Unpermitted Garage Conversion

[rs1784]

Subject property has an unpermitted garage conversion. Per appraisal:

A large portion of the subjects original garage was converted to a living area noted on the building sketch as a bedroom and the laundry room behind it. The conversion was not permitted
per online records. However, the area is assessable from the interior of the main dwelling in a functional manner, has a permanent and sufficient heat source and was built in keeping with
the design, appeal and quality of construction of the main dwelling in a workman like manor. The remainder of the garage was noted as storage on the building sketch.

I did see below guideline:

The Appraiser must treat room additions and garage conversions as part of the GLA of the dwelling, provided that the addition or conversion
space:

• is accessible from the interior of the main dwelling in a functional manner;
• has a permanent and sufficient heat source; and
• was built in keeping with the design, appeal, and quality of construction of the main dwelling.

Based of above the appraiser did address all 3 of the bullet points. I found something online that also stated to

1. Verify that appraisal photos/comments confirm:
a. Conformance to subject property and market.
b. Completed in a workman like manner.
d. No safety/soundness issues.

Is there anything else that is needed to be verified? Also does this require a comparable sale with a similar unpermitted area to be selected?

Thanks

 

[Terrel L. Shields]

Also does this require a comparable sale with a similar unpermitted area to be selected?

If you can find one. I'd comment the extent of the search if you didn't find one.

 

[Surf Cat]

When I've run into these, the heating, stove (if natural gas) are almost always never vented properly. Thus, heath and safety issue. Also, if zoning requires 2 car covered parking, there's that too. When I run into a non-permitted addition, like an enclosed patio, I always provide a comp or 2 with similar attributes for a market reaction.

Gas stoves, gas heaters in garages......subject to removal and capped gas lines (the gas lines running to the garage are also an issue as those are typically not done to code either).

 

[jay trotta]

Subject property has an unpermitted garage conversion. Per appraisal:

A large portion of the subjects original garage was converted to a living area noted on the building sketch as a bedroom and the laundry room behind it. The conversion was not permitted
per online records. However, the area is assessable from the interior of the main dwelling in a functional manner, has a permanent and sufficient heat source and was built in keeping with
the design, appeal and quality of construction of the main dwelling in a workman like manor. The remainder of the garage was noted as storage on the building sketch.

The Appraiser must treat room additions and garage conversions as part of the GLA of the dwelling, provided that the addition or conversion
space:

• is accessible from the interior of the main dwelling in a functional manner;
• has a permanent and sufficient heat source; and
• was built in keeping with the design, appeal, and quality of construction of the main dwelling.

Based of above the appraiser did address all 3 of the bullet points. I found something online that also stated to

1. Verify that appraisal photos/comments confirm:
a. Conformance to subject property and market.
b. Completed in a workman like manner.
d. No safety/soundness issues.

Is there anything else that is needed to be verified? Also does this require a comparable sale with a similar unpermitted area to be selected?

Thanks

Is this a Review?
IMO-the question is; if there are No Permits, how can you verify the "Safety & Soundness" issue's?

 

[J Grant]

Subject property has an unpermitted garage conversion. Per appraisal:

A large portion of the subjects original garage was converted to a living area noted on the building sketch as a bedroom and the laundry room behind it. The conversion was not permitted
per online records. However, the area is assessable from the interior of the main dwelling in a functional manner, has a permanent and sufficient heat source and was built in keeping with
the design, appeal and quality of construction of the main dwelling in a workman like manor. The remainder of the garage was noted as storage on the building sketch.

I did see below guideline:

The Appraiser must treat room additions and garage conversions as part of the GLA of the dwelling, provided that the addition or conversion
space:

• is accessible from the interior of the main dwelling in a functional manner;
• has a permanent and sufficient heat source; and
• was built in keeping with the design, appeal, and quality of construction of the main dwelling.

Based of above the appraiser did address all 3 of the bullet points. I found something online that also stated to

1. Verify that appraisal photos/comments confirm:
a. Conformance to subject property and market.
b. Completed in a workman like manner.
d. No safety/soundness issues.

Is there anything else that is needed to be verified? Also does this require a comparable sale with a similar unpermitted area to be selected?

Thanks

Normally yes, fannie or FHA and UW wants to see a min of 2 comp sales having a similar or equivalent non permitted area to show market acceptance. Someitmes they are tough to find and an appraiser can end up including two oddball comps just to bracket the not permitted area , but it fulfills the requirement.

 

[J Grant]

Is this a Review?
IMO-the question is; if there are No Permits, how can you verify the "Safety & Soundness" issue's?

Except for a short FHA checklist of us turning on stove and AC etc, how does an appraiser verify safety and soundness issues ? That is not our job, we are not code inspectors. In both a permitted house or in a non permitted area, there can be safety or soundness issues. If we observe one, then we comment/report it and make report either subject to or recommend an inspection.

But if we do not visually observe an issue, we can not assume one is present or absent . If is the decision of Fannie and Freddie and FHA to accept non permitted areas, and now the entities also accept illegal zoning additions and such. Gotta keep expanding the loan volume, right? So if they are willing to fund more risky properties, then that is on them. All we can do is comment that no permits were found for converted garage or other, and that though the area appears finished in a workmanlike manner, an inspection is recommended.

Recommend inspection gave them a heads up. If a user or unintended user opts not to inspect, that is on them.

 

[Zoe]

Additionally, your local jurisdiction may require it conform to code before it can be sold. Some jurisdictions have no building code or code enforcement. Real property taxes are involved also because an addition impacts tax assessment value if tax assessor picks it up.

It depends on where the subject is and local jurisdiction rules and laws. HOA rules could be involved also.

I agree with all the above posts.

Some issues would apply regardless if it was being done for the homeowner or any type mortgage loan. The client would have no bearing on your analysis and application in your MV opinion.

Some jurisdictions and HOA's are very strict on what can and cannot be done.

 

[Tom D]

big old city where probable 90% of remod something, or improved sheds, were done without permits. i asked l&i what they do if something is done without permits. answer, once done, there was nothing that they would do. now that being said, the only safety issue could be the electric wiring, what else would be a safety issue on a row home? if i went anal on things done unpermitted in this city, there would be no loans. never saw a listing saying something done to the house was unpermitted.
that being said, that is my area, you all do what you think is your best business decision.

 

[Zoe]

big old city where probable 90% of remod something, or improved sheds, were done without permits. i asked l&i what they do if something is done without permits. answer, once done, there was nothing that they would do. now that being said, the only safety issue could be the electric wiring, what else would be a safety issue on a row home? if i went anal on things done unpermitted in this city, there would be no loans. never saw a listing saying something done to the house was unpermitted.
that being said, that is my area, you all do what you think is your best business decision.

Code enforcement like it is today in many jurisdictions didn't even exist years ago. There are very nice vacation and lake and river homes in TN where there is no code period. You build what you want. However, if you are an appraiser and you see an issue that is obvious problem like a safety issue, it needs to be corrected.

That is also why when somebody does new updates or repairs to a house, sometimes things have to be brought up to code for the updates and additions to be completed.

 

[jay trotta]

Except for a short FHA checklist of us turning on stove and AC etc, how does an appraiser verify safety and soundness issues ? That is not our job, we are not code inspectors. In both a permitted house or in a non permitted area, there can be safety or soundness issues. If we observe one, then we comment/report it and make report either subject to or recommend an inspection.

But if we do not visually observe an issue, we can not assume one is present or absent . If is the decision of Fannie and Freddie and FHA to accept non permitted areas, and now the entities also accept illegal zoning additions and such. Gotta keep expanding the loan volume, right? So if they are willing to fund more risky properties, then that is on them. All we can do is comment that no permits were found for converted garage or other, and that though the area appears finished in a workmanlike manner, an inspection is recommended.

There, you gave them a heads up. So if a user or unintended user opts not to inspect, that is on them.

IMO-a line or two that the subject meets Code Compliance for the municipality or state requirements. Turning on a stove, lights etc., IMO-should include a comment regarding License Law per State requirements regarding a Home Inspector(s) vs appraiser observation requirement.
But, you do you