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
- bmaprsls@isd.net
- 612.822.5985
Seminar Objectives
• Discuss SFR Measuring Standard
• Discuss MFR Measuring Standard
ANSI Z765-2013
Single-Family Residential
Measurement Standard
Z765-2013 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
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, 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)
 Alabama
 Arkansas
 Colorado
 Kentucky
 Louisiana
 North Carolina
Five Deadly Measurement Sins
Five Deadly Measurement Sins
• Five Causes of Measurement Errors
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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)
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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
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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
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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
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Upper Stories: two and above
Condos
Attached Townhomes
Not accounting for wall thickness
Z765-2013 Components
• Components of the ANSI Z765 Standard
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Area Measurement & Calculation
 Area Reporting
Z765-2013 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.
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Detached Single-Family Residential (SFR) Home
 A house with open space on all sides
Z765-2013 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) - 2009
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Habitable Space
 A space that is usable year-round.
Interpreted definition ANSI-Z765
Z765-2013 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
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Unfinished Area
 Sections of the house that do not meet the criteria of finished area
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Grade
 The ground level at the perimeter of the exterior finished surface
of a house.
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Level
 Areas of the house that are vertically within two feet of the same
horizontal plane.
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.
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Finished SF
 Same as finished area, although not a Z765 definition.
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Unfinished SF
 Same as unfinished area, although not a Z765 definition.
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)
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 abovegrade 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)
Z765-2013 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, 405.06 (11/01/2005)
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Definitions
 Garage
 A structure intended for the storage of automobiles and other
vehicles.
Z765-2013 Components
• Components of the ANSI Z765 Standard
 Measurement & Calculation of Area
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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
Z765-2013 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.
1076 SF Above-grade
Where the Rubber Meets the Road
• Example #2
 1-Story 26’ X 40’, Bay Window Bump,No Bsmt.
1040 SF Above-grade
Where the Rubber Meets the Road
• Example #3
 1-Story 26’ X 40’, Bay, 25% below-grade Bsmt.
1004 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 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
Scope
Key Features
Applicability
History
Definitions
Z65.4-2010 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
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 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)
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. Meters
Located 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
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 area
May 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 CGA
Void Examples: atriums, and 2-story foyers
Major vertical penetrations are not voids
Different from occupant voids
Definitions
Z65.4-2010 Definitions
Meat & Potatoes
How 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
Meat & Potatoes
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
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
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
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