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Weird Property

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larryhaskell

Thread Starter
Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
Have a weird property with zoning & permit issues. Just wanted to hear some different views.

Main house built in 1975 is 2100 Sq Ft with 2 car garage. In 1981 an additional 1000 Sq Ft structure was built on the side of the garage. This addition had proper permits. At some point a bath was added. Don't know if it was permitted. You must go through the garage to get to the addition so it is not part of the GLA. In 2000, property is sold and the owner promptly adds a kitchen without permits. The 2nd unit is now an illegal use and only a portion of the improvements are permitted.

Here is what the lender wants. My contact with the lender is an appraiser.

"Without permits and against zoning, value subject as one (weird) unit, then deduct cost to rehab it to that status, clearly indicating that in it's current status it is illegal."

Your thoughts ladies & gentlemen.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
I kinda started to read the lender requirements....and here
is how I handle these situations.

Ya tell the lender that, see, I have to do a market valuation,
cause that's what FNMA really, really wants,
so I have to appraise it like it is. So what your asking me,
is a restricted appraisal with depature provisions (you usually
hear a click and dial tone at this point). (if no dial tone, you say...
So sure, I can do it, but your going to get a report that invokes
departure (usually LOs who propose this wierd crap even know that
its a deal killer). Then you tell them that its your license,
not theirs. Then they go away.

elliott
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
then deduct cost to rehab it to that status, clearly indicating that in it's current status it is illegal."

You have to say it's unpermitted and illegal, so no issue there right? If by "rehab" they mean remove the unpermitted kitchen, and deduct the cost, I don't see where it's any different than deducting cost to undo an unpermitted garage conversion. Which I've done any number of times. So you've got a house with an extra rec room or whatever. A funtional cost to cure in the cost approach and negative adjustment in the market grid. 8)
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Is there a statute of limitations for non-permitted changes, etc? If there is no statute of limitations, it's possible that the municipality may force changes or simply may want a permit with appropriate code compliance. If there is a statute of limitations and it has passed that, then there's no problem. I would check with your municipality for the rules and then appraise it accordingly.

Roger
 
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