Unpermitted Garage Conversion

[redfish]

The biggest fault I have seen in appraisals with converted space included in GLA is that homes without converted space similar in GLA to the subject are included. I'd make sure there is ample support for the selection of comparables.



From HB 4000.1


The Appraiser must analyze and report differences in functional utility when selecting
comparable properties of similar total GLA that do not include converted living space. If
the Appraiser chooses to include converted living spaces as GLA, the Appraiser must
include an explanation detailing the composition of the GLA reported for the comparable
sales, functional utility of the subject and comparable properties, and market reaction.

 

[redfish]

We aren't permit policeman.

 

[Fritz in NY]

I see this all the time, Coverting garage into In Law Quarters etc. Adding to GLA. BUT,
Other than reaching out to a Civil Servant/Appointee in Assessor/Building Dept. ,How have you dealt with "Grandfathers Use", where is it documented in your market?

 

[J Grant]

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

Since I am not a code inspector, why would I know, or comment on whether a subject meets code compliance?

If I turn on eclectic and water I state utilities are working.

 

[Dublin ohio]

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

I have areas. Where zoning or pud restrictions require a 2 car garage. A conversion whether done with or without permits. Would create a non conforming illegal use.

 

[Terrel L. Shields]

was built in keeping with the design, appeal, and quality of construction of the main dwelling.

I've yet to see more than 2 or 3 garage conversions that were truly the same design, appeal or quality as the main dwelling.

First a step down from wood subfloor to slab floor. I've seen GDO's disguised with plastic green vines and flowers. Many have frame or vinyl siding over the old door whereas the rest of the dwelling is brick veneer. The CHA was not updated to handle the extra cooling and heating needed. A large rug or vinyl floor covering unlike the rest of the house. Windows are minimal. Usually 1, sometimes zero. Insulation is missing over the garage.... on and on.

 

[Mark K]

I've yet to see more than 2 or 3 garage conversions that were truly the same design, appeal or quality as the main dwelling.

I've seen a few that were very well done, no step down, same ceiling height, quality finish work. You could tell if you were looking, otherwise, most people wouldn't notice. Lots of conversions in certain areas around here, usually no permits.

However, in general, the value of the additional living space just about offsets the reduction in value due to the loss of a garage. Pretty much a wash unless they've built another garage.

 

[Fernando]

You have to look at the market in how it treats nonpermitted conversion.
I won't admit that I have one but market would give it value.
I never advertise it to be in gross area or an additional bedroom, but market likes it in my market as a rental benefit.

 

[Sandra Koutsopoulos]

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).

One thing that came up recently when I had this discussion with a contractor, was the fact of the "firewall" between living space and garage. How much you want to bet there is no firewall separating the converted space from the remaining garage space? The question came up specifically because the converted space had opened a small portion of the wall of the "bonus room" to insert a refrigerator so it didn't take up space in the smallish "casita".

Which brings me to another experience. Years ago I appraised a property in Pacoima which originally had a 1-car attached garage. When I saw the place, that area had been converted into 2 bedrooms (2 steps down from the primary living space). Upon my research, I found that the conversion did not have permits, that the electric was not upgraded in that space (from a couple garage outlets and an overhead light, envision curling irons, computers, TVs etc) and the overloaded circuits had previously caused a fire in there! No permits, no inspection, no understanding of the consequences.

Further, a detached 2-car garage was later built with permits, which of course was converted to casita without permits (prior to current permissive regs) and I observed a hole in the bathroom ceiling and mold during my FHA inspection. Turns out the tenant said she had to repaint her bathroom every month to control the mold (!!!), and I conditioned for a proper repair of roof, getting rid of the mold and providing permits. Met the 'contractor' there (read: handyman) who assured me he knew how to handle it. Result: handyman didn't seal it properly to expel the mold, put all new pretty drywall and tile in there, and immediately the black mold spread throughout the building. Result: Los Angeles County condemned the building. Duh. Homeowner lost the property in foreclosure. LA County assisted tenant in obtaining other housing.

 

[Sandra Koutsopoulos]

If one observes that the additional living space conversion/addition without permits appears to be done in a "workmanlike manner", I think I would break it out on a separate line, not include it in GLA, and give it modest value with the statement something to the effect that "...although the space was not found to have permits, this type of... (finished space/conversion/addition) ... has been found to have value in the marketplace". And then for sure find a similar aberrational comp, which will also likely help determine what value that space has in the marketplace.