Should the appraisal note any unpermitted construction?

[BRCJR]

That the OP was able to obtain the permit after the fact shows that the structure was indeed "permissible" and was not an illegal use that would affect the HBU analysis. So the damages that could be attributable to the sellers not disclosing, the buyer not inquiring and the appraiser assuming it could remain are going to be limited to the effect on value of the cost and effort involved of obtaining the permit retroactively.

Moreover, researching the *entire* building permit history at the city of Pasadena might still involve a process that can take 30 days and which would *not* be within the normal course of business for residential appraisers operating in this region. The last time I did anything there the online database only went back to (if I recall correctly) 1986; permits issued prior to that were stored offsite on microfiche and had to be researched by staff (not anyone from the public) separately.

Maybe things have changed since the last time I was in there (a couple years ago, for a commercial property) so I don't claim to know what's current there. But all you out-of-state appraisers who aren't familiar with exactly what comprises the normal course of business outside of your own region should qualify your remarks accordingly.

True. True. Many Appraisers make extraordinary assumptions in replies without proper identification of such and expect the reader to know such as well.

 

[Mike Kennedy]

I bought a 2bed 1ba house about three years ago. I refinanced the house about one year ago.

I found out early this year the garage is supposed to be a carpot and is not permitted. To make things worse, present code requires any new garage to be a 2 car garage and I do not even have the space for that. After a real fight with the city I managed to get the approval for the reconstruction according to code of the garage for only 1 car as it was. jose

Based on the info presented, as of the Effective Dates of Appraisal in 2010 (purchase) and 2012 (refinance) the carport to 1C garage conversion represented an illegal use - "not permitted" quoted by City personnel.

Further investigation may (or many not) reveal the conversion took place prior to the implementation of the City's Building Ordinance.

In that event the conversion would likely have been a legal, non-conforming use in 2010 and 2012 which pre-existed Building Ordinance requirements. This also likely provided the basis for the City's "Ruling" below:

Negotiation evidently resulted in a determination of a 2013 NOW-Legal, Non-Conforming Use i.e. a 1C garage vs current requirement for a 2C garage.

 

[Mark K]

But all you out-of-state appraisers who aren't familiar with exactly what comprises the normal course of business outside of your own region should qualify your remarks accordingly.

Never!

And I think I can search around on the internet and cut and paste a bunch of stuff that nobody will read that will prove my point.



Maybe the OP should contact his/her broker or the perpetrator/builder (previous or previous-previous owner) also if they're looking for someone to blame.

One has to wonder exactly how far back in time the appraiser is supposed to go to determine if the electrical service entrance panel that was upgraded from 60 amp fuse box to 100 amp panel had the proper permit?

Or to see if there was a permit for the new roof shingles?

Or the upgraded kitchen or bath?

Or the replacement vinyl windows?

Or the the possibly permitted, partially finished basement?

Etc., etc.....

According to some, appraisers should research the entire dwelling and compare it to the original plans on file to see what has changed over the years, discover when the changes were made, and demand copies of all permits for any and all alterations. At that point, the appraiser should then investigate what regulations controlling the building permits were in place at the time of the modification and report whether or not the dwelling is currently "legal".

If you want to be part of the Permit Police force, do it right.

 

[George Hatch]

http://www.ci.pasadena.ca.us/planning/buildingservices/


14.04.030 Violations.

All sections in the codes referenced in Section 14.04.010 herein pertaining to violations are amended in their entirety to read as follows:
It shall be unlawful for any person, firm or corporation to erect, construct, enlarge, alter, repair, move, improve, remove, convert, or demolish, equip, use, occupy, or maintain any building or structure in the City, or cause same to be done, contrary to or in violation of any of the provisions of this chapter. Any person, firm, or corporation violating any of the provisions of this Ordinance, shall be deemed guilty of a misdemeanor, and each such person shall be deemed guilty of a separate offense for each and every day or portion thereof during which any violation of any of the provisions of this Ordinance is committed, continued, or permitted, and upon conviction of any such violation such persons shall be punished by a fine of not more than one thousand dollars ($1,000) or by imprisonment for not more than one (1) year, or by both such fine and imprisonment.​

In addition to the above penalty provisions, violation of any of the provisions of this chapter may be subject to the administrative proceedings set forth in Chapter 1.25 of this code.​

(Ord. 7127 § 4 (part), 2007)​

(Ord. No. 7201, § 3(D), 12-6-2010)​

City of Pasadena Municipal Code
http://library.municode.com/index.aspx?clientId=16551

I'm not arguing that it would be illegal today to build an unpermitted structure. What I'm telling you is that when the conversion was done a permit might not have been required. The city saying they have no permit on file is not necessarily synonymous with an illegal addition.

That he was apparently able to get the permit after the fact addresses the "permissibility" of the structure. That he had a use for the structure when he bought it speaks to the idea that the feature had contributory value to the whole.

 

[Mike Kennedy]

\

I bought a 2bed 1ba house about three years ago. I refinanced the house about one year ago. No problems with the appraisal in any of them. Both appraisers indicated the house had a 1 car detached garage.

I found out early this year the garage is supposed to be a carpot and is not permitted.

What I am trying to figure out is this, shouldn't the appraisal report indicate this discrepancy between city and county records and the real thing?
jose

Yes. Both the 2010 and 2012 appraisal reports should have addressed the discrepancy between what existed and what was permitted (i.e. legal use) per Municipal Records. Due diligence research would have likely had the following results:

1. the garage conversion took place prior to implementation of the City's Building Ordinance - i.e. a legal, non-conforming pre-existing use - appraisal valuation "as-is".

OR

2. conversion of a carport to a 1 car garage would have required a building permit and C.of O./Compliance and research of Municipal records "during the normal course of business" was inconclusive due to lack of availability of older/dated record storage methods and additional research by the Client directly or via a contracted Title Company was necessary and recommended. Market Value Opinions for the site "as improved" with the house and the existing 1 car garage based on the Extraordinary Assumption that required Municipal C.O./Compliance existed and "subject to" Municipal Compliance as of both effective dates of appraisal.

OR

3. conversion of a carport to a 1 car garage would have required a building permit and certificate of occupancy/compliance and Municipality data confirmed neither required document was recorded or reported in 2010 or 2012 - appraisal valuation based on the Hypothetical Condition that the required C.O. existed on the effective date of both the 2010 and 2012 appraisals and Market Value Opinions "subject to" Municipal Compliance - as of both effective dates.

All three opinions should have also included advisory statements that should the Client have concern - direct contact with the Municipality is recommended and should additional conflicting information be provided by the Municipality re-appraisal may be required.

 

[JSmith43]

One has to wonder exactly how far back in time the appraiser is supposed to go to determine if the electrical service entrance panel that was upgraded from 60 amp fuse box to 100 amp panel had the proper permit?

I did an FHA appraisal where a shiny new 100 amp panel was in place. There was evidence of "mickey mouse" wiring that made me wonder if an electrician actually did the work. First thing I did was look at the service coming to the meter. Two wire!! The panel was upgraded, but not the service.

 

[George Hatch]

Yes. Both the 2010 and 2012 appraisal reports should have addressed the discrepancy between what existed and what was permitted (i.e. legal use) per Municipal Records. Due diligence research would have likely had the following results:

1. the garage conversion took place prior to implementation of the City's Building Ordinance - i.e. a legal, non-conforming pre-existing use - appraisal valuation "as-is".

OR

2. conversion of a carport to a 1 car garage would have required a building permit and C.of O./Compliance and research of Municipal records "during the normal course of business" was inconclusive due to lack of availability of older/dated record storage methods and additional research by the Client directly or via a contracted Title Company was necessary and recommended. Market Value Opinions for the site "as improved" with the house and the existing 1 car garage based on the Extraordinary Assumption that required Municipal C.O./Compliance existed and "subject to" Municipal Compliance as of both effective dates of appraisal.

OR

3. conversion of a carport to a 1 car garage would have required a building permit and certificate of occupancy/compliance and Municipality data confirmed neither required document was recorded or reported in 2010 or 2012 - appraisal valuation based on the Hypothetical Condition that the required C.O. existed on the effective date of both the 2010 and 2012 appraisals and Market Value Opinions "subject to" Municipal Compliance - as of both effective dates.

All three opinions should have also included advisory statements that should the Client have concern - direct contact with the Municipality is recommended and should additional conflicting information be provided by the Municipality re-appraisal may be required.

Mike,

With respect, what you and I are disagreeing over literally amounts to a difference between our respective geographic competency. I'm familiar with what levels of information appraisers have access to during the normal course of business and I'm familiar with what passes for typical practice in this region.

You are apparently assuming the conversion would be readily noticeable to the average appraiser during the course of their onsite inspection. You're also apparently assuming the carport was enclosed illegally even though you don't know when that happened or if those regs were in play at that time or if the city was enforcing them at that time.

Neither you nor I know when this improvement was made, what it looks like or what the workmanship is like when compared to other garage stuctures on properties of similar aged construction in this region.

I wouldn't have thought to question the permit status of such a structure and in any case whether of not the carport enclosure had a permit would have very little bearing on either the value or marketability of a home in Pasadena. Garage sizes are not reported in our public records feeds, so this is not comparable to a situation where an appraiser sees an apparent room addition that increases living area beyond that indicated in those records.

And one more time - "not permitted" is not synonymous with "not permissible". He got permits after the fact so they obviously were permissible. It's self evident.

 

[Mike Kennedy]

OP "Both appraisers indicated the house had a 1 car detached garage."

1. "I found out early this year the garage is supposed to be a carpot and is not permitted."

2. "After a real fight with the city I managed to get the approval for the reconstruction according to code of the garage for only 1 car as it was."

Unless the OP returns and provides more details on both - assumptions have been made by both "teams" in this discussion.

 

[Delta85]

As everything starts with the appraisal before you get the loan confirmed, that is why I am asking.

thanks!
jose

The process starts way before the appraiser. Was there a realtor involved? Did the seller disclose this? Did a building inspector catch this? Did YOU do your due diligence as a buyer? I just tossed out multiple people that probably should have known or found out about this well before any appraiser was asked to appraise them home.

 

[rowdydog]

The difference between an appraiser and a good experienced appraiser.