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Non-permitted Sqftg

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joeduncan

Sophomore Member
Joined
May 7, 2003
Professional Status
Licensed Appraiser
State
California
Can you give sqft value to a non-permitted room if you know its not permitted? even if it conforms well and looks great?
 

hal380

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Hello Joe;

Can you be more specific? Give us some more details.

A good answer starts with a good question, help us help you.

Regards

Hal
 

Bill_FL

Senior Member
Joined
Aug 23, 2002
Professional Status
Certified General Appraiser
State
Florida
You need to be much more specific.

Not all improvements require permits. Many jurisdictions have value limits for the permits. An example, if the cost of the work is less than $5,000, no permit required. I can see a garage conversion being done for less than that. So, no permit pulled, none needed. Is it illegal?
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
We are not the permit police!
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
You are doing "as is" with the SF in place. The non-permitted area may be beyond the statute of limitations, or a permit may not be required. Just comment and truck on, bro.

Roger
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
We face this issue quite a bit, converted garages, room additions, etc and the answer will depend on 1) does it meet generally meet code, ie setbacks, etc. and 2) what action the city/county etc would take if they knew about it?

In the Las Vegas area, non-permitted additions, upon discovery can range form requiring the owner to process permits and pay a fine to demo of the addition if it doesn't appear to meet code.

The issue here is not just value, but your responsibility to the client, ie to inform them of this condition. We are not the "permit police" statement may be true, but we still must report the fact that it is un-permitted and provide the client with conditions under which we can value the property.

1) investigate what getting the improvement legalized would cost in terms of time, money, etc. , likely to vary from town to town.
2) this is the cost to cure the problem
3) in many cases we make the value subject to permits,
4) in others we have made an extra-ordinary assumption (after discussing with the client) and identifying the range of possibilities and let the client underwrite the risk

No set solution, but to meet the H&B use test (as improved) the use and the improvements must be legally permissible ... meet codes.

Just my thoughts on the matter.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
You can do that if you want to, I don't and won't. I do not research additions to see if they were built with or without a permit. I do not attempt to determine if they are up to code...that's a home inspector's job. My job is to "estimate" market value. Normally I do not see a survey or a deed. Once in awhile we might get an Improvement Location Certificate (ILC) but not often.
 

Patrick Egger

Sophomore Member
Joined
May 29, 2003
Professional Status
Certified General Appraiser
State
Nevada
Mike ... I can understand your point, however if you read the Appraisal of Real Estate and many other publications, being familiar with and understanding the applicable building and zoning codes is very much a part of the appraiser's job! I would agree that we are not there to be "building inspectors" however we do have an obligation to make observations and report them.

It would seem reasonable that a building that does not meet code would likely have less value than one that does ... as appraisers we need to know the difference or at the very least be able to raise issues with our client.

Just my two cents.
 

Sean Wagle

Sophomore Member
Joined
Apr 18, 2003
Professional Status
Banking/Mortgage Industry
State
North Carolina
Non-appraiser's comment here. The proof of the pudding is in the eating!

In a county that simply changes the assessed value when they discover undocumented sqf, a buyer would not consider it a big deal. In a county that gets a code inspector can pick it over, insist on changes, etc. then I think any prudent buyer would be concerned-- and hold back something on the offer.
 
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