Un-permitted Garage Conversion

[23Degrees]

The "problem" is that most appraisers understand the concept. But MK thinks if permits are required then the improvements are illegal until permits are obtained.

Look at zoning and building codes. The word "Illegal" almost never appears in the code language. And when it does it almost always pertains to people, not buildings.

The bigger problem for at least one person who claimed to have been burned by that question is how others saw his responsibilities as it pertained to certifying "legal" for "zoning compliance". Your point is well taken with regard to how codes are written and would lead to the question as to why appraisers are stuck with those terms by the forms.

If some appraisers are going to get stuck at the HBU due to permit issues then that isn't our problem. Change the language of the next question to what was suggested and IMO you eliminate a whole range of potential liabilities while still satisfying the needs of the assignment and anything of reasonable intent by the GSE's.

That is an atrociously worded question from the perspective of an appraiser. If anyone wants to argue that the wording on the forms of that question should stay as is and not be modified to something along the lines suggested I'd be interested in hearing that argument.

 

[Mike Kennedy]

[FONT=&quot]Highest and Best Use: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, and financially feasible and that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. (The Dictionary of Real Estate Appraisal, 4th Edition Appraisal Institute, Chicago, IL.) [/FONT]

 

[Mike Kennedy]

City of Bakersfield, CA

http://www.bakersfieldcity.us/cityservices/community_development/building/adopt_building_code.html

"Also, any construction, additions, plumbing and electrical work being done without a building permit is also a violation.
http://www.bakersfieldcity.us/cityservices/community_development/FAQ/codeenforce.htm




another California Example: 9. I need additional living space and can’t afford to construct an addition. Can I just convert my garage into living space? Converting attached garages into living space is a common practice and can be achieved in many cases. Careful planning must be used to meet numerous requirements. The first obstacle is replacing the parking spaces some where on your property that the original garage provided. The Planning Division will review your plans to ensure the parking spaces are restored and in an appropriate location. The second typical obstacle is meeting the building code requirements. Living space must meet more stringent requirements than a garage. Examples are a moisture barrier for the concrete floor and walls, insulation in the walls and ceiling, heating, electrical upgrades, light and ventilation requirements to name just a few. Normally a homeowner hires an architect to assist in this process to provide cost effective solutions to these and other issues.
http://www.co.contra-costa.ca.us/FAQ.aspx

 

[Mike Kennedy]

more CA info on illegal garage conversions

http://buildingpermitslosangeles.com/illegal-garage-conversion-tragedy/


Bakersfield - illegal garage conversions

http://www.kerngoldenempire.com/sto...-home-projects/d/story/UtSgkSsqB0yfPbdQTVXxcQ

Azusa CA - illegal garage conversions

"An illegal garage conversion occurs when a property owner or tenants alters or modifies their garage for living purposes without obtaining the proper approvals or permits from the City. Altering or converting a garage into a living area is a violation of the California Health and Safety Code Sec.17920.3 and the California Building Code Sec. 105.1.

When a garage is illegally converted into living quarters, serious health and safety issues can be created. Improperly installed electrical wiring may cause fires, improper venting of water heaters may cause asphyxiation resulting in possible death, and plumbing installed not according to the Building Code may lead to other health hazards. Other health and safety issues associated with illegal garage conversions may include not having the proper number of emergency exits or windows, not having fire resistant construction materials, and insufficient fire prevention systems or smoke alarms.

In addition to safety concerns, illegal garage conversions can also affect the quality of life in your neighborhood. Improper and illegal occupancy of a converted garage .......>
http://www.ci.azusa.ca.us/index.aspx?NID=986


Mendocino County CA
If you are in violation of a code section covered by the Infraction Citation Procedure, you will be issued a "Notice to Appear" citation. You will be allowed 21 days to correct the violation without any penalties being ***
essed by the Courts.

If the violation is corrected during this period and you obtain a "Certification of Correction" from the Code Enforcement Division and present proof of correction to the court, the citation may be dismissed.

If the violation is not corrected prior to your court appearance date, the courts will assess appropriate fines and penalties.Penalties for infractions are set by the court andmay be up to $1,000 for each offense. Nonpayment of any penalty may cause a warrant to be issued for your arrest by the appropriate Justice or Municipal Courts.

Examples of code sections that are covered by the Infraction Citation procedure may include construction without a required building permit, failure to comply with a STOP WORK ORDER issued for un-permitted construction, occupancy of a structure prior to or without a Certificate of Occupancy, erecting a sign without a permit or in violation of County Zoning Codes, storing of inoperative or abandoned vehicles in violation of the County Code or establishing a use not permitted pursuant to County Zoning Codes. "

http://www.co.mendocino.ca.us/planning/pdf/Code_Enforce_FAQ.pdf

SO.CAL MUNI COMPLIANCE ATTORNEY
http://www.illegallaconversions.com/garages_guest_houses.html


St. Petersburg, Florida

Illegal Dwelling Units
Dwelling units that have been added to the interior or the
exterior of a structure withou
t proper permits are illegal,
regardless of how long the units have existed. The city will
require closure of such units.

http://www.stpete.org/stpete/Top_10.pdf

Pinellas County, Florida

Why do I need a permit?
Per Chapter 1 of the Florida Building Code and section 553.79 (1), Florida Statutes: Any owner, authorized agent, or contractor who desires to construct, enlarge, alter, repair, move, demolish, or change the occupancy or occupant content of a building or structure, or any outside area being used as part of the building’s designated occupancy (single or mixed) or to erect, install, enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system, the installation of which is regulated by the technical codes, or to cause any such work to be done, shall first make application to the building official and obtain the required permit for the work.
http://www.pinellascounty.org/build/FAQ.htm

and

"101.4.2 Building.
The provisions of the FloridaBuilding Code shall apply to the construction, erection, alteration, modification, repair, equipment, use and occupancy, location, maintenance, removal and demolition of every public and private building,
structure or facility or floating residential structure, or any appurtenances connecte
d or attached to such buildings, structures or facilities. Additions, alterations,
repairs and changes of use or occupancy group in all buildings and structures shall comply with the provisions provided in Chapter 34 of the Florida Building Code"

109.1
Any person, firm, corporation or agent who shallviolate a provision of this code, or fail to comply therewith, or with any of the requirements thereof, or who shall erect, construct, alter, install, demolish or move any structure,electrical, gas, mechanical or plumbing system, or has erected, constructed, altered, repaired, moved or demolished a building, structure, electrical, gas, mechanical or plumbing system, in violation of a detailed statement or drawing submitted and permitted there under, shall be guilty of a misdemeanor of the second degree and a violation of the Pinellas County Code. Each such person shall be considered guilty of a separate offense for each and every day or portion thereof during which any violation of any of the provisions of this code is committed or continued. Upon conviction of any such violation such person shall be punished within the limits as provided by State laws and local ordinance."
http://www.pinellascounty.org/build/PDF/fbcadmin.pdf

 

[CANative]

You still aren't getting it Mike.

 

[PropertyEconomics]

Possibly (assuming that the cost to cure equals the value of the functional deficiency, which may or may not be the case), but most of the time when I have seen a cost to cure in an appraisal report in similar situations, the appraisal is completed "subject to" even though the lender requested and needs an appraisal of the property in its "as is" condition.

Points well taken .... but the cost to cure the item would allow it to be returned to a "legal conforming" status from a "valuation" standpoint ... perhaps there could be additional ep to complete the conversion ... and in the best of worlds there would be comparables to measure from ... my understanding is there were not. The "as is" value would recognize the cost to cure the item if the jurisdictional authority required it ... which could be done prior to closing (no affect on value) or after closing (potentially having an effect on value).

This is somewhat of a difficult assignment and conversations with the client would be necessary.

 

[PropertyEconomics]

[FONT=&quot]Highest and Best Use: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, and financially feasible and that results in the highest value. The four criteria that highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. (The Dictionary of Real Estate Appraisal, 4th Edition Appraisal Institute, Chicago, IL.) [/FONT]

And WHERE is legal use or highest and best use mentioned in the definition of "market value"?
Are you telling me a property not developed to its highest and best use, or which has an illegal conversion such as a garage, has NO market value? Is that what you are saying?

 

[CANative]

"Cost to cure" doesn't change anything about the property. That's the point.

 

[Rlong]

I would be tempted to call it out for what it is.. Point out that to "cure" would cost "x" but that is somewhat offset by the value gained back by the 2 car garage. In addition, by taking out the range and toilet... One could get a retroactive permit and call it their pottery, woodworking shop.

Allot of valid stuff has been pointed out, but i often think appraisers tend to make mountains out of mole hills. Our local municipality would make them remove the range AND possibly disable the plumbing . But they could then likely get an OK for the interior walls (iif built to code)

They still "lost a garage" in value! And gained nothing if market does not support "casitas" or there "or their hobby shop".

I hate these type properties; the biggest problem is they don't pay enough!!

Bob in CO

 

[J Grant]

a property could have code violations and still be in zoning compliance. They are two separate questions and two separate issues. If the property has original footprint, and it's zoning is residential, then it is yes, in zoning compliance.

There may be a code violation and there may be lack of permit for converting garage. Lenders are typically more sensitive about garage conversions because of safety hazard possible issues and code violations about the firewall separating garage from dwelling. Whoever told you on client side that it is "okay", the UW may think differently and require report "subject to". But if client directive is as is, and not subject to, then so be it. These appraisals are annoying but not too difficult, they tend to have similar issues around them as the last few did..