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Sorry in advance for the long post but I'm really needing some help.
My wife bought a home in Charlotte 9+ yrs ago in part because the bonus room in the converted garage would make such a great studio. It is a nice large space for her art and has a half bath. House was marketed and appraised including this space as part of the living area and the half bath brought the number of bathrooms to 2.5. The sellers did not disclose any unpermitted work (elderly couple
Now we're trying to refi. The bank pointed out that the Meck property tax records only show 2 Baths and still have the space as a garage. State law only requires counties to keep 6-yrs of building permit documents. We can't prove it was permitted so the bank made the appraiser treat the space as a garage. It reduced the appraised value by $12,000. Half of the loss in value was simply from the reduction in sq ft (1400 sq ft vs. 1800+). Then they subtracted another $6,000 as a "cost to cure", the appraisers swag at what it would cost to convert it back to being a 2-car garage.
We're not planning to sell anytime soon but clearly, we need to try to get this permitted so that when we do sell, we can sell it as what we paid for: a 1800ish sq ft home with 2.5 baths. I understand from the building permit office that we'll need to pull (or have a GC pull) a master permit and then need licensed pros pull elec, plumbing and mechanical permits and correct any deficiencies and stand behind the work that's there. Then Meck will inspect and hopefully issue a permit.
This has all just recently come out but we have talked to one GC & one plumbing company that didn't want to get involved and an HVAC company that said they wouldn't because the equipment is 12yrs old.
Any advice on the refi end of things?
Any advice about getting a permit after the fact?
Any recommendations for GC?
Anybody who has been thru this situation have any words of wisdom?
Yeah. will have to let plum/elec have access. The plumbing & HVAC contractors I've talked to were reluctant. Would like to find a GC that is reliable and not scared but is interested in helping us get righteous with Meck. Any recommendations?
Well, as the home owner, you can act as your own GC but, you will need licensed skilled trades (plumb/elect/hvac) to list on permit application. Once you pull the permit, get the inspector out to the site & advise you on what he will need from contractors to get a final on the work done. This will vary from inspector to inspector but certainly some demo will most likely be required so he can view the work.
As a 20 year mortgage originator here are three steps I would advise to try.
1. Go back to the original listing agent or better yet their broker in charge. Even if the seller did not disclose, the Realtor should have checked this issue with county records. They carry " E & O" (errors and omissions) insurance which may cover your costs to cure this.
2. Discuss the matter with your title insurance company. You paid for this at closing and very few ever file a claim. It will be a small set of documents usually called Schedule A & Schedule B. It is something you may be able to argue is a defect in title and have that insurance cover your costs as well.
3. Was it an issue that was discussed in the original appraisal? You may want to contact the appraisal company that did the original report. This sale should never have closed without this issue being corrected and it is the sellers responsibility to have had it corrected and the appraisers to check the square footage against what is recorded in public records. They carry E & O insurance as well for this very purpose.
Either way it is something that you should not bear the financial responsibility for. Good luck!
I am really surprised no one caught this when you first purchased your home. Your realtor, their realtor, your financing, title, appraiser, inspection etc.
And did you ever look at your own tax records and noted that it only said 2 bathrooms etc? Not pointing fingers, just surprised that no one ever noticed. I agree with mrtgman, time to make calls and find out why no one noticed this.
Agrees with above posters it's worth a try but i kind of doubt that after 9 years you can file a claim against anyone for a transaction that happened that long ago. Further, it's my understanding that North Carolina is a "caveat emptor" (buyer beware) state for land & real estate transactions, if that is correct then you are not going to get far with any claims. Hopefully a RE lawyer will stop by and post on these issues.
I would add that it does not surprise me that a decade ago things like this fell through the cracks, it was a boom time, lots of buyers/sellers/easy credit and so forth. Those days are pretty much gone since the housing market crash in 2008 where now all the i's are being dotted and t's crossed when it comes to the housing market.
And did you ever look at your own tax records and noted that it only said 2 bathrooms etc? Not pointing fingers, just surprised that no one ever noticed. I agree with mrtgman, time to make calls and find out why no one noticed this.
I was not in the picture back then. We just got married back in May. But she was relying (too much) on the realtor and the appraiser. And Like others said, twas boom time and banks paid less attention. I'll add that Countrywide originated the loan so that may say something too.
As a 20 year mortgage originator here are three steps I would advise to try.
1. Go back to the original listing agent or better yet their broker in charge. Even if the seller did not disclose, the Realtor should have checked this issue with county records. They carry " E & O" (errors and omissions) insurance which may cover your costs to cure this.
2. Discuss the matter with your title insurance company. You paid for this at closing and very few ever file a claim. It will be a small set of documents usually called Schedule A & Schedule B. It is something you may be able to argue is a defect in title and have that insurance cover your costs as well.
3. Was it an issue that was discussed in the original appraisal? You may want to contact the appraisal company that did the original report. This sale should never have closed without this issue being corrected and it is the sellers responsibility to have had it corrected and the appraisers to check the square footage against what is recorded in public records. They carry E & O insurance as well for this very purpose.
Either way it is something that you should not bear the financial responsibility for. Good luck!
Mrtgman, Thanks for the advice. Do you know anything about NC statue of limitations on E&O type claims?
Well, as the home owner, you can act as your own GC but, you will need licensed skilled trades (plumb/elect/hvac) to list on permit application. Once you pull the permit, get the inspector out to the site & advise you on what he will need from contractors to get a final on the work done. This will vary from inspector to inspector but certainly some demo will most likely be required so he can view the work.
Glad to hear the inspector will come out that early (right after the permit is pulled). The staff person at the permit office told me they come out during/after work. But if they come first thing, it will help me make sure all essentials are identified and addresses by the trades.
Thanks
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