Permit Nay-sayers

[ZZGAMAZZ]

For those of you who do feel that it is beyond the typical SOW to determine the permit status of "exceptional" features:

My comp 5 in El Monte, CA, sold at much less than market value. After numerous calls I was able to speak with the listing office charged with marketing the REO. The selling price reflected approximately $30,000 in repairs required by the City to return the interior of the detached unit to its original and legal configuration because the owner had changed the bedroom and bathroom count without permits.

(Also another excellent reason to contact the comparables listing agents...)

 

[c w d]

For those of you who do feel that it is beyond the typical SOW to determine the permit status of "exceptional" features:

My comp 5 in El Monte, CA, sold at much less than market value. After numerous calls I was able to speak with the listing office charged with marketing the REO. The selling price reflected approximately $30,000 in repairs required by the City to return the interior of the detached unit to its original and legal configuration because the owner had changed the bedroom and bathroom count without permits.

(Also another excellent reason to contact the comparables listing agents...)

And how would you know what to adjust the comps if your subject had some feature that required permitting but was not permitted? I'm most definitely not qualified to determine to what extent a feature is or isn't built to code, so who am I to say that the feature should or shouldn't be included in the appraisal? If the feature is not permitted but built strictly to code, how is it illegal? And how does it impact an opinion of value?

 

[Michigan CG]

This does not appear to be an Urgent problem or a help needed post. I am moving it to General Appraisal Discussion.

 

[CANative]

Why didn't you move it to the Marginally Relevant Anecdotes forum?

 

[ZZGAMAZZ]

CWD: The non-permitted recongifuration status required the seller to spend $xxxx to bring the property into compliance; and I view that as the basis of its selling price at what appeared to be less than market value, which required an upward adjustment (my thinking it to be a "functional" item) to bring the adjusted value into proportion with the remaining comps. Fortunately it was a comp rather than the subject, which is often the scenario. Granted it's situational but it's life in the naked city at its best.

GB: It's relevant in the perspective of a long recent thread during the course of which several prominent posters discounted the need to contact listing agents. (But my my hey hey it's also the internet era where everybody is an author, eh eh?)

 

[Joyce Potts]

What determines an 'exceptional' feature?

Where does the exceptional feature start or stop?

Seems to me if any improvements become affixed to the land, that's pretty exceptional.

If I decide to put Grandma's ashes in the backyard with a headstone, is that exceptional and is it the appraiser's responsibility to seek out any permits to make it legal?

We're not home inspectors, so why burden us with policing permits?

 

[c w d]

CWD: The non-permitted recongifuration status required the seller to spend $xxxx to bring the property into compliance; and I view that as the basis of its selling price at what appeared to be less than market value, which required an upward adjustment (my thinking it to be a "functional" item) to bring the adjusted value into proportion with the remaining comps. Fortunately it was a comp rather than the subject, which is often the scenario. Granted it's situational but it's life in the naked city at its best.

I understand what you're saying. My statement was about other homes we may do appraisals on. How do you determine a value to subtract to or add to the comparables for a feature of the subject when you don't know to what extent the feature may or may not be built to code? I don't think we're qualified to be building code/zoning code enforcement. Hence, there is no requirement for us to pull permits.

 

[Mark K]

Why didn't you move it to the Marginally Relevant Anecdotes forum?

I like that.

Or maybe the "Beat a Dead Horse" forum.

Or the "My Opinion is Right and Yours is Wrong" forum.

But then most of the other forums would dry up.

 

[CANative]

Z...

I posted that because it is an anecdote and it is only relevant to someone working on a similar assignment in the City of El Monte and if the specific situation and set of circumstances were exactly the same.

But you kind of posted a trick question. The thread title (permit naysayers) implies you are challenging appraisers who don't check for permits whenever they see something that might be out of the ordinary (exceptional). Your case is based on an incident where a city required reconversion of an altered space presumably because there was a lack of a permit. This does not sound like the entire story.

Municipalities will almost never require demolition or reconversion or major changes to existing structures which are a legal and permitted use simply because an administrative permit was not obtained. But they will act if something was built that is not a legal use or was not built in compliance with their building codes and ordinances. In your case you stated that they had to restore the property to it's original configuration in order to be in compliance. This implies that the work was not to code and that is why the city acted... not because of a missing permit. You can't get a permit for an illegal use.

 

[Robert Muir]

If you see a potential problem that you do not want to be held accountable for, do you not check it out, or at the very least recommend that the buyer/client have it checked out. Remember it is all about CYA in this age. How long does it take to talk to the local building inspector?

As to how this post is relevant...we all don't sit here and read every single post for the past five years...sooo...we don't know if it has already been covered by the experts...I have been appraising for over 16 years and I still have questions sometimes...(as another posting titled says: Adapt or Die.) We are not sitting in a factory watching a belt go by us. We are professionals and our job changes on a regular basis. That's why we all love it so... Also most likely, I don't have time to read every post or thread in this forum, so please let us ask our questions, you guys are the experts, help us, or just change the channel...
Bob