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Third Parties Claim To "external Obsolescence" - The Whole Street!

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DeprivationDiddy

Thread Starter
Freshman Member
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Nov 7, 2018
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General Public
State
Ohio
This is in regards to the concept of "External Obsolescence" in a residential neighborhood.

Can a non-owner, or a group of non-owners (neighbors) claim that a neighboring residential property that has been "grandfathered" as a multifamily use in a single family district is adversely effecting their property values by imposing upon all the neighboring properties an external obsolescence?

In other words, is it possible for a grandfathered use on one property to impose obsolescence upon other properties, nearby?

I think not. The external obsolescence concept is such that it can only apply to the subject property, correct?
 

NP_MAI

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Apr 10, 2018
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Certified General Appraiser
State
Florida
That is incorrect. Think about a neighborhood next to a landfill or superfund site. Maybe a bunch of homes that back up to a power plant, trailer park, cell tower, or some other ugly or undesirable object.

Yes, a non-conforming structure that is viewed upon poorly can have an adverse effect on values if it is perceived by the buyer pool as undesirable.
 

Pittsburgh Pete

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Certified General Appraiser
State
Pennsylvania
That is incorrect. Think about a neighborhood next to a landfill or superfund site. Maybe a bunch of homes that back up to a power plant, trailer park, cell tower, or some other ugly or undesirable object.

Yes, a non-conforming structure that is viewed upon poorly can have an adverse effect on values if it is perceived by the buyer pool as undesirable.

What he said!
 

DeprivationDiddy

Thread Starter
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Ohio
That is incorrect. Think about a neighborhood next to a landfill or superfund site. Maybe a bunch of homes that back up to a power plant, trailer park, cell tower, or some other ugly or undesirable object.

Yes, a non-conforming structure that is viewed upon poorly can have an adverse effect on values if it is perceived by the buyer pool as undesirable.
So on the one hand, the government understands that unless the use has been abandoned, condemned, or destroyed, the use must be allowed into perpetuity in regard to the owner's property rights, hence the existence of the current nonconforming use. On the other hand, and at the same time, the neighborhood can claim that use at the subj prop is negatively affecting their values? That seems like a contradiction in and of itself. The use is not a power plant, or cell tower, or something ugly. It is a residential use in a residential zone. It is a use that was at one time 100% legal. I don't see how every neighbor on the street has a claim to external obsolescence. Further, how far does that claim reach? Can every home in the city make the claim just because one parcel has been grandfathered? Certainly not.

If your position is correct, every appraisal that is done in the city (county?, state?) has to adjust their value downward because one property on one street has been grandfathered.
 

Elliott

Elite Member
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Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Is this about property taxes? Owners of property can try to advance any theory they want to get their taxes reduced. Then again if they are making stuff up and it doesn't pertain to market value, then its just an argument that in the long run won't be accepted by the assessor or a board of equalization or a tax court.
 

NP_MAI

Senior Member
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Certified General Appraiser
State
Florida
So on the one hand, the government understands that unless the use has been abandoned, condemned, or destroyed, the use must be allowed into perpetuity in regard to the owner's property rights, hence the existence of the current nonconforming use. On the other hand, and at the same time, the neighborhood can claim that use at the subj prop is negatively affecting their values? That seems like a contradiction in and of itself. The use is not a power plant, or cell tower, or something ugly. It is a residential use in a residential zone. It is a use that was at one time 100% legal. I don't see how every neighbor on the street has a claim to external obsolescence. Further, how far does that claim reach? Can every home in the city make the claim just because one parcel has been grandfathered? Certainly not.

If your position is correct, every appraisal that is done in the city (county?, state?) has to adjust their value downward because one property on one street has been grandfathered.
Whoa now, don't put words in my mouth. You asked if it was possible, I answered that it certainly is possible. You are confusing legally permissible with a completely different issue (external obsolescence). Plenty of uses are legally permissible and could adversely effect the value of neighboring properties.

If you would like to know if there is external obsolescence and the extent of the effect that it may have on a given property or properties, I am sure there are plenty of qualified residential appraisers on this forum that would be willing to quantify (provide an appraisal) for you for a reasonable fee.
 

Pittsburgh Pete

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Professional Status
Certified General Appraiser
State
Pennsylvania
If your position is correct, every appraisal that is done in the city (county?, state?) has to adjust their value downward because one property on one street has been grandfathered.

Sorry, but this statement is patently absurd. Me thinks you don't quite grasp the idea of external obsolescence.
 

DeprivationDiddy

Thread Starter
Freshman Member
Joined
Nov 7, 2018
Professional Status
General Public
State
Ohio
This is about my sister who has been calling me in tears because she rents a unit at the subject property and recently the neighbors have been appealing to the City in hopes of regulating the use into a single family (and no longer multifamily) use. Thereby forcing her landlord to terminate her lease and reduce the number of units at the subj property. The neighborhood's main thrust is the subj of this thread. They claim the subj prop is forcing external obsolescence on all the surrounding properties, which I believe is a total misunderstanding of the concept. I've been telling her their claim is incompetent and not substantial.
 

DeprivationDiddy

Thread Starter
Freshman Member
Joined
Nov 7, 2018
Professional Status
General Public
State
Ohio
Sorry, but this statement is patently absurd. Me thinks you don't quite grasp the idea of external obsolescence.
Methinks you aren't following along, yet.

I agree that it's absurd. I'm saying the neighborhood's take on the concept is absurd and that a legally permissible use on one parcel doesn't force 'external obsolescence' on all other nearby parcels.
 

NP_MAI

Senior Member
Joined
Apr 10, 2018
Professional Status
Certified General Appraiser
State
Florida
Maybe, maybe not. I've never heard of a grandfathered use being un-granfathered due to unhappy neighbors. Whether their claim is legitimate has nothing to do with the legal side of the equation. Also, if the landlord (owner) of the property doesn't put up the bucks to hire an attorney to defend himself, it could get ugly.
 
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