Incorrect Zoning on Appraisal

What is the name of your state? Wisconsin

We bought our house 4 years ago and are currently trying to sell it. We just had 2 legitimate offers fall through because of the zoning. When we purchased the home our appraisal said it is zoned Residential Legal Conforming. We now found out that it is actually zoned Business Legal Non-Conforming, Grandfathered in as Residential. The problem is that several loan programs out there do not allow this type of zoning and we lost out on 2 buyers because of it. The other problem is that if something like a fire destroyed our home by more than 50% we could not rebuild on our lot! We would not have bought this home had we known the correct zoning. Our appraiser sure missed the ball on this one. What are our rights here?

[HomeGuru]

Originally posted by skrekitty
What is the name of your state? Wisconsin

We bought our house 4 years ago and are currently trying to sell it. We just had 2 legitimate offers fall through because of the zoning. When we purchased the home our appraisal said it is zoned Residential Legal Conforming. We now found out that it is actually zoned Business Legal Non-Conforming, Grandfathered in as Residential. The problem is that several loan programs out there do not allow this type of zoning and we lost out on 2 buyers because of it. The other problem is that if something like a fire destroyed our home by more than 50% we could not rebuild on our lot! We would not have bought this home had we known the correct zoning. Our appraiser sure missed the ball on this one. What are our rights here?

**A: and what did your real estate agent have to say about it? Didi you check with the zoning department prior to your purchase to insure as to the correct zoning? That is how you would have known the correct zoning.

Our current real estate agent also was unaware of the zoning. We live in a small village of about 4000 people....there is no zoning department. There is simply a village hall with 2 employees. There is no reason to suspect that our house is not zoned residential. The former owner did not disclose the nonconforming zoning information on the real estate condition report. We paid for an appraisal which also should have included the correct information. Apparently he forgot the part of his job to check on zoning. The real estate agent we purchased from also gave no indication of the business zoning. With all of this in mind, why would a first-time home buyer go beyond all these paid professionals to check up on their work?

[HomeGuru]

Originally posted by skrekitty
Our current real estate agent also was unaware of the zoning. We live in a small village of about 4000 people....there is no zoning department. There is simply a village hall with 2 employees. There is no reason to suspect that our house is not zoned residential. The former owner did not disclose the nonconforming zoning information on the real estate condition report. We paid for an appraisal which also should have included the correct information. Apparently he forgot the part of his job to check on zoning. The real estate agent we purchased from also gave no indication of the business zoning. With all of this in mind, why would a first-time home buyer go beyond all these paid professionals to check up on their work?

**A: I agree.

[HUD-1]

1. Many appraisers have errors and ommissions insurance. You may have a case against the appraiser.
2. Some lenders allow this type of sale to go through if a demolition insurance policy is purchased.

Just make sure that the ordinance states that you cannot rebuild if more than 50% destroyed VERSUS allowing the owner to apply to the Town for approval to rebuild a non-conforming property.

[HomeGuru]

I agree with HUD-1 and to clarify as to the appraiser's liability, if the appraiser noted in the appraisal report the exact zoning as listed in public records, then the appraiser is not liable. Appraisers are responsible to complete a public record search but are not responsible to conduct a full and complete investigation of zoning and buildlng codes and the conformity of the subject property with respect to said codes.

The local zoning ordinance on rebuilding is that if the home is destroyed by more than 50% you may rebuild if it is done within 12 months, beyond that time it will revert to business zoning. I have a letter from the village that says that there is no guarantee that this code will not be changed in the future, and that the current code at the time of fire, etc. would be the one enforced. Also, the code does not allow a homeowner to add on or expand your home/garage by more than 50%. I have also since found out that there are approximately 25 other homes in my neighborhood affected. I have spoken with some of my neighbors, and none of them were aware of the zoning change to their properties. The only notification that was given to property owners at the time of the change in zoning was a notice in a newspaper of a public hearing on the matter. I will be visiting my local library's archives for a copy of this notice. There were no letters sent to the individual property owners. This I was told directly from village hall. Somehow, this whole matter just seems wrong to me.

[HomeGuru]

Originally posted by skrekitty
The local zoning ordinance on rebuilding is that if the home is destroyed by more than 50% you may rebuild if it is done within 12 months, beyond that time it will revert to business zoning. I have a letter from the village that says that there is no guarantee that this code will not be changed in the future, and that the current code at the time of fire, etc. would be the one enforced. Also, the code does not allow a homeowner to add on or expand your home/garage by more than 50%. I have also since found out that there are approximately 25 other homes in my neighborhood affected. I have spoken with some of my neighbors, and none of them were aware of the zoning change to their properties. The only notification that was given to property owners at the time of the change in zoning was a notice in a newspaper of a public hearing on the matter. I will be visiting my local library's archives for a copy of this notice. There were no letters sent to the individual property owners. This I was told directly from village hall. Somehow, this whole matter just seems wrong to me.

**A: you are free to hire your own real estate attorney to assist you.