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Unpermitted Additions
- Thread starter Terraform
- Start date
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Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
FHA FAQ from 9/2014:
http://portal.HUD.gov/hudportal/docu...a_09-18-14.pdf
Q. Are creative construction techniques limited to the subject dwelling only, or to other detached structures as well?
Example: incomplete structures or structures built without permits.
A. The property must meet HUD`s Minimum Property Requirement protocol and meet all local jurisdictional codes.
Outbuildings, garages, etc., must be in compliance as well.
http://portal.HUD.gov/hudportal/docu...a_09-18-14.pdf
Q. Are creative construction techniques limited to the subject dwelling only, or to other detached structures as well?
Example: incomplete structures or structures built without permits.
A. The property must meet HUD`s Minimum Property Requirement protocol and meet all local jurisdictional codes.
Outbuildings, garages, etc., must be in compliance as well.
Tim Hicks (Texas)
Elite Member
- Joined
- Jan 15, 2002
- Professional Status
- Certified Residential Appraiser
- State
- Texas
We cities that do post construction permits. Make the appraisal subject to a proper permit provided.
Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
Okie Dokie
Example
St. Petersburg Florida
"Dwelling units that have been added to the interior or the exterior of a structure without 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
Violations and Penalties.
Any person who shall violate any provision of this building code or fail to comply therewith or with any of the requirements thereof or any order of the Building Official, or who shall erect, construct, alter, demolish or move any structure, or has caused or allowed to be erected, constructed, altered, repaired, moved or demolished a building or structure in
violation of this building code, may be punished as provided in Section 1- 7, City Code
or as otherwise allowed by law.
The imposition of a penalty does not prevent the revocation or suspension of a license, permit or franchise, or the imposition of civil fines or other administrative actions, including action pursuant to Chapter 162, Florida Statutes, as amended.
g. Requirements Not Covered by Code.
The Building Official may impose any additional requirements necessary for the strength, stability, safety or proper operation of an existing or proposed building, structure, electrical,
gas, mechanical or plumbing system, or for the public safety, health and general welfare, not specifically required by this or the other technical codes.
h. Occupancy Violations.
Whenever any building, structure, premises or equipment regulated by this building code is being used in violation of the provisions of this building code, the Building Official may order such use discontinued and the structure, or portion thereof, vacated by serving written notice on any person causing such use (e.g. the owner, tenant, occupant or their agents) until such use complies with the requirements of this building code. Such person shall discontinue the use within the time prescribed by the Building Official after receipt of such notice.
http://www.stpete.org/stpete/Chapter8changes.pdf
Should the OP post the actual Municipality, I'll be glad to assist him in a similar manner.
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Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
Review of the Ops posts - indicated an address, as he himself is located in Florida, a quick addy search yielded "City of Tampa". Assuming the subject property is located in that city >>>>>> See >>
"5-110.06 Failure to obtain a certificate of occupancy
5-110.6.1 It shall be unlawful for the owner or any other person to occupy the building or portions of the building unless a certificate of occupancy is obtained.
5-110.6.2 Should occupancy occur prior to the issuance of a certificate of occupancy, or if the owner fails to obtain a certificate of occupancy upon being served notice, the building official may, thirty (30) days after serving written notice, in addition to other remedies of law, order the disconnection of utility service to the building, structure, or portions of a building.
(Ordinance 2009-27 3;.2-19-09)
5-113: "Violations and penalties"
see: "misdemeanor of the second degree, separate offense for each and every day ......etc".
https://www.municode.com/library/fl...CO_S5-110CEOCCOSEUT_PTICEOCCO_5-110.6FAOBCEOC
"5-110.06 Failure to obtain a certificate of occupancy
5-110.6.1 It shall be unlawful for the owner or any other person to occupy the building or portions of the building unless a certificate of occupancy is obtained.
5-110.6.2 Should occupancy occur prior to the issuance of a certificate of occupancy, or if the owner fails to obtain a certificate of occupancy upon being served notice, the building official may, thirty (30) days after serving written notice, in addition to other remedies of law, order the disconnection of utility service to the building, structure, or portions of a building.
(Ordinance 2009-27 3;.2-19-09)
5-113: "Violations and penalties"
see: "misdemeanor of the second degree, separate offense for each and every day ......etc".
https://www.municode.com/library/fl...CO_S5-110CEOCCOSEUT_PTICEOCCO_5-110.6FAOBCEOC
Meandering
Elite Member
- Joined
- Feb 26, 2006
- Professional Status
- Real Estate Agent or Broker
- State
- Pennsylvania
Unpermitted gas is always dangerous,
especially if preceded by chili, or hard boiled eggs.
.
CANative
Elite Member
- Joined
- Jun 18, 2003
- Professional Status
- Retired Appraiser
- State
- California
Kennedy is gish galloping again.
Here's what Fannie Mae expects:
Highest and Best Use
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use of the site as improved. If the current improvements clearly do not represent the highest and best use of the site as an improved site, it must be indicated on the appraisal report.
The appraiser determines highest and best use of a site as the reasonable and probable use that supports the highest present value on the effective date of the appraisal. For improvements to represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.
The appraiser’s highest and best use analysis of the subject property should consider the property as it is improved. This treatment recognizes that the existing improvements should continue in use until it is financially feasible to remove the dwelling and build a new one, or to renovate the existing dwelling. If the use of comparable sales demonstrates that the improvements are reasonably typical and compatible with market demand for the neighborhood, and the present improvements contribute to the value of the subject property so that its value is greater than the estimated vacant site value, the appraiser should consider the existing use as reasonable and report it as the highest and best use.
Here's what Fannie Mae expects:
Highest and Best Use
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use of the site as improved. If the current improvements clearly do not represent the highest and best use of the site as an improved site, it must be indicated on the appraisal report.
The appraiser determines highest and best use of a site as the reasonable and probable use that supports the highest present value on the effective date of the appraisal. For improvements to represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.
The appraiser’s highest and best use analysis of the subject property should consider the property as it is improved. This treatment recognizes that the existing improvements should continue in use until it is financially feasible to remove the dwelling and build a new one, or to renovate the existing dwelling. If the use of comparable sales demonstrates that the improvements are reasonably typical and compatible with market demand for the neighborhood, and the present improvements contribute to the value of the subject property so that its value is greater than the estimated vacant site value, the appraiser should consider the existing use as reasonable and report it as the highest and best use.
Randolph Kinney
Elite Member
- Joined
- Apr 7, 2005
- Professional Status
- Retired Appraiser
- State
- North Carolina
So the takeaway from Fannie is that comparable sales that are typical and compatible with market demand (sales with and without building permits) and the improvements (as-is) contribution to value is greater than the site as vacant, the property is at its HBU.
How about that? Fannie buying loans on properties that have additions or modifications without the benefit of a building permit would explain why there are sales and resales of such properties in the open market. That and lack of enforcement of permits by the local authority.
It would appear that market forces along with mortgage lending trump the textbook definitions of highest and best use as interpreted.
Meandering
Elite Member
- Joined
- Feb 26, 2006
- Professional Status
- Real Estate Agent or Broker
- State
- Pennsylvania
My text book said legally permissible, not legally permitted.
The garage might be legally permissible, but the builder did not apply for a permit to build it. With the garage, it might be at its highest and best use of the land, so bulldozing the unpermitted garage would mean the land is not being put to it's legally permissible, highest and best use.
Remedies vary across municipalities, from the owner filling in an application and an inspection, to a fine, to a requirement to bulldoze and start over. The remedy for where it is needs to be addressed.
.
The garage might be legally permissible, but the builder did not apply for a permit to build it. With the garage, it might be at its highest and best use of the land, so bulldozing the unpermitted garage would mean the land is not being put to it's legally permissible, highest and best use.
Remedies vary across municipalities, from the owner filling in an application and an inspection, to a fine, to a requirement to bulldoze and start over. The remedy for where it is needs to be addressed.
.
Mike Kennedy
Elite Member
- Joined
- Sep 28, 2003
- Professional Status
- Certified Residential Appraiser
- State
- New York
Part B, Origination Through Closing
Subpart 4, Underwriting Property
Chapter 1, Appraisal Requirements, Appraisal Report Assessment
April 15, 2014
Printed copies may not be the most current version. For the most current version, go to the online version at
https://www.fanniemae.com/singlefamily/originating-underwriting. 575
Highest and Best Use
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use
of the site as improved. If the current improvements clearly do not represent the highest and best
use of the site as an improved site, it must be indicated on the appraisal report.
The appraiser determines highest and best use of a site as the reasonable and probable use that
supports the highest present value on the effective date of the appraisal. For improvements to
represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.
Next, read FNMA 1004 Appraiser's Certifications #1 and #25.
Subpart 4, Underwriting Property
Chapter 1, Appraisal Requirements, Appraisal Report Assessment
April 15, 2014
Printed copies may not be the most current version. For the most current version, go to the online version at
https://www.fanniemae.com/singlefamily/originating-underwriting. 575
Highest and Best Use
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use
of the site as improved. If the current improvements clearly do not represent the highest and best
use of the site as an improved site, it must be indicated on the appraisal report.
The appraiser determines highest and best use of a site as the reasonable and probable use that
supports the highest present value on the effective date of the appraisal. For improvements to
represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.
Next, read FNMA 1004 Appraiser's Certifications #1 and #25.
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