Removal of a closet - impact on value?

[Dublin ohio]

It's not the "typical" electric panel. The units already have one. It's "a new electrical distribution system in which the equipment is larger than the existing ones, and that closet space is needed to safely supply electricity." That is the only detail the HOA has provided. Based on that description, it sounds like it will take up all 7-sf space (8" X 8'4").

Based on how the units are configured, that is the only area that could be used. There's a door in the hallway that leads to a room next to the unit where presumably the old distribution unit is located. It's going to "intrude" into the owners' space. It's like "eminent domain" where the HOA is seizing 1% of that space, which happens to be somewhat vital. I mean, whereas can you hang your winter articles? I mean, I can see installing hangers and a bench, and it doesn't seem to be a "big" deal, it seems to be.

It's like a room in condos that are used exclusively for building use only, in this instance, it presumably contains the old distribution system.

Hope that makes sense and clears things up a little. That's why I don't think it's simply a cost to cure item. Definitely obsolescence, but determining the impact of value, well that's a mystery.

So from your description it is a distribution panel. It would seem to me that if the closet is being taken for common use, the owner of the unit might have some recourse to recover any loss in value

 

[CGinMN]

So from your description it is a distribution panel. It would seem to me that if the closet is being taken for common use, the owner of the unit might have some recourse to recover any loss in value

Yes, I think that’s the point of the appraisal.

If this was a mortgage appraisal, most appraisers probably wouldn’t adjust for a 7sf difference or lack of closet between subject and comp.

I’d probably look at the total value per square foot of the condo, multiple it by the number of SF lost, and that’s the damage. So $500/sf x 7sf = $3,500, rounded to $4,000sf.

Measuring functional obsolescence will be difficult. You might be able to find other minor variations between units in other buildings, but as you say that’s a needle in a haystack and the fee for the assignment would be greater than the diminution in value to the unit.

 

[Paul K Moy]

I hope these attachments help clarify the questions. I'm appraising 8 of these condominium units all on the same tier. The HOA needs to take the closet space by the entrance. My thought process for an adjustment at this point is to deduct 2% off the appraised value. The rationale is, one, the owner is losing 1% of their space, and another 1% presumably to cure that deficiency.

 

[Zoe]

I see no impact. Both bedrooms have closets. Is there like storage room with outside access?

I see no problem.

Is this sell or refinance? or other?

The reason I ask is because you could ask buyer if it is a problem. You could ask homeowner if it is a problem.

 

[Terrel L. Shields]

Simple solution. Move and let someone else deal with it.

 

[Zoe]

It is most likely curable. You could do curable obsolescence adjustment. I am not sure. You can probably build another closet for $2k +/_

 

[J Grant]

Are the homeowners suing the HOA to recoup money the owners think they lost by having a closet removed?

 

[JTip]

Interesting case study.

Is there a special assessment to pay for this upgrade?

Even though individual units are "losing" 7sf, they still own it as part of the common area, simply losing the ability to use it personally.

I like the idea of a 'cost to cure' by installing lockers in a common area for each unit, replacing the lost 7 sf (to store those winter jackets in the middle of June in your picture).

 

[KHS445]

From the picture provided, the enclosed closet appears to be greater than .8" in depth. I can see hangers and boxes inside the closet area.

Are they going to seal the closet, so it is not accessible from the unit?

 

[Paul K Moy]

I see no impact. Both bedrooms have closets. Is there like storage room with outside access?

I see no problem.

Is this sell or refinance? or other?

The reason I ask is because you could ask buyer if it is a problem. You could ask homeowner if it is a problem.

This is for asset valuation for the HOA. Of the units I saw, most of them were tenant occupied, only one was owner occupied, and she was not happy about it. She said that she is consulting with an attorney that focuses on HOA law, so there definitely is an issue.

Yes, there is a storage room, however it is located somewhere else in the condo development.