Subject to vs. illegal use?

[Mike Kennedy]

Mike,

If the 'as if' HC were used it would be salable to the secondary market once the conditions of the HC were completed and cleared by the UW.

When an HC is used it is not necessary for the appraiser to price out the cost of the repairs.

Suggest that is SOW issue.

 

[Webbed Feet]

Mr Thornburg,

A couple of clarification questions:

<bold>Just set forth in BOLD that this appraisal is made, at the direction of the client, on the basis of the subject being converted back to a SFR as a HC. All adjustments would include the costs, etc.</bold>

If I'm basing the value on the subject having already been converted as an HC, the adjustments won't need to be made, would they?

Correct. Once "Based" on the HC "the subject is a SFR" you use appropriate SFR comps.... Hence, no adjustments for "cost" to convert back to SFR.

Also, given the HC then being as described - removal of barrier between the ersatz "units" and removal of kitchen - I would then leave the second kitchen off the sketch, right? Just as in Couch Potato's new construction, I would place all the rooms where they will be eventually...do I then state specifically how the sketch differs from current reality on the addendum? Which is to say, is stating it enough without creating a schematic?

Once under that HC, my view is you no longer have a "Complex" assignment that appraising the illegal use would be. However, you undoubtedly have a complex "Report" to produce and it cannot be misleading. This is a charge more situation in my mind. I like most all the prior posts. But my page one, after my cover page, would be a word processing document going over loud and clear what the reality is about the property. I would even include a sketch of the reality so a reader could visualize the current state of the improvements versus the HC I would be using. I would state the following "Form" is "Based" on the HC and all checkboxes reflect the HC and not the reality.

Also, I checked your location, Portland. So I understand that every city this has to be in has very strict zoning codes about this kind of nonsense. And you have me concerned. First, because you did not bother to tell us about your SOW. A sin so many posters keep making I tire of it. Is this a refinance, a sale, a REO, for Fannie, what? Because working with the client these things matter! If the first two, your client has the cart ahead of the horse here if your client cannot provide you with what would be plans and specifications for the reversion remodeling!

I sure as hell hope you are not taking it upon yourself to specify what has to be done to reach a legal reversion, what specific materials are to be used, what electrical and plumbing is needed, what specific "condition" will be the result... In otherwords, exactly how can you use an HC for such a project if you do not have specs for the reversion remodeling? Because you are the appraiser, not the owner, or the contractor, or the buyer, or the city code inspector. I will not be surprised at all to see you post back that your client thought you could whip out a HC, all on your own, without any remodeling specs from anyone, and then you could later hand them a 442 saying it was all perfect to what YOU specified. If this just happens to be the case, you and your client, and all involved, need to swap that horse and buggy into their proper places before you can proceed. Your client cannot loan on that illegal improvement, you can't provide an appraisal of a hypothetically remodeled improvement unless your client can provide you the hypothetical specifications for the remodeling that are to be completed that will satisfactorily meet code inspections and permits.

Well, if the client is expecting you to create the remodeling specs I guess you could do it... But you should plan on getting a pistol to use for shooting yourself in the foot later. Unless you also happen to be a contractor / city code inspector / permit specialist that is.

Webbed.