Safety Issues

[wyecoyote]

Seems a thread got started on the ask an appraiser about safety issues. I wanted to get some input on safety issues and thought that it would be good to kick around here in the general forum on how you as an appraiser handle safety issues.

My typical appraisal practice, I point the issues that I see out to the homeowner. Like one I had yesterday a balcony 9-10 feet off the ground no railing access from a bedroom and from a stairwell outside the house. I call this to the attention of the Homeowner stating that if anyone falls of the balcony even if they are on the property illegaly the can be sued. I also state this in my report that there is no railing on the balcony area and that this is a safety issue. Reasoning the most homeowners I discuss this with are unaware of the issue or that they can be sued. I bold the statement in the addendum and on page 1 of the URAR. I do not make the appraisal report subject to repairs of the safety issue. What I find is that 99% of the time the underwriter will require the safety issue to be corrected prior to funding the loan. I have not yet had a LO ask me to take that out of the report or "write" it so it will not be required by the underwriter. But then again I deal with Credit Unions and Local Banks whose LO's are paid hourly not on commision.

So how do you as an appraiser deal with the safety issues and please provide some examples or use this as a hypothetical.

Ryan

 

[George W Dodd]

Ryan,

The same way, unless the problem is so bad as to seriously impact the appraisal (leaking roof) and then I subject the appraisal to that repair/replacement. Always give the client a heads-up so they know what they are dealing with.

On a similar note: I read an article a while back from Henry Harrison, about HUD regulating Fannie and Freddie that stated that a property had to meet HUD's minimum property standards but I am unable to find that article -- Does anyone else remember? Or have a copy of that article?

 

[Joe Birrell (NY)]

There used to be such a thing as the three "S's" i.e. Safety, Sanitary, and Structural. If the property is deficient in these areas it's "subject to" and
the items are listed. The example you gave is a typical safety issue and
I would call for it to be repaired.

 

[larryhaskell]

Ryan:

I agree completely with Joe and I think your situation serves as a good example. What concerned me most though was that you appeared to be giving legal advice to the borrower. I don't believe it is our responsibility to inform the borrower that they may be sued for an unsafe condition. Let the LO earn their money. Besides, if there is ever a lawsuit, the borrower will not remember one thing you said to them. I believe that if lenders knew what possible liability they faced they would want items fixed. That is why I let the underwriter worry about any unsafe item. I actually have a client that will not permit me to enter a property alone if there is personal property inside. We can enter vacant homes on a lock box. They actually infor their LOs that we can't go inside for potential liability reasons.

 

[Restrain]

If you're going to advise a homeowner about safety items, couch it in terms of "you might want to consider". That way, you are not giving legal advise. As to physical deficiencies, safety hazards, I would make it as is, figuring the cost to cure in the physical depreciation and condition areas, and comment in the report. If they want it fixed, the UW will say so.

 

[Frederick R. Ruffell]

If there is, in my opinion, a heath and safety issue I make my report subject to the inspection and clearance by an appropriate professional. My report, my way, and I always provide lots of photos. Never had a problem yet and have never had an appropriate professional disagree with my call.

 

[bobburnitt]

Is there some way this topic can be inserted into the one called "Help a poor LO before she kills her appraiser?????????

Same thing.

BB

 

[wyecoyote]

Bob,

I started this thread to see how appraisers handle safety issues and get their input. Just their input as to how they handle them and a brief explanation of why. The other thread that you were talking about "help a LO" had several points about what the appraiser did or didn't do correctly and other points to the LO that started the thread.

I thought that this would be a good way to get new ideas. Simply because I am always intersted in how other appraisers approach items ie.. like the thread about effective age. There were several good arguments for using effective age and several for not. My IMHO that there is no one way to write an appraisal report or approach an issue. I have mine but am always willing to learn or hear of new ideas and ways.

Plus I thought that this would be good for breaking up some of the rants that go on in here about the same day to day issues (I know that I am guilty of coming in here in the past to complain about something). Although there have been some good ongoing discussions about other issues I just wanted one that would be brief and to the point.

So In short those are my reasons for starting this as a seperate thread and making it a total seperate thread.

Ryan

 

[CathCoy]

But then again I deal with Credit Unions and Local Banks whose LO's are paid hourly not on commission.

Now what the heck does this mean?! :wink:

The original post (mine) that led to this discussion about safety issues, really had LITTLE to do with the safety issue but more with how an appraiser handles the delivery of the information. The borrower calls me and says, "what're you trying to DO to me?!" The borrower, an intelligent person, does not use the room in question for sleeping, and so wonders why he's being asked to make a costly alteration to his property. Having not talked to the appraiser FIRST, I don't know what the heck he's talking about and, four days later, I still don't know what the FACTUAL issue is.

Anyway, safety issues are non-issues. I deal with them ethically and straightforwardly. Common sense, however, DOES appear to be an issue, with the particular appraiser I hired, that is.

 

[bobburnitt]

Cath,

The deal is, they COULD use the room for sleeping.

I really didn't even read much of the other post (topic), too much of the same old, same old.

It would be the same thing if these borrowers said "we never go out on the balcony".

If someone were to burn alive in that room, the appraiser is more likely to suffer repercussions from that than you are. The appraiser is responsible for spotting safety issues, environmental, blah, blah, blah.

Although, I must say that I have finally learned to try to NOT EVER discuss ANYTHING with the borrower. The lender (you) is THE client. I just put it in the report and ship it. You can read all about it there, and then YOU can inform the borrower.

BB