career on the line in the meantime.

What is it you want disclosed in the appraisal? That the appraiser requested but was denied entry into the locked garage area?

 

[Pat Butler]

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.

 

[Metamorphic]

This thread really points out an interesting gap in USPAP or FNMA appraisal guidelines.

That gap relates to the reasonable privacy expectations of occupants.

Although our business is the Real Property, doing the job necessarily involves some invasion of the personal privacy of the occupants. The fact that we publish photos and descriptions into a lending pipeline that is largely unsecured aggravates the privacy violation of the mere fact of the inspection, and certainly creates a some non-negligible level of security risk to the occupants. If a criminal were to get ahold of the computer I'm typing this post on, they would have access to thousands of photos of documenting the addresses and contents of homes all over the region. Quite a head start for burglar. How many reviewers or underwriters are out there taking home work to a house where their ne'er-do-well child is in residence?

As a result the appraiser gets put in the situation described in this thread, where we're left to figure out on our own how to balance the need of the IU's to have the most complete available knowledge, with the reasonable rights of the occupants to privacy and security.

There really should be some guidance on this so that we at least have a chance of doing it right. As it is we're liable to the IU's if we say to little, and liable to the HOs if we say to much or if our data causes them to suffer a loss.

 

[Delta85]

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.

You don't see a difference between checking a box on page 1 of an appraisal report indicating Occupant and going into details about what the owner is dong inside their home that has zero effect on the property itself?

Lenders would be interested in knowing a lot of things about their borrowers behaviors. The majority of which has zero to do with appraisers. We are NOT their eyes and ears into the lives and behaviors of their borrowers.

Where do you draw the line? There are numerous things we might witness while appraising a home that could result in forfeiture or give an indication that a borrower might default on the loan or any variety of illegal activities that could cause them to be jailed, therefore cutting down their ability to pay a mortgage. Do we report all of this?

 

[EddieB]

What is it you want disclosed in the appraisal? That the appraiser requested but was denied entry into the locked garage area?

Sorry I wasn't clear. What I think should be disclosed is the operation of the OP. There is no judgement on my part, actually support. The OP went to great lengths to make the operation legal, permitted and apparently structurally sound.

Just like I should have disclosed denied entry into the locked garage. Now I address things like inaccessible crawl or attic spaces.