Presentation on theme: "Reducing Appraiser Liability: Using the ANSI Residential Measuring Standards Presenter Byron Miller, SRA, RAA, MSSE Principal Appraiser BM Appraisals."— Presentation transcript:
Reducing Appraiser Liability: Using the ANSI Residential Measuring Standards Presenter Byron Miller, SRA, RAA, MSSE Principal Appraiser BM Appraisals
Presenter Biography Byron Miller, SRA, RAA, MSSE - MN Certified Residential Appraiser - WI Certified Residential Appraiser - SRA Designated Member of the Appraisal Institute - RAA Designated Member of the National Association Realtors - BOD North Star Chapter of the Appraisal Institute - BOD Twin Cities Financial & Estate Planning Council (TCFEPC) - Instructor - Coursework Developer - Author - Software Developer
Seminar Objectives Discuss SFR Measuring Standard Discuss MFR Measuring Standard
ANSI Z Single-Family Residential Measurement Standard
Z Overview Motivation for Standard ID Five Causes of Measuring Errors Present Major Components of Standard Examples
Quiz Calculate first floor area of home – First floor area Base Area: First Floor 40’ X 26’ Bump-out: floor-ceiling height 6’ 8” 20’ X 4’ Fireplace Bump-out: 8’ X 4’ Stair Opeining 6’ X 8’
Quiz Floor Plan
Which is the correct area? 1040 SF 1112 SF 1080 SF 1032 SF 992 SF
Quiz Answers 1040 SF for gross area 40’ X 26’ = 1040 SF 48 SF for Void Area 6’ X 8’ = 48 SF 992 SF for total finished area 1040 SF – 48 SF = 992 SF
Organization Background ANSI: American National Standards Institute Oversees Standards Development Non-Profit Established 1918 125,000+ Member Companies
Organization Background NAHB: National Association of Home Builders Enhance Housing & Building Industries Provide Affordable & Safe Housing Established 1942 140,000+ Member Companies
Motivation Why do we need a measuring standard?
Motivation What is it? –Voluntary Guidelines for describing, calculating, measuring, and reporting of area for Single Family Residential (SFR) attached, detached & semi-detached (Duplex) homes.
Motivation In the beginning…
Motivation There was…, Gross Living Area (GLA) “Total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. (Finished basements and attic areas are not generally included in total gross living area. Local practices, however, may differ).” The Dictionary of Real Estate Appraisal, 5 th ed.
Motivation Why do we need it? Inconsistent Measuring Methods Exterior area Measuring Interior area Measuring Mixture of both
Motivation Why do we need it? Different Measurers & Uses Appraiser Assessor Realtor
Motivation Why do we need it? Differing SF Measuring Methods Cause Confusion Inconsistent Results Conflict
Motivation One of the most common reasons appraisers & realtors get sued is over measuring disagreements
Motivation History Behind Z765 Standard Building Owners & Managers Association (BOMA) 1915 develop commercial building measurement standard Current Version: Z (Commercial buildings) NAHB 1994 NAHB research begins work on residential standard First Version: Z Previous Version: Z New Version: Z – Summer 2013
Motivation Z765 Participants (partial list) Appraisal Foundation American Institute of Architects Consumers Union Employee Relocation Council (ERC) Fannie Mae Freddie Mac HUD International Code Council Manufacturer Housing Institute National Association of Home Builders (NAHB) National Association of Realtors (NAR) Veterans Administration
Motivation States that use ANSI Z765 (partial list) Alabama Arkansas Colorado Kentucky Louisiana North Carolina
Five Deadly Measurement Sins
Five Causes of Measurement Errors Measuring Issues Missing Gross Living Area (GLA) Counting Non-GLA Complex Floor Plans Inaccessible Measurements
Five Deadly Measurement Sins Five Causes of Measurement Errors Measuring Issues Equipment Failure Measuring Wheels Fiberglass Tape Measurers Laser Measurers
Five Deadly Measurement Sins Five Causes of Measurement Errors Equipment Failure Example Elongated Wheel
Five Deadly Measurement Sins Five Causes of Measurement Errors Measuring Issues Equipment Failure Measuring Wheels Fiberglass Tape Measurers Laser Measurers Squaring Error
Five Deadly Measurement Sins Five Causes of Measurement Errors Squaring Example #1 Easy!
Five Deadly Measurement Sins Five Causes of Measurement Errors Squaring Example #2 Easy, Right?
Five Deadly Measurement Sins Five Causes of Measurement Errors Missing Gross Living Area (GLA) Four Season Porches Bonus Rooms Excluding Stairs Hallways (extending to unfinished spaces) Mother-in-law Units (attached through finished hall)
Five Deadly Measurement Sins Five Causes of Measurement Errors Counting Non-GLA Three Season Porches Decks Patios Non-attached Auxiliary Buildings ie: Mother-in-law units above a detached garage Garages Below-grade Including Stairs (double dipping)
Five Deadly Measurement Sins Five Causes of Measurement Errors Complex Floor Plans Upper level footprint doesn’t match main footprint Interior Cavities/Dead-space in walls Difficult Geometries Multi-Level Homes Completely Above-grade Partially Above-grade
Five Deadly Measurement Sins Five Causes of Measurement Errors Inaccessible Measurements Upper Stories: two and above Condos Attached Townhomes Not accounting for wall thickness
Z Components Components of the ANSI Z765 Standard
Z Components Components of the ANSI Z765 Standard Definitions Area Measurement & Calculation Area Reporting
Z Components Components of the ANSI Z765 Standard Definitions Attached Single-Family Residential (SFR) Home A house that has its own roof & foundation, and is separated by dividing walls that extend from the roof to the foundation. The house does not share utility services with other attached houses.
Z Components Components of the ANSI Z765 Standard Definitions Detached Single-Family Residential (SFR) Home A house with open space on all sides
Z Components Components of the ANSI Z765 Standard Definitions Habitable Space A space in a building for living, sleeping, eating or cooking. Bathrooms, toilet rooms, closets, halls, storage or utility spaces and similar areas are NOT considered habitable spaces. International Building Code (IBC)
Z Components Components of the ANSI Z765 Standard Definitions Habitable Space A space that is usable year-round. Interpreted definition ANSI-Z765
Z Components Components of the ANSI Z765 Standard Definitions Finished Area An enclosed area in a house that is suitable for year-round use that is consistent with the rest of the house
Z Components Components of the ANSI Z765 Standard Definitions Unfinished Area Sections of the house that do not meet the criteria of finished area
Z Components Components of the ANSI Z765 Standard Definitions Grade The ground level at the perimeter of the exterior finished surface of a house.
Z Components Components of the ANSI Z765 Standard Definitions Level Areas of the house that are vertically within two feet of the same horizontal plane.
Z Components Components of the ANSI Z765 Standard Definitions Square Footage (SF) Area of length X width. Units in square meters using Metric (Standard International) measurements, or square feet using English measurements.
Z Components Components of the ANSI Z765 Standard Definitions Finished SF Same as finished area, although not a Z765 definition.
Z Components Components of the ANSI Z765 Standard Definitions Unfinished SF Same as unfinished area, although not a Z765 definition.
Z Components Components of the ANSI Z765 Standard Definitions FNMA definitions. Not defined in Z765 standard but presented here for reference. Gross Living Area (GLA) Below-Grade SF (BSF)
Z Components Components of the ANSI Z765 Standard Gross Living Area (GLA) For units in condominium or cooperative projects, use interior perimeter unit dimensions to calculate the gross living area. In all other instances, use the exterior building dimensions per floor to calculate the above-grade gross living area of a property. Only finished above- grade areas should be used— garages and basements (including those that are partially above-grade) should not be included. FNMA Guidelines: XI, (11/01/2005)
Z Components Components of the ANSI Z765 Standard Below-grade SF Consider a level to be below-grade if any portion of it is below-grade— regardless of the quality of its “finish” or the window area of any room. Therefore, a walk-out basement with finished rooms would not be included in the above-grade room count. FNMA Guidelines: XI, (11/01/2005)
Z Components Components of the ANSI Z765 Standard Definitions Garage A structure intended for the storage of automobiles and other vehicles.
Z Components Components of the ANSI Z765 Standard Measurement & Calculation of Area Units of Measurement Attached SFR Finished Area Detached SFR Finished Area Above- & Below-Grade Area Distinctions Above- & Below-Grade Finished Area Openings to Floor Below Area Ceiling Height Requirements Building Protrusions
Z Components Components of the ANSI Z765 Standard Reporting of Area Rounding Above & Below Finished Area Above & Below Unfinished Area
Where the Rubber Meets the Road Examples
Where the Rubber Meets the Road Example #1 1- Story 26’ X 40’, Flr-Ceiling Bump, No Bsmt SF Above-grade
Where the Rubber Meets the Road Example #2 1-Story 26’ X 40’, Bay Window Bump,No Bsmt SF Above-grade
Where the Rubber Meets the Road Example #3 1-Story 26’ X 40’, Bay, 25% below-grade Bsmt SF Above-grade, 1040 SF Below-grade
Where the Rubber Meets the Road Examples #4 2-Story 26’ X 40’, Bay, Bsmt + 6’ X 6’ Open Foyer 2044 SF Above-grade, 1040 SF Below-grade
Where the Rubber Meets the Road Examples #5 2-Story 26’ X 40’, Flr, Bsmt + 6’ X 6’ Open Foyer 2044 SF Above-grade, 1076 SF Below-grade
Where the Rubber Meets the Road Examples #6 2-Story 26’ X 40’, Flr, 25% below-grade Slab 1040 SF Above-grade, 1076 SF Below-grade
ANSI Z Where to find:
Questions to Ponder ANSI Z Questions
ANSI BOMA Z Multi-Family Residential Measurement Standard
Measuring Multi-Family Residential Properties Using BOMA Z65.4
Z65.4 Overview Scope Key Features Applicability History Definitions Z Synopsis Example
Z65.4 Scope 4+ Unit Residential Measurement Standard for – Measuring – Calculating – Reporting Seven Types of Building Area Any ideas what they are?
Key Features Flexible – Individual Units | Whole Building Consistent – Standard Rules for Measuring & Reporting Area Two Measuring Methods – Gross – Net
BOMA History National Association of Building Owners and Managers – Founded 1907 – Changed name to BOMA in 1968 Information source – Bldg. Codes, Legislation, Statistics, & Technology 16,500+ members
BOMA Z65.4 History Z Office Bldg. Standard – Original Standard Circa Z Industrial Bldg. Standard Z Gross Area Bldg. Standard Z Multi-Unit Res. Standard Z Retail Bldg. Standard Z Mixed-Use Bldg. Standard
Quiz Calculate the Following for a Unit: – Construction Gross Area (CGA) – Void Area Wall Width: 2’ thick between living units 1’ thick otherwise
Quiz Floor Plan
Which is correct for CGA? 1040 SF 1144 SF 1077 SF 1024 SF None of the above
Quiz Answers 1077 SF for Construction Gross Area (CGA) 41’ X 22’ + 11’ X 11’ + 9’ X 6’ = 1077 SF 100 SF or 121 SF for Void Area 10’ X 10’ = 100 SF (Net Method) 11’ X 11’ = 121 SF (Gross Method)
Definitions Building Perimeter – External perimeter around level or floor Center Line – Mid-point of wall Common Area – Shared by two or more units Construction Gross Area (CGA) – Total area of all floor calculated using perimeter
Demising Wall – A wall between areas; may be same or different Finished (wall) Surface – Face of wall | window; painted or clad wallboard Limited Common Area – Private balconies, decks, patios, or porches Living Unit – Residential Habitable Unit
Major Vertical Penetrations (MVP) – Floor opening for ductwork & building utilities More than one SF | 0.1 Sq. Meters Located anywhere in CGA Multi-Unit Residential Building – Building with 4+ residential Units Includes: corridors, lobbies, parking, stairs, & storage
Occupant – A person(s) living or squatting in a living | storage unit Occupancy Voids – An opening between floors in a single living unit Includes: stairs, elevators, and dumwaiters Unit Gross Area (UGA) – Overall area of either living or a storage unit Method A, discuss in a bit
Restricted Headroom Area (RH) – Area in living unit that does not meet IBC minimum ceiling height. Storage Unit Area (SU) – Enclosed area used for storage Not part of or connected to living area May be unfinished, have restricted headroom, limited building services, & not suitable for a use as living unit
Structured Parking Area (SP) – An attached enclosed vehicle storage structure Excludes off-street uncovered parking, on-grade parking below an elevated building, and carports Detached parking garages are considered separately Unit Net Area (UNA) – The net area of a living unit or a storage unit Method B, discussed in a bit.
Void – An open air space where a floor is expected Not part of CGA Void Examples: atriums, and 2-story foyers Major vertical penetrations are not voids Different from occupant voids
Meat & Potatoes How to Apply Z
Meat & Potatoes Overview of Standard – Unit Gross Area Method: Method A – Unit Net Area Method: Method B
Meat & Potatoes Gross Method: Method A – Measures gross area of unit Net Method: Method B – Measures net area of unit Measurement Rules – Must explicitly specify which method used – Z65.4 does not specify units | precision Standard Application same for either Method
Meat & Potatoes Four Steps in apply Z65.4 Standard – Determine CGA – Partition area by type for each floor – Determine boundaries of each type of space – Calculate all areas and tabulate
Meat & Potatoes
Four Steps in apply Z65.4 Standard – Determine CGA Measure | Plans & Spec Building perimeter boundary Calculate Gross Area of each floor Based on building perimeter boundary Sum all floors
Meat & Potatoes Four Steps in apply Z65.4 Standard – Partition area by type for each floor (ID only) Seven types of area What are they???
Meat & Potatoes Seven Types of Areas – Major Vertical Penetration – Structured Parking – Living Units – Restricted Headroom – Limited Common Area – Storage Unit – Common Area Voids aren’t considered a space, since they’re not part of CGA
Meat & Potatoes Four Steps in apply Z65.4 Standard – Determine boundaries of each type of space Figure out wall measuring point Interior finished side; also called near-side Exterior side (finished | unfinished); also called far-side Mid-point of wall Use Wall Priority Diagrams to decide measuring point
Meat & Potatoes
Four Steps in apply Z65.4 Standard – Calculate all areas and tabulate Calculate areas: Net | Gross method | both methods Tabulate areas of each type by: Individual units; Net | Gross | both Each floor Sum all Report in Global Summary of Areas form | similar form Report units in feet | meters Round to nearest square foot | square meter Standard suggests follow steps in order
Meat & Potatoes
Putting it all Together
Calculate the Following for Unit A: – Construction Gross Area – Unit Gross Area – Unit Net Area – Major Vertical Penetration Area – Common Area – Limited Common Area – Void Area Wall Width: 2’ thick between living units 1’ thick otherwise
Putting it all Together
1077 SF; Construction Gross Area (CGA) 41’ X 22’ + 11’ X 11’ + 9’ X 6’ = 1077 SF 1023 SF; Unit Gross Area (UNA) 41’ X 22’ + 11’ X 11’ = 1023 SF 900 SF; Unit Net Area (UGA) 40’ X 20’ + 10’ X 10’ = 900 SF
Putting it all Together 64 SF for Major Vertical Penetration (MVP) 8’ X 8’ = 64 SF 167 SF for Common Area (CA) 11’ X 21’ – (8’ X 8’; elevator) = 167 SF 56 SF for Limited Common (LC) Area 6’ X 9’ = 54 SF 100 SF for Void Area 10’ X 10’ = 100 SF (Method B)
Putting it all Together
Fini! ANSI BOMA Z : Multi-family Measurement Standard