Let’s have a quick conversation about water heaters. During a real estate transaction does the water heater need to be raised or not? What are lenders asking appraisers to look for? Does it matter if it’s gas or electric, or if it’s located in the garage or house? Here’s some things to know. Anything to add?
1) Gas water heater in the garage: A gas water heater inside the garage needs to be elevated at least 18 inches off the ground.
The letter of the law and an exception: There is state code, local code, Uniform Plumbing Code, International Residential Code (IRC), etc… I’ll let you decide what code to go by, but if you need a source for stating water heaters in garages need to be raised, check out IRC P2801.6. However, keep in mind there are FVIR (Flammable Vapor Ignition Resistant) water heaters that are gas, but these water heaters can technically be installed without being elevated because of how they are designed. Some say not all jurisdictions in the country allow for this technicality, so do your homework in knowing what local code says.
2) Gas water heater inside the house: A gas water heater inside the house does NOT need to be elevated. We see gas water heaters in laundry rooms or closets like this all the time, don’t we?
3) Electric water heater in the garage: An electric water heater inside the garage does not need to be elevated. There is no pilot light on an electric water heater, so the rules are different.
4) Electric water heater inside: An electric water heater inside the house does not need to be elevated.
Tips for identifying if it’s gas or electric: If you’re wondering if it’s a gas or electric water heater, then look for a few things. A gas water heater is likely going to have a vent as you can see in the image below. You’ll also be able to identify a gas line and a pilot light (because the flame is what heats the water). In contrast, an electric water heater tends to look more flat on the top since there is no vent. There is also not a pilot light because an electric water heater is heated by electricity instead of a flame. Scroll up to the photos to see if you can identify a vent, pilot light, or gas line.
Why this matters: There are safety implications for water heaters being installed correctly, and from a loan perspective appraisers are asked to mention anything that might be a safety issue. Appraisers are not code enforcement officers or building inspectors of course, but they are still expected to know a few general things about water heaters. These days lenders are very strict about water heaters being double-strapped, but if you have a water heater that is also not elevated when it should be, then you’re probably going to have to correct that for the loan to close. It may be called out by the appraiser too if there is no pressure release valve (safety issue). During private appraisals for divorce or estate planning, water heater issues are not going to be mandated repair items.
Disclaimer: I am not a water heater expert. This post is really just designed to be a quick reference for the real estate community. Please check with your local zoning code for the definitive word on anything related to water heaters in your area. Remember, rules may vary from place to place, and that’s why I did not link to specific code for each issue above. If you have specific code, feel free to link in the comments. There may be different rules too when it comes to water heaters being installed in basements, outside or in atypical locations.
Facebook video with Lucy: By the way, I had a quick 5-minute video conversion with Lucy at The Righini Realty Show on Facebook. I’m really starting to like how prominent video is becoming on Facebook. Anyway, check it out if you’d like. If you want to do something similar, hit me up.
I hope that was interesting or helpful.
Questions: Anything else to add to the conversation? Did I miss something? I’d love to hear your take.
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YES! The purpose is to get the pilot light above gasoline fumes in garages to avoid “KABOOM” issues.
Sometimes I think properly installed water heaters are the exception in resales…. flue pipes, drip legs, strapping, pipes braced, etc.
Exactly Jeff. Let’s avoid explosions. 🙂 Water heaters are supposed to be installed with a permit, though they are installed all the time without one, so I imagine the rules are broken quite frequently. I saw a water heater in a bedroom recently too. Doh!!
I believe this issue should only be addressed in an appraisal report if it is a lender/client/user specific requirement. As a California Real Estate Appraiser it is my opinion that because a state law or building code is written does not necessarily make something a “health and safety” issue. When I started getting requests to comment on things like carbon monoxide detectors and hot water heater tank bracing on my conventional assignments I asked FNMA if this was a requirement, since people were saying these were “health and safety” issues based on state law. In 2015 FNMA stated they have no policy regarding carbon monoxide detectors, smoke detectors, or hot water heater tank bracing. Other entities (FHA), on the other hand, ask appraisers to be aware of building codes/state laws in relation to so called “health and safety” issues, and call out these deficiencies in our reports. I believe appraisers should resist being responsible for knowing state laws/building codes and applying that to our reports unless there is a valuation issue or it is a lender/client/user specific requirement.
Hi Sid. Thank you for your take. I really appreciate your opinion and I think there is wisdom there when it comes to resisting taking on knowing the nitty gritty of code. We are appraisers and need to focus on value. Bottom line. Yet there is also wisdom in knowing enough about building code and laws to be able to spot issues that may pose a safety risk – whether these things are written into the law or not.
You are right that laws don’t mandate something being a safety issue. This is why I don’t mention smoke alarms in divorce assignments. It’s simply not a client requirement or need to focus on the small stuff like that. Even during loans, it’s not a value issue either. It’s not like buyers say, “Hmm, I’ll pay $336 more for this house because it has new smoke alarms and a CO alarm on each level.”
When it comes to water heaters, in my mind there are some legitimate safety issues to consider, so I choose to be in the know about some of the basic stuff as I mentioned in this post. At the same time I certainly don’t want to be responsible for the fine print of everything about water heaters. After all, there is so much to know about them as there are 30+ page pamphlets on water heater code alone. It would be absurd and overwhelming to have to know everything as an appraiser.
In short, I suppose it’s good to take your comment to heart and really consider what our job is as appraisers and also be in tune with what our clients expect. Unfortunately these days lender clients have become a little crazy when it comes to some “safety” issues. For instance, it seems silly to ask appraisers to photograph every smoke detector or not do a loan on a property if there is one missing detector. But that’s the climate of today…
I see it as the lender attempting to shift liability to an appraiser and away from themselves on a variety of issues. I appreciate the info you’ve provided. However, we are not home inspectors, attorneys, code compliance officials, surveyors, etc. I’ve had lenders request so many things that don’t pertain to value, that it is getting to be ridiculous. And I’m not going to make any statement that digs a hole for myself, whether or not they can close their deal without it……
Thanks so much. I don’t disagree with you here. I think lenders continually push appraisers to do more and more and appraisers need to simply say NO at times. I’m amazing at what I hear colleagues being asked to do. Things like, “Please provide us with the password to your signature”, “Please state this report can also be used for attorneys in the future, or “Please comment on whether the addition was built in a professional workmanlike manner and has structural integrity” are clearly pushing the envelope (and inappropriate). At the same time there is a body of knowledge that is important for a housing professional to possess. Is this type of information within this post part of that body of knowledge? I think every appraiser has to ask that question. I know what my answer is regardless of what lenders say or don’t say.
Ryan
As an additional caution for information only and not necessarily as a requirement, I typically do not forget that the relief pipe for the T & P Value is generally required to be extended to allow water to be discharged out side of the living area of a dwelling to not be able to damage the interior of the dwelling, interior of the crawlspace, and turn down 90 degrees at the end of the pipe to prevent potential for horizontal spray of Hot Water if the value does activate. The exact code requirement for reference I am not sure of at the present, but is probably within the body of the national plumbing code of requirements. I mention this also due to being safety related and to preserve and protect the integrity of the physical structure of a dwelling. In a garage area with the finished floor level is below the level of the interior dwelling floor elevation a straight pipe down form the T & P Value to the pan below the tank is usually adequate as long as not able to spray a person or not allow water runoff into the interior of dwelling or below floor on into below grade living area. I know this may be a little more of a problem, because I run into it all the time even when a water heater has been professionally replaced, but I feel it is good to know and to be informed. I realize the observation of the dwelling for appraisal purposes is not an exhaustive “Inspection”, however as a professional we “appraisers” do have need to be informed and educated in such matters to be able to report our observations as they may relate to an effect on potential market value reactions-for example Physical Curable Depreciation estimates.
Thank you so much. I appreciate your knowledge and awareness of needing to know enough to make judgement calls. I get both lines of thinking here that we are not code enforcement officers, yet we also need to be in tune with issues that might impact value or cause problems during a loan (which is probably a sign its important to a client). Thanks Robert.
Not sure where you are located but in GA, it is no longer required by code to extend the pressure relief value dischard to the ground or exterior.
Hi Pierce. Thanks for the heads-up. I’ve yet to hear that for California, though maybe I just haven’t heard yet. If anyone is in the know, speak up. This goes to show standards can differ depending on location. I would imagine rules for elevating water heaters are more uniform throughout the country, but at the end of the day local residents would be wise to check with their local zoning code. Thanks again.
Great stuff Ryan. Thank you for sharing.
Sure thing. Thanks Gary.
I live in southern Nevada and my water heater is in closet attached to my mobile home which can open from the outside can it be on the floor please let me know thanks.
Hi Darlene. Thanks for the question. I honestly don’t know what code would say for a water heater in a mobile home. I would definitely defer to your local code. You might be able to google something and find an image of what is allowed or not. If you cannot find something online I would suggest calling your local city or county to ask them what local code is. Sorry I couldn’t be more help.
Hi Ryan, good information, but I have a question. I live in Michigan and it seems to me that a water heater in the garage would be extremely inefficient with winter temps from zero to thirty degrees.
Hi Harry. Thanks so much. I am not a water heater expert, but that sounds reasonable to me. The water heater does not have to be located in the garage thankfully. It can certainly be found in the house. I am in California and my water heater is inside.
I think the real reason why it always has to be elevated above the ground in the garage is if so someone driving a car it doesn’t accidentally crash into it and make a big mess
Thanks Accord. Well, I suppose it can come in handy. Though to be fair most cars would still be able to hit the water heater since it is elevated less than two feet off the ground.