14 West Hawaii Real Estate | June 9, 2017 Appraisals – What defines a legal ohana? Suzanne Hart, real estate appraiser on the Big Island, weighs in with WHT readers about ohanas, permits, and other common questions about appraisals. With both real estate, and real estate appraisals, zoning, permits, and building codes are factors in obtaining a value or price believed to be reasonable. Hawaii County, Chapter 25 of the zoning code is the best source when it comes to defining a space or structure. A definition to start with is: Single family dwelling: Building containing only one dwelling unit. Section 25 of the zoning code states: Dwelling unit: One or more rooms designed for or containing or used as the complete facilities for the cooking, sleeping and living area of a single family only and occupied by no more than one family and containing a single kitchen. Kitchen: A room or portion of a room designed to be used for the preparation of food and containing at least one item from both of the following categories: A) Fixtures, appliances, or devices for heating or cooking food, and B) Fixtures, appliances, or devices for washing utensils used for dining and food preparation and/or for washing and preparing food. A kitchen needs to have plumbing and/or an electrical connection, and a record of permits is required for their installation. No permits found at the county means these connections are probably unpermitted. If the existing kitchen sink and cooking device connections are not permitted, then the structure does not meet the county’s definition of a dwelling unit since it lacks a legal kitchen. Since an ohana permit creates a dwelling unit, the ohana must have its own legal kitchen, which means the structural elements (walls, ceiling, floor) are permitted under the building permit. A lot of owners operate under the belief they have an ohana on their property. But if the building permit (or the application for the building permit) shows the county did not specifically approve an ohana unit, or the kitchen no longer exists, then it isn’t legal. So, what should an additional living area that is not an ohana be called? Section 25 of the zoning code shows there are two other definitions that might be used: Guest house: Accessory building used as sleeping quarters for guests of the occupants of the main dwelling and having no cooking facilities. Farm dwelling: Single-family dwelling located on or used relating to a farm, or if the agricultural activity produces income to the family occupying the dwelling. The county requires the owner to sign a “farm dwelling agreement” when the structure is permitted, and the permit will specify that it is a farm dwelling. Because a farm dwelling is a “dwelling unit,” it must have a legal kitchen. This means the proper plumbing and electrical permits should be available at the county. The most common situation an appraiser or Realtor® runs into is a garage or other building that was originally permitted as non-livable area, and then converted into some other use. However, this converted square footage should be not considered “living area” since it wasn’t permitted for human occupancy. Building codes are far more stringent for an area that people are meant to occupy. Therefore, a county building permit is necessary to convert non-livable square footage to livable square footage. The county prefers this type of building permit be obtained before work starts so they can advise the owner or contractor about the building code and what changes need to be made to meet the requirements for livable area. In the situation where an owner builds or converts existing structures without a building permit, the county will require an “as-built” permit. The owner will need to submit detailed blueprints of what has already been built, and the county building department will do an inspection. Some things the county considers in the conversion process include the location, size and type of windows, the proper size and type of wastewater disposal system, etc. Asbuilt permits are expensive and can take a lot of time, especially if walls need to be opened up for the inspector to check wiring or plumbing connections. The asbuilt permit could also open up a “can of worms” since the county inspector might notice unrelated issues that require correction in order to receive the final sign-off. ALL ABOUT PERMITS: The three basic residential permits are 1) building, 2) electrical, and 3) plumbing. A new house will have at least one of each permit type. While getting the initial permit is important, the work is not done until all permits pass final inspection. An owner should confirm all final inspections have passed before the contractor is paid in full. If a contractor goes out of business before the final inspections are passed, the owner will have to hire a new contractor. The owner may end up paying for corrective work if it is unacceptable to the new contractor and/or county. You may ask, “Why are permits so important?” There are numerous reasons, but the three most important ones are: 1) financing, 2) fire insurance, and 3) if improvements are destroyed by natural disaster and you want to re-build what you had. The other reason permits are important is that the county can require an owner to remove unpermitted improvements. Due to the importance of building permits and inspection record, it’s recommended an owner make a digital copy of all property-related documents, especially county-stamped blueprints. Contrary to popular belief, the blueprints for a property are not retained by the county. Having a digital file for a property is very useful since the records can be easily sent to a prospective buyer or insurance company. County records are especially incomplete for older houses that were built during the plantation era or on land that used to be part of a larger holding, such as Parker Ranch. House-related documents should always be set aside when cleaning out old properties. There have been family members who tossed old files out without realizing they contained permit records that the county does not have. Many older houses are considered unpermitted because no building permit records exist. This may force the owner or heirs to obtain an as-built permit to sell, finance or insure the property. 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