[0:00] Welcome to our the town of Salem and Merrimack County Savings Bank.

[15:00] Dispersed funds appropriately that way. Ken's going to talk a little bit about partnering with your builder, and what his team does with the building community. Thank you, Gary.

[15:13] So one of the unique things with Merrimack County Savings Bank. As Gary was saying, our team's all in house. I've got a team of 11 employees that take you through this process. Gary will have the loan officer. He'll stop the application. Then you'll work with a processor,

[15:27] a construction loan specialist. That process is going to help you take that shoebox full

[15:32] of receipts, the permits, all this things, get you to closing. Then once you get to closing,

[15:37] you'll be signed a construction loan coordinator. That person, you'll be assigned that one person.

[15:41] They'll be a main point of contact throughout this.

[15:44] So in the documentation phase, you've started with your loan officer, your processor comes

[15:48] in and you're working with a builder. She'll scan our list and see if your builder's already

[15:53] been approved. We're working with them already. If so, you go right to the next level. If not,

[15:58] he'll fill out a simple little questionnaire and then I'll meet with him at a site he's

[16:03] got going or your site there just to vet him somewhat to make sure he understands the process

[16:07] to relieve frustration going forward because usually this is a 8-12-month process. So we want to

[16:13] make sure if we can relieve frustration early on by answering simple questions that helps them out

[16:18] tremendously. We do have a lot of self-GCs, not many institutions, will do self-GCs, but

[16:24] because I have the team and we're hands on will allow a qualified individual to do their

[16:30] own project and act as their own general contractor. If that's the case, then I meet with you

[16:35] out on your site and we go over the process with you as well. Basically, we're establishing

[16:40] that relationship, so if something goes crazy during the 12 months, you've got somebody

[16:44] you Matt and you can pick up the phone and call them versus the guy I emailed multiple

[16:48] times. It's much more personnel for me. So, as we're going through this, whether it's

[16:56] a self-GC and Gary kind of went over the two differences with the loan fees, with the

[17:01] self-GCs, we are paying the subcontractors and the vendors all directly, getting W9s from

[17:14] us for you as well, even if you've got the contractor.

[17:18] And just something doesn't seem right.

[17:20] We have you reach out to us.

[17:21] We've got, with the 11 people, everybody's got a construction-based background, so we've

[17:27] got hundreds of years of experience going through that process.

[17:33] The budget's fairly simple.

[17:35] It's a 29-line budget, but there'll be multiple drop-downs where you can expand it and open

[17:41] it up.

[17:41] If it doesn't apply to you, we're just going to hide it.

[17:43] If we have a terminology that's different than your builders, we'll just customize it to the terminology.

[17:49] And the biggest thing, what I love about the budget is, if you're at the beginning of the project just get an electronic version, I'll be sitting in bed at night, plopping numbers in and just trying to get a grasp of what's going to cost me, it's not filling out numbers and see if it's feasible for you.

[18:09] As I've got two steps in this at the beginning is I'm approving the builder, and then I'm approving the project.

[18:15] When I'm looking at the project, we're looking at plans, we're looking at specs, we're looking at the appraisal that it all matches up.

[18:24] The biggest thing is the budget that is adequately enough money to get through this project.

[18:29] So even if you're going to do your own painting, we'd have a quote from a painting contractor just in case you got busy at work and

[18:36] you needed to have a paint to do it or something like that.

[18:39] So my biggest concern when I'm looking at this is I have enough money to finish this

[18:43] project.

[18:44] But the process is the biggest thing is communication.

[18:48] Communication is always ongoing, keeping everybody abreast, going through, and as we move through,

[18:54] there could be some things that got missed in the beginning.

[18:56] We didn't realize it was a subdivision.

[18:58] We need a plan.

[18:59] We're looking for cover dances or any of that stuff.

[19:01] And it's communicating with the town for the permitting aspects.

[19:04] So multiple things that happen at the same time.

[19:08] Gary's team's looking at the financing, moving that way, getting the appraisal.

[19:12] My team's looking at the plans, bags, budgets, and approving the project on that side.

[19:21] Back to you.

[19:21] Oh, back to me.

[19:23] You can go to the next one.

[19:25] So once your project is completed, so what we'll do is you'll close your loan, and sort of at that point in time,

[19:34] You get moved over to your project coordinator, your construction loan coordinator.

[19:40] And at that time, they're responsible for dispersing funds out to your contractor as necessary.

[19:48] So, you know, as I said, we always try to impress upon people to be active in your project, be at your project, and keep a close watch on the construction.

[20:02] We're there to make sure that work is being completed.

[20:08] We're not there to look at the quality and be inspectors.

[20:13] We're just saying the work has been completed.

[20:17] And at that point, you'll sign a lean waiver.

[20:21] The contractable sign, a lean waiver.

[20:23] At that point in time, you've told us as the bank.

[20:26] We are okay with us dispersing funds to those parties.

[20:29] So, at that point in time, if you have any questions right around then, that's when you

[20:34] should speak up and say, all right, hey, we want to do this and that.

[20:37] And that's where you have that conversation.

[20:40] Because once those lean waivers have gone out and we've decided to pay everyone, it's really

[20:44] hard to put that genie back in the bottle, right?

[20:46] That original budget we worked at before closing, that everybody agreed on that moves on to a

[20:51] spreadsheet after closing.

[20:53] When you were your builder's looking for funds, you're just going to put in the lines which

[20:56] which line you want the funds to come from, the inspection happens.

[20:59] So this is inspection one, inspection two, inspection three.

[21:02] Balances are all the hits, just a simple spreadsheet.

[21:05] But you're in control at any time, be able to see how much you have in the line,

[21:09] and what your balances are on that line.

[21:13] Can you want to talk a little bit about inspections and dispersions?

[21:17] Yep, so the process for the inspection is when you're looking for an inspection,

[21:20] we pay for work that's been completed.

[21:23] We don't like to do deposits in advance,

[21:25] And unless it was special audit stuff, we hate to give a foundation guy $20,000

[21:30] two months before he's coming because there's a concern he's not coming.

[21:34] And that's our borrowers fund.

[21:36] So we have conversations with the contractors.

[21:40] The day he shows up, I have no problem getting him some funds.

[21:42] So when it comes time for disbursement, the contractor yourself.

[21:45] You fill out the budget, couple of lean waivers, submit the documentation.

[21:49] If you did it over the weekend, my team will book it on Monday.

[21:52] You'll see somebody out at the site Tuesday Wednesday.

[21:55] And a lot of contractors have accounts with us.

[21:58] We electronically put it into their account.

[22:00] They swing by a branch, pick up a check.

[22:02] We still have people get them in the mail, too,

[22:04] which is crazy, but so the process is there.

[22:08] And my team, we meet every morning at 730,

[22:11] talk about what happened yesterday,

[22:12] what's happening today.

[22:13] And if there's something odd that pops up,

[22:15] we focus on that conversation and assist the customer

[22:19] with what was going on with them

[22:22] and navigate them through a roadblock they may have.

[22:27] In our projects is eight inspections.

[22:30] If you use the eight inspections and you have one per month, so unlimited inspections.

[22:38] Change orders.

[22:40] If there is a change order, we have the general contract to stop right up to change order.

[22:45] It's an extra $20,000 for the kitchen.

[22:48] The customer would bring those funds in.

[22:50] Again, we set them aside, tell the contractor, we've got the funds go ahead, keep working,

[22:55] and then we'll disperse those out.

[22:57] We really just are having a conversation that this is extra, clear communication.

[23:04] This is extra, we have the funds keep working versus a lot of general contractors in the past,

[23:09] used to just do all the change orders at the end, and it was $5,000, but he said it four times,

[23:15] that's $20,000.

[23:16] So again, it's just keeping the communication there and going down that through at the very end of the project, we'll have the person that did the appraisal at the beginning come out and do an appraisal, and all they're doing is just verifying this is exactly what I thought it was going to be and they complete a completion report with us in the meantime throughout construction, we'll have our engineering firm do a plot plan, make sure you're on the right lot, meet setbacks and things like that.

[23:43] But a lot of the communities are looking for those as well, too, so we have an engineering firm that will send out for that information.

[23:52] Yeah, just also on the end of your project, once you've completed, and at the bank, we have a six month rate flow down.

[24:04] So if rates have improved over the build, once your project is complete and signed off on, without refinancing,

[24:12] we'll just lower your rate to whatever the lower to whatever our portfolio rate is at that time.

[24:19] So we know, as I said, rates change and go up and down as you go through this.

[24:25] In the beginning, you sort of have your intro and it's your and it is your you know that

[24:33] that that rate can never go up. But with the flow down, it is able to go down. It's no cost to you

[24:39] And again, there's no real paperwork to do.

[24:41] You just say, hey, my project's complete.

[24:43] I asked Ken, he says, yep, everything's been done.

[24:45] It's all finished.

[24:46] And then we lower your rate down to what the current rate

[24:51] is for that.

[24:51] So we like to keep people in the portfolio that we're doing.

[24:57] We've worked hard to get a nice new asset on the books.

[25:01] And we really like our customers to have advantages

[25:04] of all the hard work that they've done as well.

[25:07] So, I think it's a win-win all around, as I said, I think that's a great offering.

[25:14] And then, with the bank every 12 months after that, if the rates decrease, you can do a note modification

[25:21] instead of doing a refinance and just going to a lower rate that way.

[25:25] So, we do like to make sure that you're taking care of through the life of the loan.

[25:30] One other thing too, with the 12 month construction loan, month 13, it converts to principal and interest.

[25:35] Just I have a lot of people that are done in five to six months, they can convert that

[25:40] loan early.

[25:41] I look at it just like a credit card you can pay interest only for another six months

[25:44] so you can convert and start paying principal and interest.

[25:48] Probably 75% if they can convert early they will.

[25:52] So those are all good options to have as you're going through the process.

[25:57] So thank you, Gary and Ken.

[25:59] Thank you.

[25:59] So we'll switch over to the time presentation now.

[26:03] And then after that, we'll open up for a question and answer a session and go from there.

[26:08] I

[26:18] want to show you an individual.

[26:21] You can all gather on this table.

[26:30] Did you want to have a join us up here, Mike?

[26:32] Yeah, sure. I didn't know if we were going to.

[26:36] Be a little cozy.

[26:37] All right.

[26:45] So I'm Jacob LaFontaine. I'm the planning director for the town of Salem.

[26:49] I'm Julie Moukowski on the WSSR for the town of Salem.

[26:51] Good evening, everybody. My name is Mike Gallup. I'm the chief building official and deputy fire chief of the town as well.

[26:57] And what we'd like to do is give an overview of, you know, the aspects of review that our departments have.

[27:04] So the first that we have here is planning department. So there's been a lot of interest in 80 years.

[27:12] They've been around for a long time in sale. 1989 is when we adopted our ordinance.

[27:17] Since we have ones that predate that, typically those are pre-existent nonconformant.

[27:22] But Salem in 1989 was kind of at the forefront, and even up until July of last year we were kind of the forefront because we still allowed 80 use by right before HB 577,

[27:34] which Mayor Mack Bank talked about.

[27:38] Some communities could allow you to have it by special exception, by variance, or not by variance, but special exception or conditional use permit.

[27:46] Salem historically has always done it by a right.

[27:49] It doesn't matter anymore anyway because HP 577 told every municipality in the state that you have to allow

[27:56] ADUs by a right and beyond that you also have to allow detached ADUs by a right.

[28:02] So we've seen a lot of renewed interest in ADUs, a lot of new interest in ADUs as well.

[28:09] Primarily the detached ADUs, we permitted to detach ADUs between July or August when we

[28:15] We amended our ordinance to conform with the new state RSA, the new house bill.

[28:21] And as of January 1 of this year through today, we've permitted eight.

[28:27] So that pretty significant grills, significant interests.

[28:30] We frequently have people who are coming to the counter asking questions.

[28:34] And exactly why we have this session tonight.

[28:39] That being said, there are still some parameters.

[28:42] There's a state that says that you have to allow them by right, you have to allow detachment to use,

[28:46] but there are still other aspects that are enforced.

[28:50] So I'm often the conveyor of that information, sometimes the bearer of bad, I don't know if it's bad news,

[28:56] but the fact that there are some other regulations that need to be met.

[29:00] And Salem, those are listed here, the primary ones, there's more than this, but

[29:05] these are typically the ones that come up.

[29:07] So, we allow ADUs on lots that contain a single family dwelling.

[29:12] So, if you had a duplex, or if you had a multi-family that you owned,

[29:16] you couldn't have a detached ADU on that lot.

[29:19] It has to be a lot that contains one single family dwelling.

[29:22] And then you can have, at that time, one ADU.

[29:26] It can be either attached, or it can be detached.

[29:29] And these are the varieties, Merimack Bank already kind of talked about it.

[29:33] You know, there's a variety of ways you can do it.

[29:35] This is from a resource from New Hampshire Housing, which is a very good guide, but it'll

[29:40] show you.

[29:41] I've highlighted the detache because that's what we've been seeing a lot of right now,

[29:44] but you know, finish space above, or you could attach it, or you could finish your space

[29:48] above your garage.

[29:49] And in terms of the detache, we've seen a lot of different varieties.

[29:52] We've seen a garage under, we've seen...

[30:00] A garage beside. To constitute an ad, you need four components of cooking, so a kitchen, means a sanitation, a bathroom, and then the other two are a little bit more nebulous, so it would be means of dining, and then means of sleeping. You could have a studio apartment and have, you know, those other two, but the ones that typically trigger is the bathroom, the sanitation, in the cooking. We've run into that in some instances where some people come in and they say, well, it's not an ad, you just is, you know, a family room.

[30:29] with a kitchen and a full bath and so unfortunately it's the, you know, for that individual it's the potential use of that space if you have those four components in the town's eyes it's an E.D.U.

[30:42] So it also has to be owner occupied. That's a requirement that we've had in our ordinance.

[30:47] Most communities have that requirement. There are some that don't require it but say on we do.

[30:52] And there are size restrictions, there are maximum of two bedrooms in 950 square feet of living space.

[31:00] In living space is how the state defines it, and that means that you could have that garage that's on finishery.

[31:06] You could have a utility space that wouldn't count towards your 950 square feet of living space.

[31:13] We talked about the house bill, so I won't really go back into that.

[31:16] Really what it meant is that we needed to allow the detachment to use.

[31:19] And that the second prong is kind of interesting.

[31:23] If you have a pre-existent non-conformin structure, if you have a garage that has a five foot setback where 15 feet is required,

[31:31] the town can't tell you that you can't convert that to an ADU, you could convert the garage to an ADU by right.

[31:38] You could add an ADU above the garage, you could add a second floor and put an ADU in that pre-existent

[31:45] non-conforming structure by right, and you wouldn't need to go to the zone and board

[31:49] for a variance.

[31:51] The other items that you'd have to meet, if you could advance to the next slide, is

[31:57] setback.

[31:57] So this typically comes up.

[31:59] A lot of people will come in and say, hey, great, the state says that I can have an ADU

[32:03] by right, and then I have to tell them, yes, but we also want to make sure that it's in

[32:07] a conforming location.

[32:09] This is another resource from New Hampshire Housing, and for those who might not be familiar

[32:14] Here with setbacks, we have three primary residential districts.

[32:18] We have a rural district, residential district, and then a recreational district.

[32:23] Those are the three districts that we allow single-family duplexes homes.

[32:27] It's probably where the majority of your houses are located.

[32:30] And in those districts, the setbacks vary somewhat.

[32:34] So, recreational district, if you're on Arlington pond or if you're on captains pond,

[32:39] on Millville Lake or Shadow Lake, those often times, or most cases are recreationally zoned properties.

[32:47] Their cognizant of the fact that the historic pattern of development was more dense.

[32:52] They were traditionally camped sites, so you'd have, you know, it'd be more characteristic for that area to have a 15 foot rear and 15 foot side setback.

[33:02] They do still have to meet 30 feet from the front, and generally that's because we want to protect the traveling public.

[33:08] look, we don't want to put a house that could be a hazard to the traveling public in the right of way.

[33:13] And also because of Parking, if you have a 15 foot front setback, you're not going to be able to put most of your vehicles in the driveway.

[33:21] So each residential district has a 30 foot setback on the front, and then it varies 15 or 30.

[33:29] So if you're in North Salem, you probably have a rural zone property if you're not on Arlington, and it's likely 30 feet rear side in front.

[33:37] And that's illustrated in this image here, so it's kind of intuitive, but the front would be towards the street side to the side of the house and then the rear to the rear of the house.

[33:47] The other considerations, we do have other criteria that need to be met that hasn't really come up as often, but we're seeing it more particularly in the recreational district where you have a 5,000 square foot lot or you know that you can't really meet these requirements, but building coverage is another item.

[34:03] So it's not your lot coverage, you can have a paved drive and that doesn't count towards it.

[34:08] But if you had a house that occupies 25% of your build, you have your buildable air,

[34:15] your lot coverage, it would be difficult maybe to accommodate a detatch at you because you might

[34:20] exceed that and that would trigger a variance. Similarly, if you're not able to meet the setbacks,

[34:26] that triggers a variance. If you're not able to meet the size requirement, if you say,

[34:31] And this has happened, if you say out, we really need an ADU that exceeds the 950 square feet.

[34:37] The mechanism to do that would be a variant.

[34:39] So there is kind of an escape hatch, I guess, that you could seek if you needed to.

[34:45] But these are what's existed in the ordinance.

[34:48] This was adopted a while back, 1989 at town meeting, and

[34:52] it's been amended over time to conform with the requirements of the current House bill.

[34:57] So there are two other things that we always try our best to make sure are known because we don't want to surprise anybody.

[35:06] And as prizes are bad in this case, impact fees are associated with new development.

[35:11] We assess impact fees in Salem for all new development, whether it be commercial or residential.

[35:17] For the residential impact fee, that goes to public safety, also police and fire.

[35:22] It goes to schools and it goes to recreation.

[35:24] So those and traffic, I'm sorry, so that there are four impact fees that are assessed for residential development and it equates to that $5,884.

[35:35] It's a one time fee and it has to be paid at one time prior to occupancy.

[35:43] So the other fee that we have is a demand benefit assessment.

[35:47] And that's for the increased demand on your water and sewer.

[35:50] So if you were on town water and town sewer, the idea would be that this additional development will increase demand on the services and to offset the cost to the general taxpayers, the general rate pairs, the ideas to assess that on the new development.

[36:09] But these fees can be paid over time because they have the leverage of your utility bills.

[36:15] And plan that I can't, I have the occupancy permit and once that's issued I, for your sake hopefully won't see me again.

[36:21] But for the demand benefit assessment, that can be paid as an annual fee and

[36:28] I don't have that fee in front of me, but it's 2700, it would be the total.

[36:33] and then that's without interest and then water is 1800.

[36:36] And that can be paid in a lump sum if you wanted prior to,

[36:40] or it can be paid in the annual rate with interest.

[36:45] And then the other item that often comes up is your septic lot load

[36:48] and requirements.

[36:49] So again, you might meet your setbacks, you might meet your lot coverage,

[36:53] you might be able to pay the impact fee

[36:54] in the demand benefit assessment.

[36:56] But ultimately, you might not have the soils to accommodate the additional demand

[37:00] and for the additional bedroom counts.

[37:04] So those of you who are on a septic system, your septic demand is based off of your bedroom count.

[37:09] So say you have a three bedroom system and you want to add a two bedroom ADU.

[37:14] You need to demonstrate to the state and to the municipality because we're a self inspecting community that you have the ability to accommodate that use on lot on the existing lot.

[37:26] But there are some, we've run into this more recently, there are some ways maybe to address that you could potentially abandon some of the bedrooms that you have in your primary.

[37:38] And then the other thing I would note is that in ADU, even if you have a one bedroom ADU, the septic lot load and requirement is one and a half.

[37:48] So one and a half bedrooms, because there's an anticipated demand just from the fact that it's a separate distinct unit.

[37:54] So those are the things that sometimes when somebody comes into the counter we kind of have to convey to them and we try very hard to make sure that these are known aspects of the project, so that nobody surprised, you know, it is community that's been accommodated into ADUs, like I said, up until last year we were kind of on the progressive end by allowing them by right, you know other communities when I talk to some of my colleagues and they say, oh yeah, no, you know 900 or 750 square foot ADU has to go to the ZBA for a special exception.

[38:23] That adds time and money to your project, and it's been easier, the state alleviated that aspect of it, but we still have some other aspects that we wanted to make sure that you're aware of.

[38:39] When you're ready to apply, there'd be two things, you'd submit the building permit, Mike is our chief building official, so he would sign it, Scott Sullivan or John Romano.

[38:50] You know, Scott was here earlier, our building inspector, they would sign it as well.

[38:54] And then if you're on town water and town sewer, then our engineer, senior engineer, signs it.

[39:00] If you're on septic, then our health officer signs it, and he's looking at your lot loading requirements.

[39:04] And then I sign it from planning to make sure that you're in compliant with all those fun things I highlighted.

[39:10] In addition to the building permit, there's a standalone permit that's associated with ADUs that you'd also have to fill out.

[39:18] And this is really just to ensure that you're aware of the things that we just talked about in terms of the zone and ordinance.

[39:24] It's really a reiteration or, you know, we just kind of restatement of the ordinance and it's a verification by the property owner that yes, I'm aware of these aspects of the project and yes, I can attest that I'm going to meet them and then we would have you sign that and then again it's reviewed by plan and engineer in our health and then the building inspector as well.

[39:46] So, that's the kind of plan and aspect of ADUs.

[39:53] All right, so from the assessing standpoint, this is where I might get a little boring.

[39:58] So, we look at, you know, what do you want, what do you need for your home?

[40:05] Like, is it detached really the way to go?

[40:07] Should you use more of an avenue as to, hey, I have an unfinished basement?

[40:12] Let's use what I already have, try to utilize that instead.

[40:17] It's hard to really say because it's not like a blanket value across the board and all

[40:23] depends on what is decided that you need whether it's two bedrooms, two baths, if it's

[40:28] how many square feet you're going to be using.

[40:30] If you end up adding the space to the home or if you do a detached ADU or if you reuse

[40:38] already finished space.

[40:39] So if you have a finished space name and you're like, you know, we don't use this anymore for

[40:44] or the initial use of it like playroom,

[40:47] all the kids are grown, blah, blah, blah.

[40:50] Then you can reutilize that, reuse it,

[40:53] put in the kitchen, put in the living room, put in the bedroom,

[40:55] and use that as space instead.

[40:58] So it also, sorry Jacob.

[41:03] So a lot of the details that we look at when we do assess

[41:06] is, again, bathrooms are going to counter to the value

[41:10] of your home.

[41:10] So how many bathrooms are you adding?

[41:13] Bedrooms will matter after a certain point for bedrooms or more for total for your house doesn't add any value for it to your home

[41:22] We're also looking at

[41:27] The kitchen kitchen is gonna add value because it's you know plumbing the electric all that stuff

[41:33] You have to put in all the extra stuff

[41:34] So, I do have some examples of different types of ADUs that people have done.

[41:42] Again, there's the detached ADU that is, like Jacob said, very up and coming.

[41:47] Everybody's looking for it, poking around to see if it works for them.

[41:51] This is more like the most expensive option that I've noticed from any of the others

[41:57] because you're building another house on your property.

[42:00] This particular example, it up to their value about almost, I think it was $99,000, almost

[42:08] around there, because you have a whole separate house there.

[42:13] So you're not getting charged again for the land, the land's just charged flat, blanket,

[42:17] because it's already there.

[42:19] There is what we call a functional ops lessons, which means that we kind of give you a discount

[42:25] I don't because of the site improvements,

[42:27] except it's well sewer, public water,

[42:31] so we don't want you to get charged twice for that.

[42:35] Next, this is,

[42:37] no, jeez, I'm creating, if you go, yeah.

[42:39] So this is gonna let you know that every factor

[42:42] that you have for the detached edu,

[42:45] what kind of flooring you have,

[42:46] what kind of heat and AC, all that kind of stuff

[42:50] is going to the site on the house, the roof,

[42:53] that's gonna add to the value.

[42:54] This is the only type of ADU that's going to have that factor valuing with everything.

[43:03] The rest of the ADUs we don't look at the society because it's already assessed with

[43:08] the main house.

[43:09] Okay, and if you want to go to the next one, this is an example of the using spaces already

[43:17] was there. So this one, again, very minimal cost to do this. This is, I believe, the cheapest

[43:24] way to go about doing an ADU on the next one, Crane. So they had space on the side that

[43:31] they had finished before and they decided to turn that into an accessory apartment. So

[43:38] because they already had that space finished, that didn't change the value. The kitchen, adding

[43:44] the kitchen, adding the bathroom, adding a bedroom may have decided to, that those factors

[43:51] decided to change the value, but very minimally because it's already done. The same with

[43:56] the next example, which is on Elizabeth Lane, they had a finished basement area that they

[44:02] decided to turn to an ADU. Again, that was very minimal. If you want to go to the next

[44:08] one. It was in the basement that was already finished prior. So just the added cost was,

[44:14] again, the kitchen, the bathrooms, that kind of stuff. And the next two examples are

[44:21] ones that the basements were completely unfinished. Pretty cool, but the next one. This one is

[44:28] at Marshae. No. Which one is this? Marshae. Thank you. They had a completely unfinished

[44:33] basement, they renovated the garage that was there and I believe they added like two bedrooms

[44:40] and two baths. So this made that one go up considerably more because they're adding all those extra

[44:46] factors, all the extra work. So those are all things like keep in mind when you're deciding what you

[44:52] want to do with an EDU if you decide to do any.

[45:34] That's another example of just utilizing space that you already have. A lot of people with family being in your home, then you are with a complete stranger that you're just going to rent out to. So we see that more often than not where, you know, your kids are looking for a space to live. So they decide to come live with you or vice versa. You don't need all the space that you have. So your kids have to live.

[45:59] have a great house and a great neighborhood and you're going to move in with them to help

[46:02] out with the grandkids and that's what people are most comfortable with.

[46:08] Creighton, can you go in the next one?

[46:09] So this is another one.

[46:11] This was done a few years ago.

[46:14] This is an example of adding a completely new space that was never there before.

[46:19] Not detached from the house, this is attached to the house.

[46:22] This is the second to two top value-wise if you want to go this route.

[46:30] This particular one on Merrill, if you want to go the next one, they actually added quite

[46:36] a bit of space.

[46:37] They added a base thing, parts of it are finished, parts aren't finished.

[46:41] They added obviously the first floor, and then they also added a 3-quarter story.

[46:46] So it's a considerable amount of square feet.

[46:48] And the square feet of the ADU obviously matters or it kind of determines a little bit more of what the value will be.

[46:55] The more square footed you finish, the higher the value.

[47:00] So I mean they added, a DACA they add all sorts of stuff to this one.

[47:04] So it just ramped it up for them.

[47:07] Can you go to the next one?

[47:12] Excuse me. So this one on Melissa, they did the same.

[47:15] They added on to the back of it.

[47:18] And that added, again, considerable amount of value to their property.

[47:22] Can you give it back?

[47:24] Thank you.

[47:25] So they added the back half there.

[47:27] They don't have a basement there.

[47:29] They have a slab.

[47:30] And what we've been noticing is the slab, if you do that for like your basement, that doesn't

[47:35] add any value to your property whatsoever.

[47:38] There's obviously no space that you can utilize.

[47:40] So therefore it's just, we just label it just so we know what it is.

[47:45] So that they added two bedrooms, a bath, the kitchen, and that was, I believe around 900 square feet somewhere in there.

[47:54] So it's a lot, but again, that kind of option is more of what you would do for family.

[48:01] With it being kind of off to the side, I could see how some people would do that to just rent out to home ever they would like to just have an investment into their property.

[48:09] Yeah, I think that's probably it.

[48:13] Do you want to go now, Link?

[48:16] Sure.

[48:22] Hello, everybody.

[48:24] So one of the big questions that comes up is our permits required and they are.

[48:28] In New Hampshire, the building permit can be obtained by anybody.

[48:32] We don't have any licensing for the building permit only, so basically who frames the house.

[48:37] However, skilled trades such as plumbing, gas, electrical, those are required to be obtained by a licensed electrician.

[48:47] There is provisions in the state that basically talks about if it's your primary dwelling that you reside at, you yourself can pull the permit.

[48:56] If you want to pull those skilled trades such as it's my own house, I'm going to do my own plumbing in my house.

[49:03] However, if you have an ADU, you're no longer eligible for that option, because it's no

[49:10] longer your primary dwelling because you share it with somebody else.

[49:13] So sometimes that comes up a lot.

[49:14] I also think it's important to note that it has to be a new hamster of license contractor

[49:19] or right on the border with Massachusetts, and a lot of times mass contractors come up,

[49:24] and specifically it has to be a new hamster.

[49:28] Another item that always comes up is smoking carbon monoxide detectors.

[49:31] So, they're required to be tied in throughout the whole residence.

[49:36] So, Sam's unique community where there's different vindages of houses.

[49:40] So, some houses didn't have carbon monoxide detectors or smoke detectors that are interconnected.

[49:46] When you do an ADU, they're required to be interconnected.

[49:49] So, if an emergency happens in the primary dwelling or the ADU dwelling, they're both residents

[49:56] get notified.

[49:58] That being said, there's more creative ways to do it, so previously you have to run

[50:04] wire, which can be very expensive.

[50:07] Now there's Bluetooth options, there's Wi-Fi options, so that really reduces the cost,

[50:12] but it still allows for the same level of safety.

[50:15] So that's an option.

[50:17] We already talked about skilled trades.

[50:19] The big one right now is our current building code that we're operating under is the 2021

[50:24] code.

[50:24] the legislation body up at the state, they adopt code cycles, usually between July and August, roughly is that time frame, and they're expected from what I'm hearing to adopt the 24 editions of the building code, the electrical code, the plumbing code, and what they're not changing is the energy code.

[50:48] So the energy code is remaining at the 2018 edition, that's really important just because

[50:53] the energy code can be very challenging and very expensive to meet.

[50:57] So they're maintaining the current edition, which is the 2018 edition.

[51:02] That being said, we're still operating under the 2021 codes, but I think it's really important

[51:07] to inform you that that changes likely to change to the 2024 codes, typically how that works

[51:14] is the fire code in previous years has always gone into effect when they sign it in, so there's no grace period.

[51:21] But the building code in years past, and I expect them to do it this year, typically they give you a grace period to operate under,

[51:28] in this case it would be 2021, from when it's accepted to December, you can operate under either one, and then effective December,

[51:37] sorry January of 27, you would be forced to utilize the 2024 code.

[51:43] Like I said, I don't want to get too far ahead of myself because it hasn't been formally adopted,

[51:48] but I do think that's really important to inform you with any big changes.

[51:52] Like anytime there's a code cycle, some things get less restrictive and other things get more restrictive.

[51:57] So by taking a look at it, I think there's equal trades.

[52:01] There's nothing that I can commit to memory that's glaring,

[52:05] that's going to drive the cost up really expensive.

[52:08] And the reason for that is we're staying under the 2018 energy code.

[52:12] And that's why that cost is kind of maintaining flat and there's nothing really that's an exponential cost from making that code change.

[52:22] I think that's really all I have in permitting.

[52:24] Oh yes, so permitting hour, so permitting hour, so building permits are obtained here at Town Hall upstairs from 830 to 930.

[52:34] We are committed, and we've made great strides to bring some permits online,

[52:39] such as all fires online, all health is online, electrical, residential is online.

[52:47] It will be fully online by the end of this week.

[52:49] And then we're going to work on plumbing, gas, mechanical.

[52:52] And then building will be last.

[52:54] The reason why buildings always last is because it's the most complex.

[52:58] And typically the building permit kind of starts at first.

[53:00] And then the other mechanical permits attached to it.

[53:03] So, that's the reason why building will be last, but we are committed to getting that online as well.

[53:09] So, thank you to the folks from Merrimack County Savings Bank and to the Tom Staff for giving these presentations.

[53:17] I'm going to do a Q&A section now if Gary and Ken could come over here and then all walk around with a microphone and you can raise your hand and ask anyone questions about any of the presentations.

[53:50] It's got to be a contract that licensed in New Hampshire, correct?

[53:54] Correct. So it has to be a licensed, a person that holds a license in a skill tray which would be plumbing gas mechanical.

[54:02] Like I stated at the building, there's no building license in the state of New Hampshire.

[54:06] Okay. I just wanted to make sure that I knew the answer to that.

[54:09] Thank you. I appreciate the clarification that it was as long as they have a license in New York because there are no Massachusetts contract. It's not a license in both.

[54:19] Building codes. If I am building an ADU in my basement, does that mean I have to bring the entire house up to the current codes or just the ADU?

[54:33] So it depends on what you're changing.

[54:35] So the reason why I say that is, you know, for instance, if you are, you know, changing

[54:40] the furnace or something to that effect, if you're affecting something else that affects

[54:44] the other primary dwelling, I think what you're, what you may be trying to like an example

[54:48] would be is electrical, right, because your electrical panel.

[54:51] So if you are able to safely, you'd have to bring that area in the basement and your example

[54:57] up to current electrical code. However, you wouldn't have to bring up the whole

[55:01] house to electrical code. Okay, and one more if you don't mind. This one's for the

[55:06] bank. You talked about the bank would have the year their inspections. You

[55:11] actually sending people out to check the found, you know, look at the foundation

[55:14] or look at the framing. We're we're expecting on as completed work. So we're

[55:21] looking at the work we're not certifying that it's done correctly or you know

[55:25] the quality and craftsmanship of the work where we're confirming that it is

[55:29] complete. Okay, so we have actual people who go out and they actually go out and

[55:33] that if you go out take pictures do all the rest of it meet with the builder say hey

[55:36] what have you done and then we'll pay whatever in line items on the budget that is

[55:41] on that request that's that's what we kind of check for. Okay thank you that's

[55:44] all right. Any other questions?

[55:50] Hello question on plumbing water and

[55:54] Does the sewer, town water and sewer on a detached ADU?

[55:58] Does it have to tie into the main house?

[56:03] Does the water and sewer, I'm trying to say, have the company, the main house, into the detached ADU.

[56:10] Or could have a patient be applied for separate utilities to the ADU?

[56:16] You can have, well, you still have to have one curb's stop.

[56:20] I don't know if I'm going to understand, so you still have to have the water come in at the same location and this is really engineer and the water department, but my understanding is that it could still come in at the same location and you could tee it off so it doesn't have to go to, it doesn't have to come, you know, originate from the primary, it just has to originate from that existing curb stop or your existence service.

[56:42] Yes.

[56:50] Hello.

[56:51] I have three questions.

[56:54] What's an ADU?

[56:55] Could you build it solely with the intent to rent?

[56:58] What does it have to be like a family member moving in?

[57:00] You can't make a distinction between the occup-

[57:04] Historically, there was a distinction.

[57:06] You could have an in-law apartment, and that would have to be rented to a blood relative,

[57:10] and we even have the restrictions that state that has to be rented to a blood relative.

[57:16] We no longer make that distinction. It can be rented to anybody whether they're relative or not

[57:22] Okay

[57:23] My second question here is if I was to

[57:29] Before my basement

[57:31] How does

[57:33] Egress come into it? Do I have like two ways of egress of anything right now? I have one door

[57:38] You need to let them knock out a wall do something to that. No, it's a great question

[57:42] So it's really a case by case basis

[57:44] So to answer your question is you can utilize other, you know, if you can go

[57:48] off through like the primary dwelling, if you're able to go out through that, that

[57:52] can count. You know, you can have a sliding, you know, like another door,

[57:56] like a slider or another outdoor. But the part that you can't exit out of

[58:02] and can't be counted is what they call like a high level

[58:06] a hazard, so that'd be like a garage, right? So you can't exit out into a garage.

[58:11] the reason for that is that is considered high, like an area that more danger is likely,

[58:19] so because the cars are parked there, people put gas there, so you can't exit out to that, so that can't count.

[58:25] So a lot of times the most cost-effective way is people do basically, they cut into the foundation, they do almost like a well basically,

[58:34] and it's kind of like a half-door, it's kind of the most cost-effective way to do it, but there's many different ways to do it.

[58:39] If you were to come down during a permanent hour and you know, it doesn't have to be an engineer plan

[58:44] You can even draw it all like a graph paper. We can give you further direction

[58:47] But it just has to meet the minimum code standard

[58:50] How many are required two two

[58:54] And I'm wondering what's a lot is that override like neighborhood covenants is

[58:59] And I lived in a neighborhood once you know

[59:02] You want supposed to put clothes lines in for instance. Yeah, it was very restrictive

[59:06] I just wonder if this lock and override that

[59:09] So, if you were a member of a homeowner association, your homeowner association could have a covenant that would prohibit a detached ADU.

[59:18] I don't know that that's the case or not, but there could be our homeowner associations in Salem and the state wouldn't over.

[59:26] That this HB577 wouldn't over ride their covenant.

[59:45] My question is with regard to following up with his question over here of a rental.

[59:51] So, I do like catch whether or not it has...

[1:00:00] The primary or secondary, but it's really for the bank is for the secretary as a rental, is it then an investment, the loan, or is it still going to be a second mortgage? These are only on on on primaries. So it would be you wouldn't be able to do the 80 loan on a non-primary residence. So these these all and a lot of the laws follow the primary residence covenant. It doesn't really cover a lot of

[1:00:30] a lot of, you know, people trying to build 80 use onto their investment properties to, you know, multiply their rental abilities.

[1:00:38] So this is mainly a, you know, trying to do infill within regards to your primary residence.

[1:00:44] Yeah.

[1:00:45] Yeah. I think the gentleman's question was whether or not it needed to be a strategy to a relative.

[1:00:49] And that used to be the case.

[1:00:50] We still have conversions.

[1:00:52] So some people might come in and they might say, I've got a, you know, permit it in law that I did in 1992.

[1:00:57] to all their documentation is going to say that that unit has to be rented to a blood

[1:01:02] relative. So we'd walk them through the conversion from an in-law that's bound to be

[1:01:07] rented to a blood relative to now an accessory or an ADU, which can be rented to anybody.

[1:01:14] But there is the owner occupancy. So we see it, we're seeing a lot of it.

[1:01:19] Some people want to age in place, you know, they've got kids who have young children,

[1:01:24] and they are constrained by the housing market.

[1:01:27] So the grandparents in this instance are now saying,

[1:01:30] well, I'm gonna relocate.

[1:01:32] I don't need as much space now.

[1:01:34] And I'm gonna turn over the, you know, my home

[1:01:37] to my grandchildren and my children.

[1:01:41] And I'll move to the ADU.

[1:01:43] And we see it kind of vice versa too.

[1:01:44] But that's probably one of the most common instances

[1:01:47] where somebody comes in, especially the detached

[1:01:49] because you're real close.

[1:01:51] But you know, my parents would love to be living

[1:01:53] on my property but maybe not in my house, so you're real close but you're not too close.

[1:01:59] So they can still kind of see the kids and all that and that's what we've seen a lot

[1:02:02] with these detached ADUs, people who are living in the primary but will downsize to the

[1:02:08] 950 square foot ADU and yeah, it can be anybody but it doesn't, it does have to be on our

[1:02:15] are occupied, either the ADU or the primary.

[1:02:28] Bedrooms, say a homeowner is building an ADU and they want to be able to, you know, utilize the same

[1:02:39] septic system that they have now. How does one up the end of the bedroom?

[1:02:44] Yeah, so a lot of people have a perception that it's closets.

[1:02:47] And some communities that might be, you know, if they have a regulation that says the closet

[1:02:51] it makes the bedroom, but in Salem, we don't have that.

[1:02:53] The closet doesn't make the bedroom, and you could have a closet without a bedroom.

[1:02:57] So it's a good question, what constitutes a bedroom and

[1:03:01] what's going to be used as an office or other use.

[1:03:06] It's something that we're seeing more of because there's more interest in

[1:03:10] aid use and fortunately, I guess maybe for my sake, it's the health officer.

[1:03:15] And in the state, DES is going to review your septic design.

[1:03:19] And they're going to ask those hard questions and I guess make a determination of what constitutes a bedroom and what doesn't, but it's a good question and we've seen it a lot lately.

[1:03:30] If I can pick you back off of Jacob for this is a conversation I've had with the building inspector many times.

[1:03:38] So for assessing purposes, we constitute anything that has a closet as a bedroom and we will assess it as such.

[1:03:47] even if your septic is only good for three bedrooms, you've got two other rooms that have closets

[1:03:52] in the main porch and not in like the basement. Then we'll count those as bedrooms. To us, we're

[1:04:00] assessing what's there, not what you should legally be having or whatever the septic is good for.

[1:04:07] We'll assess whatever is there. We've seen a lot of people, they take a bedroom in the main home,

[1:04:12] they take the closet out, they make it in an office so that way they could have that other bedroom

[1:04:16] in the ADU, so it kind of just cancels each other out.

[1:04:21] So you might have to remove the closet.

[1:04:24] Yeah.

[1:04:25] For assessment.

[1:04:26] Yeah, for assessment.

[1:04:27] I mean, yeah.

[1:04:28] Yeah.

[1:04:29] Astros gone at.

[1:04:29] The health officer's going to be the one who, in conjunction

[1:04:33] with the bill and department and inspection services,

[1:04:35] they would make a determination of, you know, what constitutes

[1:04:40] the bedroom and whether or not this septic system can accommodate

[1:04:43] the load.

[1:04:43] Yeah, there's a lot of differences between building and assessing even the square footage factor of that is different where a building will go

[1:04:51] If you're not utilizing a finished space, I think they'll they'll take that out of the square footage. We just take it as a whole

[1:04:58] All of it. We don't differentiate that we differentiate as far as code score as far as if it's finished or not, but we just have an overall

[1:05:08] Area

[1:05:18] Does it come out and update a survey, or do they?

[1:05:21] It's a good question.

[1:05:22] I would tell you in the majority of cases with the detached units, we are requiring a survey.

[1:05:29] It's good practice.

[1:05:30] We understand that it adds project cost.

[1:05:34] But a lot of times we don't have, there's a lot of files where we don't have any information.

[1:05:39] So we use the best information we have.

[1:05:41] If you're on a five-acre lot in the rural district, you know, hey, we could probably work, you know, figure it out.

[1:05:47] But those aren't typically the properties that are coming in.

[1:05:50] They're typically in a lot of times a detached structure, right?

[1:05:54] So if it's an attached structure, and maybe you have a plot plan from, you know,

[1:05:58] there are early 90s, we could kind of reference that and say, yeah, you know, that could work.

[1:06:03] But the detached structures are a little harder to locate.

[1:06:07] And most instances, particularly detached, were requiring a survey attached, if, you know,

[1:06:13] their sensitivity to setbacks were requiring it.

[1:06:15] But we try to be reasonable about it.

[1:06:20] The bank said be able to do it in the plot plan.

[1:06:23] So if you're going to plot, then why would a member of the public have to pay for a second plot?

[1:06:27] And that doesn't make any sense.

[1:06:28] Well, maybe there could be some conjunction.

[1:06:30] We haven't worked with Mayor McCann, Valley Savings Bank yet.

[1:06:33] But maybe there could be some coordination between the two.

[1:06:36] Because what you often see in the files is a mortgage plot plan.

[1:06:39] Those were frequently done.

[1:06:41] And what's funny about those is it gives you a reference.

[1:06:44] But a lot of times there's a note on there if you look really close.

[1:06:46] and it says not for survey purposes, and it was really tied to the mortgage.

[1:06:50] So, those always make me a little uncomfortable, but you're right.

[1:06:53] We don't want her dumped in seed.

[1:06:54] So, I guess the idea would be that if you come in and the plan

[1:06:57] and division says, you need to do a survey, you know, hopefully maybe the idea

[1:07:02] that has been conveyed by Mayor Mack, and maybe they could work with their firm

[1:07:06] that you use.

[1:07:07] I don't know if that's your experience.

[1:07:08] I don't put my back on this, because a lot of money is before I

[1:07:16] just put up the $1

[1:07:23] ,000

[1:07:24] a certain certain survey.

[1:07:26] You're saying like a site specific survey for the ADU.

[1:07:29] I mean, I guess we wouldn't have them, and most instances they're located in the primary,

[1:07:34] but you know, my interest isn't the primary, our interest would be to make sure that the

[1:07:39] detached structure meets.

[1:07:41] So if they came in with a survey and they said the surveyors only located the detached ADU,

[1:07:46] So that would be okay with me.

[1:07:49] The sequence in this probably, the concern I would have here, if the bank is requiring

[1:07:54] at the end of the project, we could do that, but it would kind of be at risk of the applicant.

[1:08:00] So generally I say, consult with a surveyor in advance so that the property owner is aware,

[1:08:07] the contractors are aware, imagine the bank would want to be aware.

[1:08:11] And then often at the end we'd want to verify.

[1:08:15] Okay, you said that you have the area, you know, did everybody put it in the right spot because believe it, you're aware, we've run into it even the last year where you try to do your best, you know, you have a survey or come out, you get a proposed survey, and then they come with an as bill and, you know, you're scratching your head because how did you, you know, have it a foot into the setback.

[1:08:38] So that's kind of the idea. It's not to, you know, muddy the process.

[1:08:42] I think it's just to make sure that, you know, that the ordinance is applied appropriately,

[1:08:47] and it's equitable, because that's what I really struggle with sometimes is when I have those situations

[1:08:51] where maybe a survey might not be required, but then I have somebody over here where a survey is required,

[1:08:57] I try to be as fair as possible because I know it's an additional project cost.

[1:09:02] All right, we'll do one last question.

[1:09:04] I have two questions. One for the bank. I talked to you before. My daughter owns a property

[1:09:11] and the other five acres. And she wants me to build a tiny house on her property.

[1:09:18] But she, but another side street. So one question is would I have to take out the loan and finance it?

[1:09:27] Or would they because they own the property? Or can we do like a...

[1:09:31] What you would usually do on that case, they would add you to the deed and then you're

[1:09:36] able to add you on to the deed and at that point in time you would be able to take out

[1:09:41] financing on that.

[1:09:42] You would need to do that prior to applying for the loan and then if there's a separate

[1:09:46] street you would want to look at a driveway permit and whatever Peter Rose rules are within

[1:09:50] regards to that.

[1:09:51] But yes, yeah, my second question about tie-in and the water

[1:09:57] There it's going to be on a separate street. They won't be on the side of their property

[1:10:02] I think you do want to consult with

[1:10:06] Peterborough and see what they're in Salem. We'd want you to come in off your existence service

[1:10:11] But I don't know what Peterborough would want.

[1:10:15] Yes

[1:10:17] All right, thank you everyone for coming to our ADU seminar on our left

[1:10:22] We have some informational packets as well as beverages, it snacks over there.

[1:10:28] The panel will be up here to answer any final questions, and we thank you for your time.

[1:10:32] Thank you, and thank you to Mayor Mack, County Savings Bank for sponsoring this event.

Accessory Dwelling Unit Seminar - 05/27/26

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