No box for the situation

[Randolph Kinney]

Please read the Scope of Work rule where it states the scope may be revised throughout the assignment.

It is not fully determined at the beginning of the assignment, it may change.

For instance, I receive an order for a 1004. Observation reveals a HUD manufactured. I have already set my scope for a 1004 assignment, I am not going to proceed on a 1004 - my scope of work has changed and my client's input is required.

What I don't understand is why the issue is not taken up with the client - explain the situation with the client, tell them the options and what needs to be done for each step - if a copy of the permit is presented to appraiser, then I can mark it legal, if no permit is presented, I have to mark it as legal, non-conforming. This puts the ball in the lender's/borrower's court.

You had a SOW for a 1004. What you discovered meant that your 1004 assignment could not be completed and was at an end. Why?

You don't have a new assignment and new SOW for a HUD manufactured yet until you consult with your client and get their guidelines and you both agree. It may be the policy of your client not to make loans on manufactured homes in which case you don't have a new assignment.

 

[Lobo Fan]

After discussions with the client, it was agreed that I would mark it as legal, and make the report subject-to obtaining the proper permits. I was confused by previous discussions about non-permitted additions, etc. being zoning violations.

I think this is the proper way to handle this, though I do not want to go back and shoot a picture of the second kitchen with the stove removed. I hope that they get the permit and can just fax me the documentation.

Thanks for all the input on this one.

 

[Webbed Feet]

<..... snip.....>
What I don't understand is why the issue is not taken up with the client - explain the situation with the client, tell them the options and what needs to be done for each step - if a copy of the permit is presented to appraiser, then I can mark it legal, if no permit is presented, I have to mark it as legal, non-conforming. This puts the ball in the lender's/borrower's court.

Ms. Tiernan,

That doesn't work. If there are no permits, how did you arrive at a determination of "Legal Non-Conforming?" ... IF it is not legal, it is not legal. It doesn't become non-conforming. It is "Illegal."

Legal non-conforming would imply the issue predated zoning and permit requirements both. Therefore, it is grandfathered in and hence "Legal." I believe there is no such thing as "Illegal non-conforming."

Webbed.

 

[Webbed Feet]

After discussions with the client, it was agreed that I would mark it as legal, and make the report subject-to obtaining the proper permits. I was confused by previous discussions about non-permitted additions, etc. being zoning violations.

I think this is the proper way to handle this, though I do not want to go back and shoot a picture of the second kitchen with the stove removed. I hope that they get the permit and can just fax me the documentation.

Thanks for all the input on this one.

Lobo,

That would mean using CB3 with a HC of "Permits can be obtained or presently have already been obtained." Your work would have to be "based" on such an HC and I hope you explained the affects of the HC on the analysis.

If they come back having decommissoned the offending second kitchen, then the HC fails as does the "Subject To" premise. At that point it must be asked did your analysis reflect removal of the second kitchen and the market reaction of that? Or did it ONLY reflect the market reaction to multiple kitchens? In short, a new assignment may be required with a new analysis if they do that.

Webbed.

P.S. I would have found out from the jurisdictional authority (J.A.) if the lack of permits for the offending issue consitituted an "Illegal" zoning issue. Often, that is exactly the case as per the J.A. interpretation of their zoning and building codes.

 

[Randolph Kinney]

After discussions with the client, it was agreed that I would mark it as legal, and make the report subject-to obtaining the proper permits. I was confused by previous discussions about non-permitted additions, etc. being zoning violations.

I think this is the proper way to handle this, though I do not want to go back and shoot a picture of the second kitchen with the stove removed. I hope that they get the permit and can just fax me the documentation.

Thanks for all the input on this one.

So the distinction of a kitchen with a stove requires a permit whereas a kitchen with out a stove does not require a permit?

It seems to me the easiest way for the HO to comply is to remove the stove (put it disconnected into the garage for storage). Then tell the lender that they comply. The appraiser is contacted to re-inspect, photograph the hole where the stove was, and submit a 442.

After he gets the loan approved, he moves the stove back into the kitchen and reconnects it like it was before.

The counting the GLA of the MIL was never a question of having a permit.

PS - if the lender does not go along with this, the HO now is the wiser and applies to a new lender with no stove in place in the MIL.

 

[Webbed Feet]

Mr. Kinney,

It is only that simple if the local J.A. says it is. The appraiser should follow the J.A.'s definition that measures legality.

Webbed.

 

[Randolph Kinney]

Mr. Kinney,

It is only that simple if the local J.A. says it is. The appraiser should follow the J.A.'s definition that measures legality.

Webbed.

Absolutely agree. However, how do you make sense out of what Lobo Fan described for his fear?

I think this is the proper way to handle this, though I do not want to go back and shoot a picture of the second kitchen with the stove removed.

 

[Sid Pachter]

If the unit is "grandfathered" in, then the lender will want to know if the property is more than 50% destoryed, can it be rebuilt to its pre-destruction footprint, without a variance.

 

[KD247]

To my eyes, this is similar to appraising a vacant site that is believed, but not proven, to be buildable. There are many cases where the "answer" or "the truth" will not be known until the property is put to the actual test and, even then, one has to assume that authorities will act consistently for every property brought before them. (And, making the appraisal subject to an impossible requirement is not the solution.) In some cases, the answer can be found with just a little additional effort, but in many cases there is no definitive answer to be had.

Even after a reasonable amount of research, we are always left with some assumptions regarding legality (and title, and construction techniques, etc., etc.). State the assumptions (with clear cautions to the client), thoroughly analyze the effect on value and marketability (which will vary tremendously from area to area), and produce the report.

If the client refuses to accept a report that contains additional assumptions, that's when it's time to re-negotiate the scope of the assignment.

There are some areas near here that require code inspections upon each transfer, and others that only check permits during major new construction. Take away the few homes built in the last 25 years, and I don't think there's a single legal, conforming home on my street. But there's still a very strong market for them, with readily obtainable financing, and they apparently offer good security to the lenders.

 

[Riick]

And with all the above dissuccion.. what sayeth the client?

I used to work for a Lender who regularly financed "illegal" 2nd (and even 3rd & 4th) units.
As far as they were concerned, it was icing on the cake, less probability of owner defaulting since there was an extra income stream.