Saturday, October 7, 2017

Square Footage Defined / Miami-Dade County / RESO Requirements

Britt J. Rosen, CCIM
With the increases in the price of South Florida real estate, the price per square foot, and "market value" is often determined by the square footage of the improvement.  

The definition of "square footage" is the subject of much debate in real estate, building construction and appraisal professions in South Florida.  

In the late 70's square footage was not used in the MLS and it was left out entirely.  Over time, the reporting of square footage is now common in Realtors' listings.  It requires the understanding of the facts. Also, the MLS rules are changing, and in early 2018 the new RESO requirements will streamline MLS systems. including square footage fields across MLS systems in the United States.   

This article is to help understanding, identify and explain the square footage nomenclature use by various organizations and data reporting systems. 

There are a variety of square footage reporting systems and definitions.  They include, but, are not limited to the following:  The Property Appraiser's information (PA), IRIS, Realist, Imapp, Realquest, Excelligent, Costar, surveys (PLS), architectural plans (CAD), and other data. 

The Miami Association of Realtors maintains a regional Multiple Listing System (MLS) made of up a board of directors who manage the listing system, known as the SEFMLS (Southeast Florida MLS)., Zillow, Rredfin, Trulia and similar sites publish square footage data often taken from the MLS. 

Before commenting on the new MLS fields, it is important to review the history of the MLS and the Property Appraiser's site.  In late 2014, the Miami-Dade Tax Assessor came out with a revamped website.  It has three major categories for square footage for improved properties.  They are as follows:

  • Actual Area (gross area "under roof")
  • Living Area (air-conditioned area measured to the exterior wall, excluding the garage and overhangs)
  • Adjusted Area (an area factoring in the two areas mentioned above)

In South Florida's" Regional MLS" the county's Property Appraisers (PA) methodology has been used widely in Realtors' listings and Realtors rely on the PA's square footage to populate listings. The square footage information is populated automatically with "mapping" of the square footage fields.  Problems often occur with this mapping.  If the PA does not publish all of the square footage areas noted above, incorrect square footage information can be entered into the listing fields. A recent study of high-value homes indicate many of the listings do not match the PA's records and often one will find the adjusted area in the air-conditioned area field.  

The  nomenclature for actual area is the "Gross Area" of all square footage that is air-conditioned, the garage and any overhand over 4' in width.  "Living Area" is synonymous with the air-conditioned area measured to the outside of the block wall, or exterior walls (excluding the garage, carports and/or overhangs).  "Adjusted Area" is a hybrid of the two, with factors (noted below) taken into account for the garage, overhang areas and second floor (if any). 

The "Adjusted Area" for a simple architectural home design, is the addition of the following areas:  

100% of the AC area
50% of garages and carports, and
33.33% of overhangs over 4' in width.  

However, if an overhang or rear patio, for instance, is part of a more complex architectural design  of the home, and/or improved significantly, the percentage factor can increase from 33% to 50%.  Also, if garages are improved on the interior, they can also increase from a factor of 50% to 75%. 

The second story of two-story homes is taken at 80% of the area in the "adjusted" area.   Thus, if the 2nd story of a home is large, the adjusted area can be less then the air-conditioned area.  Adjusted areas should not be mixed or used with air-conditioned areas, and this is a common error found in real estate listings and appraisals.  

It is the Property Appraiser's field agent's judgement call in assessing the property for "just value" in order to assess and collect property taxes.  Years ago, "field inspectors" for the PA visited and measured properties.  Although this occasionally occurs, architectural plans from the submittals for permitting of structures and aerial photography / pictometry are now relied on. 

ANSI Standards & FannieMae (who's purpose is to underwrite mortgages for the secondary lending market) have standards for square footage measurement.  The ANSI standard and the Miami-Dade PA subtract "vertical penetrations" of the building, such as stairways, open atrium areas, elevator shafts and any other openings from the floor "plate" when calculating the total square footage.  Some Realtor use sketches that show the interior room dimensions only.  This approach can lead to incomplete reporting of the total area. 

Condominiums - The standard in condominiums is taking the measurement from the "paint-to-paint" inside the unit.  The county relies on the official condominium documents to obtain the square footage.   With condominiums, an engineer typically certifies the condo documents and square footage of the individual units (according to Florida law). This determines the "undivided interest" on a pro-rata share of the total square footage of the condominium.  With new construction developers will often not disclose the methodology in their marketing brochures.  

With some newer condominiums the documents may also contain a "net / net" interior measurement, or smaller area taking out other "common elements" such as columns and beams. Many new high-rise buildings contain an exterior glass skin (curtain wall) that required structural columns and beams to be moved into the interior of units.  It is typical to see these them in bedrooms and living rooms.  These vertical columns and "shear walls" strengthen the building and are typically common elements. Condominium documents we have reviewed sometimes subtract these columns and beams from the  interior to provide a "net/net"  square footage.  

The new MLS being rolled out in 2018, has five (5) new MLS / Matrix square footage fields. These definitions will be covered in future articles on square footage, and other topics on South Florida real estate, appraisal and construction. 

The new MLS square footage areas include the following:
  • Appraisal (meaning a state certified real estate appraiser)
  • Architect
  • Building Plan
  • Developer
  • Owner

High Performance Homes

The six main elements of a “high performance” home containing green features include the following: 
  • ·     Site
  • ·     Water
  • ·     Energy Efficiency
  • ·     Indoor Air Quality
  • ·     Materials
  • ·     Operations and Maintenance

Regarding homes in South Florida, many contain several aspects of the six items mentioned above.

Homes can be "energy efficient" or "green" even though they have not been tested or built to a LEED designation or certification.   Many of our homes built to the specifications of the South Florida Building code of features of high performance homes.

The 2017 MLS will have fields that Realtors will enter when taking a listing to help identify these green or high performance features.

A good example of one of them having to do with "energy efficiency" is the impact glass installed today for hurricane protection in new and existing homes.  This glass typically has a "low e" blocking ultraviolet sun rays.  This "low e" is not a tinting. Rather, it is an invisible coating reflecting long-wave infrared energy leading to a cooler home, increasing energy efficiency.  The heat or light energy is absorbed by glass or, taken away by moving air. 

Another common energy efficient building technique of South Florida homes is the use of insulation to eliminate "heat gain".  Heat gain is the transmission of heat through a material. 

By insulating the home with a variety of new materials once can cut down on heat gain and save air-conditioning costs (or visa-versa during the winter).   There is reflective "batt" material for walls and ceilings, sprayed cellulose, and the new polystyrene that is sprayed at the underside of plywood sheathing cover the roof trusses.  

Not only can a high performance home deal with heat gain and insulating the walls, roofs and ceilings of the home but also the air quality can be improved with blower door testing, and the sealing of cracks and openings where untreated air can get into the home.  

The Appraisal Institute has a new Residential Green and Energy Efficient Addendum form for appraising Energy Star homes, passive solar houses, solar photovoltaic systems, and net-zero energy homes.

I will discuss indoor air quality along with other aspects of custom, high performance homes in my next posts on High Performance Homes. 

Note: In September 2017, Britt J. Rosen, CCIM became certified by the Appraisal Institute in the evaluation of high-performance homes or sustainable homes and is only one of a few South Florida appraisers with this high performance home (green) designation.