Un-permitted Garage Conversion

[CANative]

17.58\\PARKING SPACE REQUIREMENTS BY LAND USE

Use or Activity


Spaces Required

1.One-family dwellings - 2 spaces per dwelling unit

2. 2nd dwelling unit (per Chapter 17.65) -1 space per dwelling unit

Sounds like 3 garage spaces are required.

 

[hastalavista]

I didn't see a requirement for enclosed (garage) parking in any of the excerpts.

Did I miss it?

I see "parking spaces" are required.
Must a "parking space" be in an enclosed structure typically known as a "garage"?

 

[hastalavista]

Normally, I would give a cost to cure to remove all contents of the kitchenette, remove all interior walls, remove the bathroom, and re-install a garage door. This would restore the garage back to its original design and value would still be given to the garage. Does this sound correct? Any other recommendations on how to handle this??

(my bold)

No, unless that is how the market reacts.

Is the assignment as-is?

What I recommend is that you contact your client (before you do that, re-read their assignment-conditions; some lenders require non-permitted garage conversions to be made "subject to" conversion back to the original condition) and ask them how they want this to be handled.
Their response should be:
A. Appraise the property as-is (which means C2C may or may not be part of the valuation analysis).
B. Appraise the property subject-to garage conversion permit (which means you value it as-if the garage conversion was permitted) or subject-to restoration back to its original garage utility (both require an HC).

What their response shouldn't be is "Adjust it based on the cost to reconvert and count it as a 2-car garage" unless that cost to reconvert is the market reaction to the non-permitted conversion... which I would bet it probably isn't.

Good luck!

Edit to Add: Ok, I missed this part of your second post:

This assignment is for a refinance. The client states in the engagement letter that this situation is acceptable. However, as always I need to thoroughly explain all issues, if it is typical in the subjects market, any impact on marketability, and if any health or safety issues were present at the time of inspection. That's really the only guidance from the client. Thank you for your input

(my bold)

That makes it easy. Appraise as-is. C2C may not may not be the market reaction; the property may have more value with the garage conversion than without it.
Don't arbitrarily make adjustments to convert something back to what it was if that is not how the market reacts.

Again, good luck!

 

[ZZGAMAZZ]

Is HBU best reflected by the current improvements if the non-permitted conversion results in an improvement that does not pass all 4 tests?

Does the JA typically require conversion of a non-permitted area back to its original and legal use/configuration, prior to a transfer--like a very few JA's do in SoCal?

Does market reaction trump HBU if that type of physical status readily exists in the local market?

 

[CANative]

I didn't see a requirement for enclosed (garage) parking in any of the excerpts.

Did I miss it?

I see "parking spaces" are required.
Must a "parking space" be in an enclosed structure typically known as a "garage"?

Probably need to speak with community development or planning department staff. The closest I could get was an FAQ:

What is needed to apply for a garage conversion permit?

Plans are required and off street parking and set back requirements must be met. If the converted garage is going to be used as a bedroom, the conditions of UBC Section 1204 must be adhered. In most cases, a Special Inspection is required before the building permit is issued.

For brochures contact the Building Division at(661) 326-3720.

 

[J Grant]

I just completed an inspection on a small older home with a detached 2 car conversion. I have confirmed through the local Assessor and Building Department that the conversion is not permitted. The conversion features a kitchenette including a gas stove/range, a full bath, and a bedroom. Similar un-permitted additions are not typical in the subjects market. Although not typical, there is little market data suggesting any adverse effect on market value. Normally, I would give a cost to cure to remove all contents of the kitchenette, remove all interior walls, remove the bathroom, and re-install a garage door. This would restore the garage back to its original design and value would still be given to the garage. Does this sound correct? Any other recommendations on how to handle this??

Appraise as is, since lender does not want it subject to retrofit. Based on your comments above, this illegal (illegal as in non permitted), conversion to living area is not typical of area. Check with RE agents, but it is more probable, since it is atypical, that most buyers want a garage that functions as a garage, not as non permitted living area in this market.

First thing is to interview some agents..how do they think most buyers would react? Would most buyers want a working garage? Which means, depending on C2C (if motor and tracks are still in place, etc), a good many buyers might pay a bit less for this since they have to pay to put it back to functional garage, or at best not pay any more for it.

I would provide a cost to cure estimate, even if it is appraised "as is". IF nothing else, will help you determine market reaction to a degree...if C2 C is $1000 to remove drywall and kitchen, that is marginal, and might not affect value much, if C2C is $5000 to install motor, tracks get it re inspected to working condition and possibly replace garage door, that is an amount that might affect value if most buyer preference is for a working garage.

The area has some value in market as a garage, albeit a garage with some repair issues to typical buyer perhaps. ( and if most lenders would require retrofit to working garage if a sale, could affect value to buyers)

 

[timd354]

I just completed an inspection on a small older home with a detached 2 car conversion. I have confirmed through the local Assessor and Building Department that the conversion is not permitted. The conversion features a kitchenette including a gas stove/range, a full bath, and a bedroom. Similar un-permitted additions are not typical in the subjects market. Although not typical, there is little market data suggesting any adverse effect on market value. Normally, I would give a cost to cure to remove all contents of the kitchenette, remove all interior walls, remove the bathroom, and re-install a garage door. This would restore the garage back to its original design and value would still be given to the garage. Does this sound correct? Any other recommendations on how to handle this??

What if your client needs an appraisal of the proeprty "as-is"?

 

[PropertyEconomics]

What if your client needs an appraisal of the proeprty "as-is"?

A cost to cure taken as a functional adjustment would render the value "as is" would it not?

 

[J Grant]

A cost to cure taken as a functional adjustment would render the value "as is" would it not?

What is a functional adjustment? An adjustment is supposed to be market based (market reaction to feature or defect or condition).

While a C2C can be a good secondary check on credibility of a market derived adjustment, the two are not interchangeable. Market reaction can be more than, less than, or equivalent to the c2 c .

An estimated c2c is to provide client with additional information for decision making purposes.

 

[Mike Kennedy]

re "as-is"

appraisal "as-is" - there is NO cost to cure because "as-is" IS "as-is". "as-is" must be a legally permissible, transferrable use under HABU.

Can someone kindly post the definition of Highest and Best Illegal Use from either the USPAP, a State's appraiser's Law, or a recognized appraisal industry text. Thanks in advance.