Urgent re lifting condition

[Honey West]

Situation encountered where a property owner tore out existing decks, replacing them without a permit, on a tri- level home built on a slope. A large elevated deck, one story off the ground with glass barriers, although well built had some unfinished handrails and those would not have passed a county building inspection. I conditioned the appraisal, due to the large Elevated deck having no building permit. I indicated that an architect or engineer needed to attest to the structural integrity of the deck, and code compliance or else a building permit. Today I received a request for a 1004D along with a letter from a General Contractor stating that he had remedied the issues , and the improvements were now up to code. I do not want to lift the condition as I think a contractor letter does not suffice in terms of validating the structural integrity. Of the Elevated deck! I would appreciate your thoughts and comments. Thx!

 

[Mike Ault]

Today I received a request for a 1004D along with a letter from a General Contractor stating that he had remedied the issues , and the improvements were now up to code.

I would never agree with such a statement based on a contractor letter. Contractor expertise varies widely. If they insist, tell your client that they can sell their loan file onto the GSE's with a "Borrower Attestation Letter" in lieu of a 1004D. From the selling guide –

Borrower attestation letter: A letter is permitted to confirm completion of certain alterations or repairs for existing construction. The letter must include (at a minimum) the following:

• borrower name;
• property address;
• certification language that the alteration or repair was satisfactorily completed;
• signatures and date of the borrower;
• visually verifiable exhibits of the completed work; and
• one of the following
  • signature of the qualified professional,
  • a professionally prepared report, or
  • paid invoices for the alterations or repairs.

When either of these attestation letter options is used, a link within the letter to any digital exhibits is acceptable but must be accessible by Fannie Mae for the life of the loan. These exhibits must be unaltered and able to be authenticated using metadata and the geocode for the subject property. The letter and all documentation must be retained in the loan file.

B4-1.2-05, Requirements for Verifying Completion and Postponed Improvements (03/01/2023)

This topic contains information on requirements for verifying completion of construction and repairs, and requirements for postponed improvements, including:

selling-guide.fanniemae.com

 

[andrew81]

There is no code enforcement in my market, nobody ever gets permits for any work. Heck, people build entire homes without permits. Only if, and when someone complains, the city will place a small fine.

With that said, I have no experience with how I would approach this situation. Let's start with how you worded the hypothetical condition:

- an architect or engineer needed to attest to the structural integrity of the deck,
- and code compliance or a building permit.

You said architect or engineer, which seems a bit much for a deck. Just because a permit is on file does not attest to the quality or integrity of the actual work completed, only that the work was approved to be completed.
Let's say a general contractor built the deck last week and there was a permit on file. Would you question the structural integrity of the deck without having a letter from an architect or engineer?
If a general contractor can build the deck (and you would assume it was safe), would a general contractor not suffice to say it was safe?

 

[Tom D]

you don't have enough experience to see a deck is safe. try pushing on it to see if it falls over, haha. i suppose the insurance co might not pay if people were on there and it collapsed.
how hard is it to get a completion cert from the local l&i, if they have one. this old big city, a lot lot of stuff not done with permits and i'm not sure the city would come out for a deck inspection, just having a permit might suffice them. a contractors statement as to the safety would suffice me. a deck is not genius work construction to be pondered over.
what a business decision you have, as to how angry can you make this client.

 

[TerryRohrer]

Recently, a local golf clubhouse relied on a contractor's opinion of deck soundness within the year prior to its collapse. Numerous injuries and immediate lawsuits ensued.

 

[Mark K]

... although well built had some unfinished handrails and those would not have passed a county building inspection.

Your opinion is that it is well built. OK, but it needs handrails finished. No big deal. So why the engineer or architect? I would have conditioned it on the completion of the handrails and left it there. As far as no permit...handle it the same way you handle any other improvement without permit.

I think you overstepped requiring an architect or engineer to sign off for a deck. Do you require architect or engineer for other decks, porches, updated kitchens or baths, etc. completed without a permit?

 

[Dublin ohio]

In some areas. A permit is jut that, a permit. Some will require a final inspection. But I have seen some area where the permits are just a way to collect money and they never inspect.

 

[Raven59]

I generally report what I see and do not take the role of an underwriter. When you condition things outside of your expertise and then provide a satisfactory completion statement, you are, in part, taking ownership. Why not tell the client what is wrong, let them decide on the risk, and let them take ownership?

 

[Mark K]

In some areas. A permit is jut that, a permit. Some will require a final inspection. But I have seen some area where the permits are just a way to collect money and they never inspect.

Exactly. Its nothing more than a revenue source up front and a way to make sure it gets on the assessor's card so they can tax you in perpetuity.

 

[Dublin ohio]

Exactly. Its nothing more than a revenue source up front and a way to make sure it gets on the assessor's card so they can tax you in perpetuity.

When we bought our house a little over 20 year ago. I had to upgrade the electric service and do a substantial amount of rewiring. Installed a 200A service. No permit needed at the time. Just an Ok from the electric provider that the service met their standards. Just to let you know how crazy I was when changing the service. Did it without having the electric company disconnect the service drop first. They have since changed all of that and have countywide requirements for just about all construction.