Permanently Attached - Definition

[mark hurlock]

If anyone could help me out, none of my reference materials have a good definition of permanently attached/affixed. I was hoping someone could provide me with a definition and source reference to use. (Time to do some book ordering!)

Situation: I appraised a lakehouse a couple months ago. The lakehouse was down on a grade, with a 1 car garage at street level, and the main house and a "bunkhouse" down the grade, next to each other.

Due to the following NFIP guideline the lender is asking me to remove the value (minimal) for the bunkhouse and state that it is not permanently attached:

The NFIP allows 1 structure per flood policy. Separate structures and outbuildings that have value and considered permanent must have a separate flood policy. Outbuilding/separate structures would not need coverage if the appraisal specifically indicates no value AND the appraiser indicates that it is not permanently attached.

If I recall correctly, it is on a concrete footing/pier and wood post foundation (of course I have photos of all other structure's foundations, but not the bunkhouse).

Outside of it having contributory value (I did offer to appraise it with the hypothetical condition that it has no value), I'm wrestling with their "permanantly attached" argument. So far, I'm citing the following reasons for why it is permanently attached:

1) As an example, a fence may not have a concrete foundation, but it is still permanently attached/affixed and considered real property.

2) The bunk house has power and is heated.

3) The bunk house is down the grade, on the same level as the house. There is no physically or economically practical way to remove it.

4) If I recall correctly (I don't have a picture of the bunkhouse foundation), the bunkhouse is on a concrete footing/pier and wood post foundation.

I'm also pointing out: The garage is a seperate structure, on a concrete slab foundation, and has value. Wouldn't it require an additional policy as well?

If it helps, I can email anyone a pic of the bunkhouse as it sits next to the main house for better analysis.

Thanks!

Establishing the structure to be permanent is simple enough. But they are asking you to give it no value. The market determines value not the convenience of flood insurance.

The fact that it needs a separate policy means you definitely want a supportable value. Do your comps support your value?

 

[CANative]

They're trying to suck you into their problem. This is an insurance problem, not an appraisal problem.

 

[Webbed Feet]

Outside of it having contributory value (I did offer to appraise it with the hypothetical condition that it has no value), I'm wrestling with their "permanantly attached" argument. So far, I'm citing the following reasons for why it is permanently attached:

<...snip...>
Thanks!

Did you "offer" to not use any 2005 Fannie forms for reporting while you were at it? Because your above is a modification to the SOW preprinted on those forms. Read the forms. Make your a above HC without using a subject to condition in the reconciliation section that meets USPAP requirements for credible use of an HC and you've got yourself a wittle problem if faced with a board complaint.

 

[Terrel L. Shields]

Webbed scores a point. I agree that an HC should not be used to distort the outcome to favor the client's desire to avoid paying flood insurance, meeting artificial conditions that won't be met in the real world ever....

 

[NWolvie]

Good points on the HC. I was a little quick on my offer to do that, and didn't have my critical thinking hat on when I did.

Fortunately, I didn't do that, and won't be doing that.

More so, I have been firm on the facts that the bunkhouse has contributory value and it is permanent.