Unpermitted Additions

[CANative]

"ordinances" include both Zoning and Building Codes; some municipalities incorporate the building ordinance into the Zoning Ordinance, others have 2 distinctly separate ordinances. "Legally permissable" must be as of an Effective Date of Appraisal. Either a subject properties improvements and occupancy ARE confirmed as Legal under either a combo Z&B ordinance (or separate ordinances), or EA or HC invocation is appropriate. It's really not difficult folks. CAVEAT: the above is applicable in Municipalities which HAVE Zoning and Building Ordinances.

Please post a link to a city or county ordinance that links use and/or building permits to an appraisal and specifically to an effective date. Thanks in advance.

 

[23Degrees]

"ordinances" include both Zoning and Building Codes; some municipalities incorporate the building ordinance into the Zoning Ordinance, others have 2 distinctly separate ordinances. "Legally permissable" must be as of an Effective Date of Appraisal. Either a subject properties improvements and occupancy ARE confirmed as Legal under either a combo Z&B ordinance (or separate ordinances), or EA or HC invocation is appropriate. It's really not difficult folks. CAVEAT: the above is applicable in Municipalities which HAVE Zoning and Building Ordinances.

my red

Again - you are not distinguishing between "legally permissible" and "legal (read - zoning compliance on the forms)". Its like I'm reading a recipe that views sugar and vinegar as equal and keeps switching back and forth between the two words.

If the two were viewed as the same why have two separate questions. HBU covers "legally permissible" and "zoning compliance" covers "legal". We can argue about the the ramifications of how the "legal" question is asked or if it should even be asked without much better limiting conditions but even big fat Fannie seems to have recognized there are two issues here.

 

[CANative]

I don't want to make a fool of myself Mike. Maybe I'm missing something in your posts over the years.

What are you trying to say exactly?

 

[23Degrees]

The repetitive citation and posting of AO-28 needs to be addressed. The range of action constituting verification of "legal status" across the country is extremely wide. In some areas the assessors office or other department within the jurisdiction will publish the documented use of the property as well as specific physical characteristics such as living area. It is perfectly acceptable to rely on those records within a SOW and is status quo in these market areas - people are not running to the courthouse on every assignment where the subject matches public records to confirm every last instance of compliance with all codes. There is a reason why statement 1 is present in the forms and why appropriate (and hopefully better written) statements of limiting condition would be present in a non GSE report. In these cases the AO would be referring to an SOW where the appraiser purposefully neglects to examine that data per client directive and while this is possible it is just not something that would be done by any responsible appraiser or any non brain dead appraiser and in these cases the point is basically moot until the subject doesn't match the typically relied upon records. And at that point, yes I agree with you Mike, a properly applied HC or EA could become part of the SOW.

The AO cited becomes far more relevant for areas of the country where these records are not available or not readily available and where it is more feasible that an appraiser would neglect the duties typical for their peers whether at the directive of the client or not. So basically the continued citing of this AO within the context of considering assignments in general applies the worst case scenario to every assignment in every part of the country and that is just not appropriate, practical or reasonable.

 

[Mike Kennedy]

Page 352 "The Appraisal of Real Estate"

Illegal Uses

http://appraisersforum.com/showpost.php?p=2433114&postcount=41

 

[CANative]

http://appraisersforum.com/showpost.php?p=2433114&postcount=41

Okay, I guess I wasn't missing anything.

An improvement that represents a legal use IS a legal use regardless of the current BUILDING permit status.

If this is the partial garage conversion thread (I can't remember now) then the change to the improvements made the house a little larger and the garage a little smaller. Sounds like a legal use and I can't think of any reason why it might not be.

It seems to me that what you are saying is that anytime an appraiser comes across a property with a physical change to the improvements and there is no record of a building permit then the appraisal must be conditioned on obtaining the permit because until the permit is obtained the use is illegal?

Is that what you're saying?

 

[Terraform]

Hi Cali,

I don't think post 2 was serious, it was a jest, and an appropriate one given my tendencies toward believing AMC input(dick move Blueprint) . And I think that you are not arguing with Mike, because Mike is not contributing any of his own thoughts in any of his posts. My OP was simple. But no one can actually solve the problem because there seems to be no definitive answer. Welcome to the world of appraisal practice!

 

[23Degrees]

OK - Now I see where you are getting this stuff and it is completely depressing. You have cited a much relied upon resource and in the end I guess that means you might win the battle but it makes little sense to inflict this absence of thought on appraisers throughout all markets. I don't know who wrote that section but after the first paragraph there is a complete breakdown of logic.

The Appraisal Institute’s Appraisal of Real Estate itself defines highest and best use as “the reasonably probable and legal use of vacant land or an improved property that is legally permissible, physically possible, appropriately supported, financially feasible, and that results in the highest value.”

The use of the term legally permissible is a common thread throughout any definition of HBU you can find.

Notice the use of the word OR when referring to improved property and how suddenly the defining term is "legally permissible" rather than "legal".

Why use the term legally permissible which is an adjective with adverb qualifier rather than just use the lone adjective "legal" or make use of the word legal as the operative adjective with concrete adverb qualifier such as "completely". The operative adjective in the phrase "legally permissible" is permissible which is defined as can be permitted or allowable or can be allowed. Notice the word "can".

OK AI bashers here's your chance - go and dissect the contradictory nonsense in Mike's link after the first paragraph and use their own definition of highest and best use to do it. Too easy. Another complete embarrassment for the industry.

Whether you agree with me or not, the last paragraph in that post uses the same argument Mike uses and goes against what many other posters have written including leelansford ([url]http://www.idfpr.com/dpr/re/ILLAppr/IllinoisAppraiserMarch2012.pdf[/URL]) who knows a thing or two about the subject, Randolph, myself, and anyone else who has argued that if available one can, if necessary, extract market data for unpermitted additions and perhaps other items in order to determine market value "as is". Sometimes not the best of ideas or paths but to say that lack of a permit always means that opining market value is not possible is ludicrous. If the AI is the final authority on this, and maybe even other topics if this is an example, then we are all in trouble.

 

[CANative]

My OP was simple. But no one can actually solve the problem because there seems to be no definitive answer.

The answer to your question, as phrased, is NO. As I originally posted.

 

[Randolph Kinney]

Is this an immediate dis-qualifier for FHA loans?

Hi Cali,

I don't think post 2 was serious, it was a jest, and an appropriate one given my tendencies toward believing AMC input(dick move Blueprint) . And I think that you are not arguing with Mike, because Mike is not contributing any of his own thoughts in any of his posts. My OP was simple. But no one can actually solve the problem because there seems to be no definitive answer. Welcome to the world of appraisal practice!

Did you call HUD/FHA? They can answer your question.

In fact, if you don't analyze what the market response is and show it in your appraisal report, you can be sanctioned.

See this link for the FAQ: http://portal.HUD.gov/hudportal/documents/huddoc?id=pafaq_01-22-13.pdf

Near the end it says:

What are requirements for garage conversions or room additions without permits?

FHA does not require permits. The property must remain marketable.