Unpermitted Accessory Dwelling Unit Issue

[cstu11]

Do they want you to acknowledge the adu or specifically write "permitted adu"?

It doesn't have to have its own co and be rentable to be an adu.

The issue was that that they wanted a comp with an ADU because per Fannie Mae definition it was an ADU. It didn't matter to them that a permitted ADU had more value to the market and required an adjustment. My lesson is that if there's a stove in the unit - permitted or not - I need to include a comp with a stove in the unit.

 

[cstu11]

You have a rec room converted into an ADU. At least the rec room is legally permitted. I'd include a legal ADU & a non-permitted ADU sale in the grid to show market acceptance. I would not call the rec room a legal ADU. Rather, a non-permitted conversation through explanation.

This is exactly what I did.

 

[cstu11]

You can not report it as permitted if it is unpermitted. However, your job is to develop and report the value, as defined, of the subject property. Your job doesn't include being a code enforcement officer. You can certainly break out the contributory value, if any, of the ADU in such a way that the Client can use the information to make their own decisions.

The issue wasn't related to value at all. I gave the unpermitted ADU value in the original report, but wasn't understanding that Fannie Mae requires an ADU comp is the subject fits Fannie Mae's definition of an ADU.

 

[Zoe]

We have some really strict code enforcement departments in more than 1 suburban municipality of Memphis. It is easy to call code if a permit was not pulled and them come out and see if it conforms to code. I am not calling code enforcement to come out. That is the owner's responsibility. I can verify if a permit was pulled or not with code. That is all I can do.

We also have many areas in Tennessee that have no code enforcement whatsoever...............................

If I see a safety hazard or something that does not meet code, I can require it to be repaired like no railing around a big drop, no hand rails on stairs, exposed wiring, no fence around a pool, etc.

 

[ilsindaco2628]

Need some advice since I have received several revision requests asking me to call it a permitted ADU on the grid and include a permitted ADU comp.

The subject was permitted as a rec room with a half bath. The owner put in two bedrooms, a full bathroom, and a kitchen without a permit (no certificate of occupancy so it cannot be legally rented). In my report, I described it accurately and included a comp that is permitted as a rec room like the subject, giving no value for the unpermitted kitchen.

The issue is that the reviewer is wanting me to call it a permitted ADU in the report and find a comparable with a permitted ADU. I believe this would be unethical because the value of a rec room with an unpermitted kitchen has much less value in the market than a permitted ADU which can be legally rented out. If I were to use the reviewer's logic then any garage that someone puts a kitchen and bathroom into without permit needs to be valued the same as a permitted ADU.

What are you thoughts?

If I get an assignment with an ADU I turn it down.


I keep getting revision requests for homes with finished basements that have full baths or a kitchenette with a million questions about ADUs. Lenders out of nowhere seem to have a hard on for them.