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Multi-family or SFR with ADU?

Johnny Knucks

Thread Starter
Sophomore Member
Joined
Jun 26, 2012
Professional Status
Certified Residential Appraiser
State
Maryland
I have been assigned to appraise a property which is listed in the tax record as a single family unit. Ranch style home built in 1960's. It's divided into two units, each with a separate access. Clearly marked as A and B units. Separate meters and HVAC systems. A unit is above ground. B unit is the basement. Both units have a kitchen and bath. You cannot get from one to the other from the inside, the wall has been blocked off. The original appraisal at time of purchase has it as a SFR with an ADU. I say it's a 2-unit Multi-family. Who is correct? Could it be either/or? I want to make sure I am on solid ground before responding because this is one of my biggest clients. Thanks in advance.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Is it legally zoned for duplex?
If not, it is a SFR the owners modified into two units with a second kitchen...which your client may want subject to remove the stove for second kitchen if it is not legal zoning for second unit or ADU. I'd describe it to your client and ask how they want you to proceed aka the stove/second kitchen
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
Is it legally zoned for duplex?
If not, it is a SFR the owners modified into two units with a second kitchen...which your client may want subject to remove the stove for second kitchen if it is not legal zoning for second unit or ADU. I'd describe it to your client and ask how they want you to proceed aka the stove/second kitchen
and re-open interior access between the two restoring legal use (unless the governing muni issued a 2 Fam C. of O. ) The OP can answer that ?
 

Johnny Knucks

Thread Starter
Sophomore Member
Joined
Jun 26, 2012
Professional Status
Certified Residential Appraiser
State
Maryland
and re-open interior access between the two restoring legal use (unless the governing muni issued a 2 Fam C. of O. ) The OP can answer that ?
The tax record indicates a second kitchen, so I don't think there is a problem there. It's also described as a single unit. The part that concerns me is that there are separate entrances marked A and B, separate electric meters, separate HVAC, and of course two kitchens, but that's in the tax record.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
The tax record indicates a second kitchen, so I don't think there is a problem there. It's also described as a single unit. The part that concerns me is that there are separate entrances marked A and B, separate electric meters, separate HVAC, and of course two kitchens, but that's in the tax record.
IT's a single family with an ADU in basement, not a duplex or multi family (unless multi family is legal for zoning). the fact that they installed separate meters and HVAC does not change that.
 

cmitchell

Sophomore Member
Joined
Jul 17, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
There are lots of homes my area divided into units. More than 1 meter is multifamily form. I did a multifamily class recently and the instructor said the same. The 1004 with accessory unit is a strick definition.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
There are lots of homes my area divided into units. More than 1 meter is multifamily form. I did a multifamily class recently and the instructor said the same. The 1004 with accessory unit is a strick definition.
where is it written edict an ADU can not have its own meter, or that a sep meter makes a SFR into a small income property? Who is teaching some of these classes.. A multi family has to be legal for zoning, that imo is the dividing line. AND a multi family is a different loan and property category, lender might decline borrower or property if not SFR, so also need to check with client in these situations and check zoning
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
where is it written edict an ADU can not have its own meter, or that a sep meter makes a SFR into a small income property? Who is teaching some of these classes.. A multi family has to be legal for zoning, that imo is the dividing line. AND a multi family is a different loan and property category, lender might decline borrower or property if not SFR, so also need to check with client in these situations and check zoning
Florida
 

glenn walker

Elite Member
Joined
Oct 11, 2006
Professional Status
Certified Residential Appraiser
State
California
where is it written edict an ADU can not have its own meter, or that a sep meter makes a SFR into a small income property? Who is teaching some of these classes.. A multi family has to be legal for zoning, that imo is the dividing line. AND a multi family is a different loan and property category, lender might decline borrower or property if not SFR, so also need to check with client in these situations and check zoning
Based on the description it sounds like owner turned his house into two separate units -As far as the separate utilities FHA will not allow it but Fannie will as long as its clear the ADU is not being used for rental purposes. In your case it sounds like Unit A & B and so its either a bootlegged unit or the owner actually got it re-permitted to use as two legal units ( highly unlikely ) Questions that need resolved : Does the neighborhood have duplexes mixed within it and what is the zoning ? Is the second unit rented out ? In a basement unit is it a firetrap , how does the occupant escape in the event the main unit house above catches on fire ? are there any windows or door leading to exterior ? Are there health & safety issues. Sounds Micky mouse to me but I could be wrong- My gut feeling is you have a Non-Conforming Property that may or may not even fit the legal non-conforming definition.

The ADU is supposed to be Subordinate in size to the main house, and may or may not have separate means of ingress and egress. Often ADU'S involve the renovation of a basement or small addition to a single family home.
FHA/HUD UTILITY SERVICES: An-Accessory unit must be connected to the utilities ( except telephone, TV, and cable ) of the dwelling unit and MAY NOT HAVE SEPARATE SERVICES .

FANNIE-FREDDIE -
Whether a property is defined as a one-unit property with an accessory unit or a two-unit property will be based on the characteristics of the property, which may include, but are not limited to, the existence of separate utilities, a unique postal address, and whether the unit is rented. The appraiser is required to provide a description of the accessory unit, and analyze any effect it has on the value or marketability of the subject property.
 
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