Dave from my myspace appraiser group (I think he's lurking in the shadows on activerain as well) posted informatoin about lenders wanting a cost to cure statement for unpermitted additions -
Here is one of his quotes: "I do not include the square footage of any additions in the GLA, in the report. I do make a comment that additions have been done, but I do not give any value to the additions. By doing so, it opens up a liability issue because you are stating (by including it in the GLA and final value) that the addition is of the same quality and construction condition as the rest of the home. Which would include any electrical wiring, plumbing, roofing, insulation, etc. and if something should happen, such as a fire from a short in the electrical wiring in the addition, the appraiser could be held liable. "
The source for further reading and explanation is here: http://forum.myspace.com/index.cfm?fuseaction=messageboard.viewThread&EntryID=29648856&categoryID=0&groupID=102249625
As I stated on the myspace forum, the older homes in the Portland metro area do not necessarily have up to date records for permits that may have been handed out generations ago - If I were to, for instance, ignore all the GLA of finished attics in the area that tax records never updated as finished, it would be a huge mess to appropriately appraise spaces (and make sure all comparables had permitted attics as well) -
What do you do when you (appraisers) encounter additions that don't appear to have permits? Do you count the GLA if there's no proof of permit? Do you enter a cost to cure statement for demolition (or should it be the cost to cure to get it permitted?)? I have never run into a lender wanting a cost to cure for unpermitted additions ... That would most likely 'kill the loan' as a cost to cure is always followed up by a 'subject to completion' report which would be put on hold until proper demolition or permitting was completed -
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