So Who Is Repsonsible To Verify Permits?

[Mark K]

Phil is exactly right!

I haven't participated in this forum for a while because of this problem. Express your opinion that varies from that of the majority, or merely from that of the vocal, frequent posters, and you're called lazy, stupid, incompetent, etc. Maybe being lazy or stupid applies to appraisers that fail to accept or realize that there is more than one correct way to appraise a property and that typical appraisal practice varies in different regions of the country.

As to the original point, I wonder how far back this permit inspection process is supposed to go? To the original house? How about repair permits? Well permit? Septic permits? Occupancy permit? Driveway cut permits? Walking through this door opens you up to a whole new world, one that at least in this part of the country can take hours per house and then what do you do when you find out that the county or state never issued a driveway cut permit but the house has been there for years? Mark illegal, or legal non-conforming? Fat chance. I've questioned permits once in my experience. A 16 x 20 yard barn that the owner drywalled, carpeted, put in a kitchen, and ran an extension cord for power so his son could live in it. Told him to provide to me or the lender a building permit if he wanted any value assigned to it. In this area, the same as many others, permits are not a big issue.

The best point made in this post is "what about pulling permits on the comps?". How do you know you're comparing apples to apples if you fail to pull permits on the comps to determine if they are legal? Or are assumptions being made that they are in fact legal? Does failure to pull permits on comps make you stupid or lazy?

So maybe before spouting off about the lack of intelligence or poor work ethics of other appraisers, a better question might be "whats typical in your area?"

 

[Mike Garrett RAA]

I would call your attention to USPAP 2005, page 18 at line 588 which addresses Scope of Work:

Comment: The scope of work is acceptable when it is consistent with:

the expectations of the participants in the market for the same or similar appraisal services; and

what the appraiser's peers' actions would be in performing the same or a similar assignment in compliance with USPAP.




Who are your peers?

 

[Rudy Canoza]

Originally posted by Gregory Abell@Jun 1 2005, 03:03 AM
Are the permit pullers also pulling the permits on their comparable sale data?

Sometimes I do if I don't trust the Realtor®. I always disclose the information. Cheap insurance if I get reviewed...

/But that's just me. I also have auto insurance, health care insurance, E&O insurance, and life insurance...

 

[Bobby Bucks]

Originally posted by Mark Keutzer@Jun 1 2005, 08:51 AM
Express your opinion that varies from that of the majority, or merely from that of the vocal, frequent posters, and you're called lazy, stupid, incompetent, etc.

Well said. Even so we must be thorough. I had an assignment yesterday for a custom built dwelling which had an open area with 6 columns....it was tastefully done and won an award several years ago in the local builder association's new homes contest. I was suspicious...not only did I demand permits, but I demanded to see the original copy of the architect's credentials who designed the dwelling. The borrower got upset, so did the lender.....still it's better to be safe than sorry...who knows, one of the fixtures in here might end up reviewing the report....they certainly have the spare time.

 

[Karl]

Our MLS sheets say "buyer to verify" works for me. 90% of homes here have "Modifications" Somethings you CAN do without permits & other things you can NOT. Anyone involved in the tranaction that has concerns as to the need for permits SHOULD contact the officials in that particular department. Different modifications MAY/or may NOT need permits from different state or local government athuorties.

(Permits Also depends on IF your a native or a newcomer & how much you have contributed to the local campaigns, AND IF that contribution went to the winner or loser)

 

[OCApp]

i generally don't go down to the city or county offices to verify permits. if there is an addition, i'll point that out to the client (usually the lender. i'll say that i haven't verified or viewed any permits, and if it's a concern to the client/l)ender they should confirm permits with the proper governmental authority. in other words, let the property owner provide the permits to the client.

i also point out that i'm not a general contractor and therefore i'm not qualified to determine if it's been completed per code and in a workmanlike manner.

 

[Farm Gal]

Ummm Folks? The old guy and I despite having very different opinion as to what we personally do in OUR MARKETS.... fully concurr:

Paul has it right! But those qualifiers shoudl be tempered by

Peer actions and geographic competency!!!
Both of which SHOULD revolve around market actions!!! If the local buyers are sensitized to an issue, then it bears investigation and reporting. If the buyers don't care and there are no know or anticipated adverse jurisdictional sanctions, I wouldn't go to any extremes!

Many 'issues' like this become HOT topics after a local situation which hits the papers... in which case, the buyers tend to react for some period of time and the appraisers had best show a greater degree of dilligence. Older appraisers have seen such cycles: they get resolved by new regulations or fade away over time. Matters not, our job is to observe and report what the MARKET does.

Placing all the responsibility on the Title company when an appraiser is fully ( or shuld be fully) aware that a serious degree of "marketability" or "rebuildability" concern is extant is just plain foolish. Ignoring your and peer's level of awareness is even more so, cause an expert witness can surely be called to make you appear really REALLY negligent!

I know that in some counties in my mid-west location, unpermitted additions can variably be:
Mandated for teardown (at owner expense) or
Taxed but impermissible for rebuild if 'major damage' occurs to the structure or
Required to be brought up to permit status and code or
Cheerfully ignored (kinda depends on who you are related to ).

Do I pay attention to which jurisdiction my subject is located in when I stumble across a situation which may be a problem? OH YEAH!

Do I disclose the potential 'defect' or 'situation' and advise the cleint to acquire additional PROFESSIONAL or JURISDICTIONAL opinion? Also OH YEAH! Ball is hten in thier court.

It is my opinion that it is best to know the rules, the players, the probable plays, and then let the referee's duke out the resulting issues.

Observe and report. YES.

DEMAND, Obscure and deceive ? :blink:

Not me.

You all do whatever your market and your conscience dictate.

 

[Mike Garrett RAA]

There is nothing wrong with a statement like.....

"A 14' x 20' addition has been added to the subject. It appears to have been done in a workmanlike manner, is heated, and the appraiser has included this space in the gross living area (GLA)".

I would suggest that most appraisers IN MY MARKET are not qualified to determine whether or not an addition is done to code or completed per the permit. They can; however, observe whether or not it is in conformity with the rest of the improvement and what the market reaction is to this feature.

Repeat after me....I am an appraiser. I am not a home inspector, not the permit police, not a contractor, not an expert in environmental issues, and not an engineer. My expertise lies in estimating market value which is based on the markets participant's perception of the value of certain features. It is not scientific but rather an art or craft which I have honed, based on years of experience, IN MY MARKET.

Of course for those who are engineers and home inspectors the above does not apply!

 

[Phil Rice]

If the buyers don't care and there are no know or anticipated adverse jurisdictional sanctions

I would go so far as to say if the buyers don't care, then it does not matter if there are any aniticipated sanctions. Our primary concern is market value. Anticipated sanctions could affect the loan value, and therefore, maybe should be disclosed in the report, BUT

if the buyers don't care, it does not affect market value.

I believe there could be some markets where buyers do care about permits, but I have never seen it.

 

[Joker]

What's a permit?
I think that's what we used to call a temporary driver's license when we were in high school. :rofl:

There is one town here that requires a building permit but there are no inspections, it's simply a construction tax. Who's to know if something was "permitted" or not? It's your property, you should be permitted to do whatever you want with it.