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One Family Converted Basement Into A Multi Family Dwelling

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flyerman22

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Went to an assignment for a 2 family but found out this was a single family converted to a 2 family by converting the basement into the second dwelling. This was permitted and legally done as per the paperwork from NYC. The question becomes should I count it towards GLA? It is below grade but how to complete? Any help?
I have read you can legally convert a 1 family and rent out the basement if you get all the proper permits and drawings.
 

hastalavista

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Excluding some local nuances (which may be a critical difference and not a nuance), what is the H&BU?
Is it a duplex or is it a house with a accessory dwelling unit? What is the difference in above grade living area vs. below grade living area.

Who buys these properties (investors or owner-users) and what do they do with the 2nd unit?
In San Francisco (which is a similar urban market), what you describe would likely be valued as an SFR with accessory dwelling unit; regardless if it were rented out or not.
 
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jay trotta

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Think it would fall under GBA; yes have done a few in different area's and most I've done were at grade for entry & exit, as long as the Units are Legally Permitted, they have met local zoning & fire code. If it's not permitted, legally, I would walk away to many complications.

Have done, Owner Occupied & Investor, rents are fair to the market.
 

J Grant

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Went to an assignment for a 2 family but found out this was a single family converted to a 2 family by converting the basement into the second dwelling. This was permitted and legally done as per the paperwork from NYC. The question becomes should I count it towards GLA? It is below grade but how to complete? Any help?
I have read you can legally convert a 1 family and rent out the basement if you get all the proper permits and drawings.

There are two different kinds of "legal" , there is legal zoning, which may or may not permit a two family rental duplex use of a single family home, and there are "legal" permits which only means the owner had the work done "legally" done, by applying for a building permit and having the inspection done that work was done according to building code.

This home still may be out of compliance with zoning, does the zoning allow for duplex /multi family use, or not?

Then there is the issue of regardless of zoning or a buidign permit, the second unit is below grade, with most lender purpose lender work and guidelines ANSI etc not wanting a below grade reported as GLA. Whether it is GBA is not the question. The basement can either get contributory value f not included in sf, or disclose basement it is part of GBA in your calculations but not GLA.

Are duplexes with the second unit in the basement typical in area ? ( I suspect subject is a a single family where they converted the basement lol but will see...either duplexes with second unit exist with basements where logically at least some would have been sold to be comps ))

I'd check with what the zoning if subject area allows duplex or a variance was given or it is grandfathered in- if not its a SFR with a finished basement.....

In any case imo inform lender what you found re the basement unit ( as well as any zoning issues) and ask them how they would like you to proceed...how they instruct you may or may not be an acceptable assignment condition you wold have to decide at that point.
 
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J Grant

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I have read you can legally convert a 1 family and rent out the basement if you get all the proper permits and drawings.

Building permits address property configuration and construction, renting out addresses zoning - a home might get a zoning variance to legally be recognized as a two family, or it may be grandfathered in , or allowed or not allowed by zoning, however the building permit applies to the constitution itself. (does it meet local codes for construction, set backs on lot or height etc )

Of course people can on the QT rent a basement out in their house , but that is different than the property being a legal per zoning two family or duplex property .
 

Terrel L. Shields

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Ask lender how they want to proceed first. They may not wish to pursue a SFR loan if a multifamily house. And I would never call a basement a "duplex"
 

Mike Kennedy

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Can I rent out my basement as an apartment? | City of New York
www1.nyc.gov/nyc-resources/FAQ/317/can-i-rent-out-my-basement-as-an-apartment
Can I rent out my basement as an apartment? There are different rules about the occupancy of cellars and basements. You can read more about this topic in the brochure Occupancy of Cellars andBasements in One- and Two-Family Dwellings.
Buildings - Illegal Conversions - NYC.gov
https://www1.nyc.gov/site/buildings/renter/illegal-conversions-vacates.page
Adding an apartment in the basement, attic or garage without obtaining approval or permits from the Department of Buildings; or ... You can also check the legal use of a building by visiting the Department's website and viewing the building's Certificate of Occupancy through the Department's Buildings Information System.
You visited this page.
important-safety-issues-illegal-basement-cellar-conversions - NYC.gov
www1.nyc.gov/.../renters/important-safety-issues-illegal-basement-cellar-conversions....
Illegal Basement and Cellar Conversions. Basements and cellars are very different spaces and have different legal uses. ... Basements in one- and two-family homes can never be lawfully rented or occupied for residential use unless the conditions have received approval by the Department of Buildings.
Rules for New York City Basement Rentals
https://www.citybuildingowners.com/rules-for-new-york-city-basement-rentals/
Jan 5, 2018 - In New York City, basements aren't the same as cellars when it comes to apartmentrentals. Certain basement rentals in New York City are legal, while others are not. First and foremost, the subterranean space must be a basement, not a cellar. According to New York City law, the two words are not, in fact, synonyms.
 

DWiley

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Apr 4, 2007
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Tennessee
Went to an assignment for a 2 family but found out this was a single family converted to a 2 family by converting the basement into the second dwelling. This was permitted and legally done as per the paperwork from NYC. The question becomes should I count it towards GLA? It is below grade but how to complete? Any help?
I have read you can legally convert a 1 family and rent out the basement if you get all the proper permits and drawings.
For Fannie Mae work, 2-4 unit properties, you should be looking at the GBA, not the GLA. Refer to the Selling Guide for more info.

Gross Building Area
The gross building area
• is the total finished area including any interior common areas, such as stairways and hallways of the improvements
based on exterior measurements;
• is the most common comparison for two- to four-unit properties;
• must be consistently developed for the subject property and all comparables used in the appraisal;
• must include all finished above-grade and below-grade living areas, counting all interior common areas such as stairways,
hallways, storage rooms; and
• cannot count exterior common areas, such as open stairways.
Fannie Mae will accept the use of other comparisons for two- to four-unit properties, such as the total above-grade and below-
grade areas discussed in Gross Living Area, provided the appraiser
• explains the reasons he or she did not use a gross building area comparison, and
• clearly describes the comparisons that were made.
 

NachoPerito

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Jul 25, 2012
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Certified General Appraiser
State
Washington
I have read you can legally convert a 1 family and rent out the basement if you get all the proper permits and drawings.

Building permits address property configuration and construction, renting out addresses zoning - a home might get a zoning variance to legally be recognized as a two family, or it may be grandfathered in , or allowed or not allowed by zoning, however the building permit applies to the constitution itself. (does it meet local codes for construction, set backs on lot or height etc )

Of course people can on the QT rent a basement out in their house , but that is different than the property being a legal per zoning two family or duplex property .

Yes, It isn't clear if the permits they got were for a mother-in-law suite or a second unit that could be legally rented out.
 

S is for spittman

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Oct 24, 2005
Professional Status
Certified Residential Appraiser
State
Texas
This is similar to the thread I posted not long ago:

Finished Basement

What makes you think it is legal? Just because it's included in accessor's GLA doesn't mean it's legal. Can you decsribe the basement a little more? ...and what county is this located in?
 
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