2 Reducing Appraiser Liability: Using the ANSI Residential Measuring Standards PresenterByron Miller, SRA, RAA, MSSEPrincipal AppraiserBM Appraisals
3 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--
4 Seminar Objectives Discuss SFR Measuring Standard Discuss MFR Measuring Standard
5 Single-Family Residential Measurement Standard ANSI ZSingle-Family Residential Measurement Standard
6 Z765-2013 Overview Motivation for Standard ID Five Causes of Measuring ErrorsPresent Major Components of StandardExamples
7 Quiz Calculate first floor area of home First floor area Base Area: First Floor40’ X 26’Bump-out: floor-ceiling height 6’ 8”20’ X 4’Fireplace Bump-out:8’ X 4’Stair Opeining6’ X 8’
16 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, 5th ed.
17 Motivation Why do we need it? Inconsistent Measuring Methods Exterior area MeasuringInterior area MeasuringMixture of both
18 Motivation Why do we need it? Different Measurers & Uses Appraiser AssessorRealtor
25 Motivation History Behind Z765 Standard Building Owners & Managers Association (BOMA)1915 develop commercial building measurement standardCurrent Version: Z (Commercial buildings)NAHB1994 NAHB research begins work on residential standardFirst Version: ZPrevious Version: ZNew Version: Z – Summer 2013
26 Motivation Z765 Participants (partial list) Appraisal Foundation American Institute of ArchitectsConsumers UnionEmployee Relocation Council (ERC)Fannie MaeFreddie MacHUDInternational Code CouncilManufacturer Housing InstituteNational Association of Home Builders (NAHB)National Association of Realtors (NAR)Veterans Administration
27 Motivation States that use ANSI Z765 (partial list) Alabama Arkansas ColoradoKentuckyLouisianaNorth Carolina
29 Five Deadly Measurement Sins Five Causes of Measurement ErrorsMeasuring IssuesMissing Gross Living Area (GLA)Counting Non-GLAComplex Floor PlansInaccessible Measurements
30 Five Deadly Measurement Sins Five Causes of Measurement ErrorsMeasuring IssuesEquipment FailureMeasuring WheelsFiberglass Tape MeasurersLaser Measurers
31 Five Deadly Measurement Sins Five Causes of Measurement ErrorsEquipment Failure ExampleElongated Wheel
32 Five Deadly Measurement Sins Five Causes of Measurement ErrorsMeasuring IssuesEquipment FailureMeasuring WheelsFiberglass Tape MeasurersLaser MeasurersSquaring Error
33 Five Deadly Measurement Sins Five Causes of Measurement ErrorsSquaring Example #1Easy!
34 Five Deadly Measurement Sins Five Causes of Measurement ErrorsSquaring Example #2Easy, Right?
35 Five Deadly Measurement Sins Five Causes of Measurement ErrorsMissing Gross Living Area (GLA)Four Season PorchesBonus RoomsExcluding StairsHallways (extending to unfinished spaces)Mother-in-law Units (attached through finished hall)
36 Five Deadly Measurement Sins Five Causes of Measurement ErrorsCounting Non-GLAThree Season PorchesDecksPatiosNon-attached Auxiliary Buildingsie: Mother-in-law units above a detached garageGaragesBelow-gradeIncluding Stairs (double dipping)
37 Five Deadly Measurement Sins Five Causes of Measurement ErrorsComplex Floor PlansUpper level footprint doesn’t match main footprintInterior Cavities/Dead-space in wallsDifficult GeometriesMulti-Level HomesCompletely Above-gradePartially Above-grade
38 Five Deadly Measurement Sins Five Causes of Measurement ErrorsInaccessible MeasurementsUpper Stories: two and aboveCondosAttached TownhomesNot accounting for wall thickness
39 Z ComponentsComponents of the ANSI Z765 Standard
40 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Area Measurement & CalculationArea Reporting
41 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Attached Single-Family Residential (SFR) HomeA 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.
42 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Detached Single-Family Residential (SFR) HomeA house with open space on all sides
43 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Habitable SpaceA 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)
44 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Habitable SpaceA space that is usable year-round.Interpreted definition ANSI-Z765
45 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Finished AreaAn enclosed area in a house that is suitable for year-round use that is consistent with the rest of the house
46 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Unfinished AreaSections of the house that do not meet the criteria of finished area
47 Z765-2013 Components Components of the ANSI Z765 Standard Definitions GradeThe ground level at the perimeter of the exterior finished surface of a house.
48 Z765-2013 Components Components of the ANSI Z765 Standard Definitions LevelAreas of the house that are vertically within two feet of the same horizontal plane.
49 Z765-2013 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.
50 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Finished SFSame as finished area, although not a Z765 definition.
51 Z765-2013 Components Components of the ANSI Z765 Standard Definitions Unfinished SFSame as unfinished area, although not a Z765 definition.
52 Z765-2013 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)
53 Z765-2013 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)
54 Z765-2013 Components Components of the ANSI Z765 Standard Below-grade SFConsider 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)
55 Z765-2013 Components Components of the ANSI Z765 Standard Definitions GarageA structure intended for the storage of automobiles and other vehicles.
56 Z765-2013 Components Components of the ANSI Z765 Standard Measurement & Calculation of AreaUnits of MeasurementAttached SFR Finished AreaDetached SFR Finished AreaAbove- & Below-Grade Area DistinctionsAbove- & Below-Grade Finished AreaOpenings to Floor Below AreaCeiling Height RequirementsBuilding Protrusions
57 Z765-2013 Components Components of the ANSI Z765 Standard Reporting of AreaRoundingAbove & Below Finished AreaAbove & Below Unfinished Area
73 BOMA History National Association of Building Owners and Managers Founded 1907Changed name to BOMA in 1968Information sourceBldg. Codes, Legislation, Statistics, & Technology16,500+ members
74 BOMA Z65.4 History Z65.1-2010 Office Bldg. Standard Original Standard Circa. 1915Z Industrial Bldg. StandardZ Gross Area Bldg. StandardZ Multi-Unit Res. StandardZ Retail Bldg. StandardZ Mixed-Use Bldg. Standard
75 Quiz Calculate the Following for a Unit: Construction Gross Area (CGA) Void AreaWall Width:2’ thick between living units1’ thick otherwise
80 Definitions Building Perimeter Center Line Common Area External perimeter around level or floorCenter LineMid-point of wallCommon AreaShared by two or more unitsConstruction Gross Area (CGA)Total area of all floor calculated using perimeter
82 Definitions Demising Wall Finished (wall) Surface Limited Common Area A wall between areas; may be same or differentFinished (wall) SurfaceFace of wall | window; painted or clad wallboardLimited Common AreaPrivate balconies, decks, patios, or porchesLiving UnitResidential Habitable UnitZ65.4 makes no distinction between between finished | unfinished & above/below-grade areas.
84 Definitions Major Vertical Penetrations (MVP) Floor opening for ductwork & building utilitiesMore than one SF | 0.1 Sq. MetersLocated anywhere in CGAMulti-Unit Residential BuildingBuilding with 4+ residential UnitsIncludes: corridors, lobbies, parking, stairs, & storage
86 Definitions Occupant Occupancy Voids Unit Gross Area (UGA) A person(s) living or squatting in a living | storage unitOccupancy VoidsAn opening between floors in a single living unitIncludes: stairs, elevators, and dumwaitersUnit Gross Area (UGA)Overall area of either living or a storage unitMethod A, discuss in a bit
89 Definitions Restricted Headroom Area (RH) Storage Unit Area (SU) Area in living unit that does not meet IBC minimum ceiling height.Storage Unit Area (SU)Enclosed area used for storageNot part of or connected to living areaMay be unfinished, have restricted headroom, limited building services, & not suitable for a use as living unit
91 Definitions Structured Parking Area (SP) Unit Net Area (UNA) An attached enclosed vehicle storage structureExcludes off-street uncovered parking, on-grade parking below an elevated building, and carportsDetached parking garages are considered separatelyUnit Net Area (UNA)The net area of a living unit or a storage unitMethod B, discussed in a bit.
97 Meat & Potatoes Overview of Standard Unit Gross Area Method: Method A Unit Net Area Method: Method B
98 Meat & Potatoes Gross Method: Method A Net Method: Method B Measures gross area of unitNet Method: Method BMeasures net area of unitMeasurement RulesMust explicitly specify which method usedZ65.4 does not specify units | precisionStandard Application same for either Method
99 Meat & Potatoes Four Steps in apply Z65.4 Standard Determine CGA Partition area by type for each floorDetermine boundaries of each type of spaceCalculate all areas and tabulate
101 Meat & Potatoes Four Steps in apply Z65.4 Standard Determine CGA Measure | Plans & SpecBuilding perimeter boundaryCalculate Gross Area of each floorBased on building perimeter boundarySum all floors
102 Meat & Potatoes Four Steps in apply Z65.4 Standard Partition area by type for each floor (ID only)Seven types of areaWhat are they???
103 Meat & Potatoes Seven Types of Areas Major Vertical PenetrationStructured ParkingLiving UnitsRestricted HeadroomLimited Common AreaStorage UnitCommon AreaVoids aren’t considered a space, since they’re not part of CGA
104 Meat & Potatoes Four Steps in apply Z65.4 Standard Determine boundaries of each type of spaceFigure out wall measuring pointInterior finished side; also called near-sideExterior side (finished | unfinished); also called far-sideMid-point of wallUse Wall Priority Diagrams to decide measuring point
108 Meat & Potatoes Four Steps in apply Z65.4 Standard Calculate all areas and tabulateCalculate areas: Net | Gross method | both methodsTabulate areas of each type by:Individual units; Net | Gross | bothEach floorSum allReport in Global Summary of Areas form | similar formReport units in feet | metersRound to nearest square foot | square meterStandard suggests follow steps in order
109 Meat & PotatoesEg; 2-sty plus bsmt. With underground parking garage
111 Putting it all Together Calculate the Following for Unit A:Construction Gross AreaUnit Gross AreaUnit Net AreaMajor Vertical Penetration AreaCommon AreaLimited Common AreaVoid AreaWall Width:2’ thick between living units1’ thick otherwise
113 Putting it all Together 1077 SF; Construction Gross Area (CGA)41’ X 22’ + 11’ X 11’ + 9’ X 6’ = 1077 SF1023 SF; Unit Gross Area (UNA)41’ X 22’ + 11’ X 11’ = 1023 SF900 SF; Unit Net Area (UGA)40’ X 20’ + 10’ X 10’ = 900 SF
114 Putting it all Together 64 SF for Major Vertical Penetration (MVP)8’ X 8’ = 64 SF167 SF for Common Area (CA)11’ X 21’ – (8’ X 8’; elevator) = 167 SF56 SF for Limited Common (LC) Area6’ X 9’ = 54 SF100 SF for Void Area10’ X 10’ = 100 SF (Method B)