Permit Nay-sayers

[CANative]

we have the right to limit our liability by clearly setting out the extraordinary asssumptions that the improvements are legal.

I disagree and I think appraiser abuse of the EA resulted in the current FannieForm certs and prohibition on the use of an EA without the requirement for verification protocols.

 

[Joyce Potts]

I disagree and I think appraiser abuse of the EA resulted in the current FannieForm certs and prohibition on the use of an EA without the requirement for verification protocols.

Appraiser abuse of the extraorindary assumption? Where did you come up with that one? In fact, where's does FNMA prohibit an EA? Verification of protocols????? Ya got me.

If we're going to take it to that extreme, then we should equally re-define a knowledgeble, typical buyer and those chips fall within their own potocols.

 

[ghrousseau]

I say it is not the appraisers job to go searching for sales contracts or permits. It is the lenders responsibility to provide the appraiser with these items as they are not available during the normal course of business for an appraiser (at least here where permits are like a needle in a haystack and agents will not provide contracts). If they are not supplied, the appraisal should be made subject to the lender providing them.

I completely disagree with this statement. Many illegal additions or illegal second units in Southern California are not up to code. Some of the demographic changes in the past 10 to 15 years have certain cities looking like shanty towns. I have seen above ground sewer runs and water/gas supply lines run on exterior walls. Another big problem is incorrect roof pitch and sub-standard wiring. Once I suspected an addition was illegal I would call the city to confirm. If permit information wasn't available over the phone or on-line then I would go to the city department of building and safety and check for permits on file and also confirm the zoning information. If the property had been citied for code violations and was in the process of being corrected and permitted then I would include the addition and make it subject to the final. If the addition was just flat out illegal and sub-standard construction, then I would show it on the sketch, describe it, and provide photos with no value given. For illegal garage conversions it was always cost to cure and value as garage only. Some would argue that it is not the appraisers responsibility, but I was trained differently. When my mentor taught be to book appointments I was told to ask the owners "any recent remodeling or room additions? Do you have a pool? Is there a HOA?" One thing is certain, the lender always was informed with the correct information and they could determine if they wanted to change directions.

 

[CCAAMO]

Wow, theres a leap of logic, from verifying if there are permits for a room addition to is the tenant a sex offender? The bottom line to due diligence is what is usual, typical and reasonable. If the improvements match say the assessor's records, then it would be reasonable to assume it was built with permits. If the assessor says is s single family home but there are now three units on the property or the assessor's says if is a two bedroom 1,000 s.f. home and there is a four bedroom 1,600 s.f. home there it would be reasonable to assume an addition was made at some point and either the appraiser need to verify the permits or make the appraisal subject to the owner or lender producing them. This is a big difference from being a home inspector, engineer, geologist etc. A little common sense will go a long way.

 

[Pamela Biggers]

Finally, someone brought up the assessors records. However, in Pima County and other counties included do not assume the addition is permited if it is in county records. Our county picks up anything on the property and does not check or care if it was permited or even up to code. Government agencies are not always quick on picking up the permited additions either.

Another reason to check permits is taxes. There are many buyers that are hit with unexpected rises in taxes due to additions not yet on the rolls. This can be years later or a few months. I am sure lenders would want to be aware of this as it affects the loan. A buyer hit with a suprise increase due to a legal guest house not yet included in taxes could be important. Anyone can be sued for anything, CYA.

 

[CCAAMO]

Pamela, thats a good point. If you know the assessor's records in your area are not based on the permits on file at a given time then it would not be a good source to compare what is actually on the property. My primary concern in this discussion is the reluctance of appraisers to either verify or require verification when the see obvious additions or additional units/guest houses which do not conform to the zoning.

 

[Wendy]

Our assessor also adds everything regardless of permit. Unless the addition is blatantly in violation of code or zoning, none of the authorities do anything.

Most of the authorities also screw up the permit records on a regular basis. I checked a permit for a bedroom addition and was told by the permit tech that there was no permit. I go a call 2 weeks(!) later that opps - there was indeed a permit and everything was ok.

Thankfully it was not for a report.

 

[Sid Pachter]

Thanks to those willing to go the extra mile and check not only for the existence of permits but to report if the all needed inspections were completed and the permit was closed. Jay in post#22 is on target.

 

[CANative]

Sid... What would you like us to do if say a garage was converted to a family room 20 years and at least 3 owners ago, the work is beautiful and the use is legal but a permit was never applied for?

 

[TJSum]

Sid... What would you like us to do if say a garage was converted to a family room 20 years and at least 3 owners ago, the work is beautiful and the use is legal but a permit was never applied for?

Another common problem along the same lines is for basement finishing, more times than not, the basement finsihes are done without permits.