Wendy
Senior Member
- Joined
- Feb 23, 2004
- Professional Status
- Certified Residential Appraiser
- State
- Florida
I've searched and read a million duplex threads, but still don't have a clear answer. So let's re-hash this one more time! yea!
Situation:
SFR 1200+/- SF with a 500 SF cottage. Both on same lot. Single APN. Cottage is currently rented. Main house owner occupied. Typical market motivation would be to have owner occupation of the main house w/ a little bonus income from the cottage (legal or illegal - we are a college town). Not a great deal of investor appeal as a duplex (rental of both units) since the cottage is so small. Comps are limited and typically sell as SFR not multi-family.
Current zoning is SFR (no duplex). Subject is grandfathered (built in '30s) and is considered legal non-conforming by city. 70% or greater destruction and it can not be rebuilt with 2 dwelling units.
Rental of the cottage is allowed as long as there is no vacancy greater than 365 days. Vacancy of greater than 365 days would make it illegal to rent and it would become a MIL unit. Some question exists as to if an continuous occupancy permit for the rental is also required. Note: These legal non-conforming rental rules seem to change based on the interpretation of the city officials. I consider them tenuous at best.
Question: Since it's status as a duplex is somewhat shaky, is it mis-leading to report it on a 1025? Likewise, is it misleading to put it on 1004 since there is current income from the cottage?
Personally, I think it falls somewhere between the two.
Client is high quality, non-value pusher who needs a "form" report to comply with internal standards. Talk with them indicates that they would like a SFR w/ MIL and full disclosure of current zoning and income.
My thoughts:
1004 - Current zoning is SFR. Predominate use in area is SFR. Typical buyer would be owner occupied main house. BUT there is income from 2nd unit.
1025 - Current use is SFR w/ income unit. However, this may/could change leaving lender with collateral that is not the same as loaned on.
What say you?
Situation:
SFR 1200+/- SF with a 500 SF cottage. Both on same lot. Single APN. Cottage is currently rented. Main house owner occupied. Typical market motivation would be to have owner occupation of the main house w/ a little bonus income from the cottage (legal or illegal - we are a college town). Not a great deal of investor appeal as a duplex (rental of both units) since the cottage is so small. Comps are limited and typically sell as SFR not multi-family.
Current zoning is SFR (no duplex). Subject is grandfathered (built in '30s) and is considered legal non-conforming by city. 70% or greater destruction and it can not be rebuilt with 2 dwelling units.
Rental of the cottage is allowed as long as there is no vacancy greater than 365 days. Vacancy of greater than 365 days would make it illegal to rent and it would become a MIL unit. Some question exists as to if an continuous occupancy permit for the rental is also required. Note: These legal non-conforming rental rules seem to change based on the interpretation of the city officials. I consider them tenuous at best.
Question: Since it's status as a duplex is somewhat shaky, is it mis-leading to report it on a 1025? Likewise, is it misleading to put it on 1004 since there is current income from the cottage?
Personally, I think it falls somewhere between the two.
Client is high quality, non-value pusher who needs a "form" report to comply with internal standards. Talk with them indicates that they would like a SFR w/ MIL and full disclosure of current zoning and income.
My thoughts:
1004 - Current zoning is SFR. Predominate use in area is SFR. Typical buyer would be owner occupied main house. BUT there is income from 2nd unit.
1025 - Current use is SFR w/ income unit. However, this may/could change leaving lender with collateral that is not the same as loaned on.
What say you?