Reducing Appraiser Liability: Using the ANSI Residential Measuring Standards Presenter Byron Miller,...

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 - http://www.bmaprsls.com - [email protected] - 612.822.5985

http://www.bmaprsls.com/

mailto:[email protected]

Seminar Objectives

• Discuss SFR Measuring Standard

• Discuss MFR Measuring Standard

ANSI Z765-2013

Single-Family Residential Measurement Standard

Z765-2013 Overview

Motivation for StandardID Five Causes of Measuring ErrorsPresent Major Components of StandardExamples

Quiz

• Calculate first floor area of home– First floor areaBase 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

Quiz Floor Plan

• Which is the correct area?1040 SF1112 SF1080 SF1032 SF 992 SF

Quiz Answers 1040 SF for gross area

40’ X 26’ = 1040 SF

48 SF for Void Area6’ X 8’ = 48 SF

992 SF for total finished area1040 SF – 48 SF = 992 SF

Organization Background

• ANSI: American National Standards

InstituteOversees Standards DevelopmentNon-ProfitEstablished 1918125,000+ Member Companies

Organization Background

• NAHB: National Association of

Home BuildersEnhance Housing & Building IndustriesProvide Affordable & Safe HousingEstablished 1942140,000+ 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, 5th 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• Appraiser

Motivation• Assessor

Motivation• 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

Consistent measuring methods

reduces liability

Motivation

• History Behind Z765 Standard Building Owners & Managers Association (BOMA)

• 1915 develop commercial building measurement standard

• Current Version: Z65.1-2010 (Commercial buildings)

NAHB• 1994 NAHB research begins work on residential standard

• First Version: Z765-1996

• Previous Version: Z765-2003

• New Version: Z765-2013 – 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)AlabamaArkansasColoradoKentuckyLouisianaNorth 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 Causes of Measurement ErrorsMeasuring Issues

Equipment Failure Measuring Wheels Fiberglass Tape Measurers Laser Measurers


• Five Causes of Measurement ErrorsEquipment Failure Example

Elongated Wheel


• Five Causes of Measurement ErrorsMeasuring Issues

Equipment Failure Measuring Wheels Fiberglass Tape Measurers Laser Measurers

Squaring Error


• Five Causes of Measurement ErrorsSquaring Example #1

Easy!


• Five Causes of Measurement ErrorsSquaring Example #2

Easy, Right?


• Five Causes of Measurement ErrorsMissing 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 Causes of Measurement ErrorsCounting 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 Causes of Measurement ErrorsComplex 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 Causes of Measurement Errors Inaccessible Measurements

Upper Stories: two and above Condos Attached Townhomes Not accounting for wall thickness

Z765-2013 Components

• Components of the ANSI Z765 Standard


• Components of the ANSI Z765 StandardDefinitionsArea Measurement & CalculationArea Reporting


• Components of the ANSI Z765 StandardDefinitions

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.



Detached Single-Family Residential (SFR) Home A house with open space on all sides



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) - 2009



Habitable Space A space that is usable year-round.

Interpreted definition ANSI-Z765



Finished Area An enclosed area in a house that is suitable for year-round use that

is consistent with the rest of the house



Unfinished Area Sections of the house that do not meet the criteria of finished area



Grade The ground level at the perimeter of the exterior finished surface

of a house.



Level Areas of the house that are vertically within two feet of the same

horizontal plane.



Square Footage (SF) Area of length X width. Units in square meters using Metric

(Standard International) measurements, or square feet using

English measurements.



Finished SF Same as finished area, although not a Z765 definition.



Unfinished SF Same as unfinished area, although not a Z765 definition.



FNMA definitions. Not defined in Z765 standard but presented here for

reference.

Gross Living Area (GLA)Below-Grade SF (BSF)


• Components of the ANSI Z765 StandardGross 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, 405.06 (11/01/2005)


• Components of the ANSI Z765 StandardBelow-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, 405.06 (11/01/2005)



Garage A structure intended for the storage of automobiles and other

vehicles.


• Components of the ANSI Z765 StandardMeasurement & 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


• Components of the ANSI Z765 StandardReporting of Area

Rounding Above & Below Finished Area Above & Below Unfinished Area

Where the Rubber Meets the Road

• Examples


• Example #11- Story 26’ X 40’, Flr-Ceiling Bump, No Bsmt.

1076 SF Above-grade


• Example #21-Story 26’ X 40’, Bay Window Bump,No Bsmt.

1040 SF Above-grade


• Example #31-Story 26’ X 40’, Bay, 25% below-grade Bsmt.

1004 SF Above-grade , 1040 SF Below-grade


• Examples #42-Story 26’ X 40’, Bay, Bsmt + 6’ X 6’ Open Foyer

2044 SF Above-grade, 1040 SF Below-grade


• Examples #52-Story 26’ X 40’, Flr, Bsmt + 6’ X 6’ Open Foyer



• Examples #62-Story 26’ X 40’, Flr, 25% below-grade Slab


ANSI Z765-2013• Where to find:

http://www.homeinovaton.com/about/bookstore

Questions to Ponder

• ANSI Z765-2013 Questions

ANSI BOMA Z65.4-2010

Multi-Family Residential Measurement Standard

Measuring Multi-Family Residential Properties Using BOMA Z65.4

Z65.4 Overview

ScopeKey FeaturesApplicabilityHistoryDefinitionsZ65.4-2010 SynopsisExample

Z65.4 Scope

• 4+ Unit Residential Measurement Standard for – Measuring– Calculating– Reporting

Seven Types of Building AreaAny ideas what they are?

Key Features• Flexible

– Individual Units | Whole Building

• Consistent– Standard Rules for Measuring & Reporting Area

• Two Measuring Methods– Gross – Net

Building Types

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

• Z65.1-2010 Office Bldg. Standard– Original Standard Circa. 1915

• Z65.2-2012 Industrial Bldg. Standard• Z65.3-2009 Gross Area Bldg. Standard• Z65.4-2010 Multi-Unit Res. Standard• Z65.5-2010 Retail Bldg. Standard• Z65.6-2011 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

Quiz Floor Plan

• Which is correct for CGA?1040 SF1144 SF1077 SF1024 SFNone 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 Area10’ X 10’ = 100 SF (Net Method)11’ X 11’ = 121 SF (Gross Method)

Z65.4-2010 Definitions

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

Definitions

Definitions• 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

Definitions

Definitions

• Major Vertical Penetrations (MVP)– Floor opening for ductwork & building utilities

More than one SF | 0.1 Sq. MetersLocated anywhere in CGA

• Multi-Unit Residential Building– Building with 4+ residential Units

Includes: corridors, lobbies, parking, stairs, & storage

Definitions

Definitions• 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

Definitions

Definitions

• Restricted Headroom Area (RH)– Area in living unit that does not meet IBC 1208.2

minimum ceiling height.

• Storage Unit Area (SU)– Enclosed area used for storage

Not part of or connected to living areaMay be unfinished, have restricted headroom, limited

building services, & not suitable for a use as living unit

Definitions

Definitions

• 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.

Definitions

Definitions

• Void– An open air space where a floor is expected

Not part of CGAVoid Examples: atriums, and 2-story foyersMajor vertical penetrations are not voidsDifferent from occupant voids

Definitions

Z65.4-2010 Definitions

Meat & PotatoesHow to Apply Z65.4-2010

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

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

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 | 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

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 AreaWall 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 Together64 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) Area

6’ X 9’ = 54 SF100 SF for Void Area

10’ X 10’ = 100 SF (Method B)

Wrap-Up• Questions

Fini!• ANSI BOMA Z65.4-2010: Multi-family

Measurement Standard

ANSI BOMA Z65.4-2010• Where to find:

http://store.boma.org/t/categories/boma-standards

Reducing Appraiser Liability: Using the ANSI Residential Measuring Standards Presenter Byron Miller,...

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