unpermitted addition

[Scott R Marshall]

Ugh!! This is the tricky part of the business we are in. As you can see, there have been some differing opinions, primarily those who are permit police and those who are not. In addition, there is some concern over legal, legal nonconforming and illegal use. I do not know if I would have checked the illegal box and performed an "as-is" appraisal. Did you calculate a cost to cure (removal of said addition and repair). In my opinion, this is a difficult thing to do and as a result, I probably would have either A) turned down the assignment once the illegal use was confirmed or B) CB4'd it based on the required permit. As it was for FHA/HUD, I probably would have opted for choice A as the deal is dead unless the permit is issued, something which cannot be guaranteed, but it is a business decision.

My concern also has to do with the legal, legal nonconforming and illegal check boxes. While I agree that at times it is fairly easy to determine whether a use is legal or illegal, there comes a point where we open ourselves up to liability when pulling permits and commenting on use.

I will use my market as an example. In some jurisdictions, the only way a hot water heater or furnace can be replaced is if a permit is issued allowing the owner to do so. Does that mean that in every instance where a property has had these items replaced I must research permits? What if the owner doesn't know? In some local jurisdictions, certain types of foliage are not permitted and/or lots can have only so much grass coverage. Does that mean that I need to measure lawns and become a qualified botanist? I can go into many other examples.

In the ever changing world of zoning rules and regulations and changes in local code, is the appraiser supposed to be abreast of every change in the areas in which they appraise? If that is the case, then I believe we should all be sitting in on every single city council meeting.

While there are some who may believe this stance is excessive, I fully adhere to the notion of if you believe in performing this research in one instance, by necessity you need to perform it in every instance. If you do not then you alone are the barometer for when to do it and when not to do it. I do not work for planning and zoning, I am not a home inspector, I am not a member of my city council, I am not a botanist, zoologist, archeologist, paleontologist or for that matter a proctologist.

I almost see this as a no win situation. If you do not pull permits, you could get in trouble. If you pull some permits but not all permits, you may get in trouble. If you believed in your heart of hearts that you gathered all permits and researched all known zoning laws but missed one, you could get in trouble. I guess you can CB4 every single appraisal you do. Good luck with that!!

 

[Randolph Kinney]

They still require an inspection to get a retro permit, don't they?

Yep, the but the guy tells me the construction does not have to be done by a licensed contractor. They do check electrical, mechanical and plumbing for code however, not like they do during construction. They spot check and if they find anything wrong, they shift to deeper, more detailed level of inspection. If the workmanship is crap, they will make you tear it down.

Many of these guys come up from Mexico and it is typical that they will add on to their homes as they feel the need. The city of San Diego is very tolerant because of that.

 

[Randolph Kinney]

Ugh!! This is the tricky part of the business we are in. As you can see, there have been some differing opinions, primarily those who are permit police and those who are not. In addition, there is some concern over legal, legal nonconforming and illegal use. I do not know if I would have checked the illegal box and performed an "as-is" appraisal.

You have to discuss everything addressing the likelihood that the property will fail to pass a retro permit process. You do this in the knowledge of the city policy and what your comparables tell you. The "as-is" value is what exists. If you can determine serious code violations that would require repair or tear down, you would appraise it subject to, along with the as-is value. That difference tells the reader how serious the problem is.

If you opine that the addition is workmanlike and is likely to pass a retro permit process, that is what you state in your as-is opinion of value. It then becomes an UW call. Let them make it a requirement for the borrower to obtain permits.