Illegal multi unit properties

9 Replies

I am a realtor in the Pittsburgh area and have been running into a lot of properties that are illegal (no occupancy permit exists) for the current usage such as a single family home being turned into a duplex.   Does anybody run into this frequently?   What happens if you get caught?   How would you get caught?   I have buyers interested in these properties but the property would probably get flagged during the appraisal?   Any help here?

Hi @Adam Gleve -

I'm an agent in both the San Francisco Bay Area and in the Raleigh metro - we see a lot of this in the Bay Area.  Here are some quick thoughts:

  • from an appraisal stand point, you're going to need to remove the stove/oven from the unpermitted kitchen before the appraiser gets there.  If part of the second unit includes unpermitted living space (ie, converted garage or attic), that won't be factored in when selecting comps or making price adjustments.  Also, understand that the appraiser will value it based as a single-family and not a duplex.
  • what happens if you get caught? depends on the city, but they might give you the choice of bringing it to code and making it a legit duplex or returning it to its original intent as a single-family.
  • how would you get caught? a number of ways:
    • neighbors complain because of inadequate parking
    • you get into a dispute with one of the tenants and they report it
    • you evict a tenant and they sue you because of it
    • etc...
  • if you have interested buyers, it's totally ok for them to move forward with the purchase but you're going to want to protect yourself and them.  Make sure this stuff is in writing and they've signed it:
    • zoning - they're getting a SFH and not a duplex
    • (lack of) permits - nothing for a 2nd kitchen or converted living spaces
    • occupancy cert (for single dwelling)
    • directly ask the seller/listing agent about the legality of the 2nd unit
  • if your buyer plans on continuing to rent the illegal unit, make sure they are aware of the risks ... this article is geared towards landlords in Oakland, but is worth looking at - find the section for Landlord Liability about half way down.

Good luck!

i have been to showings at a few in Pittsburgh.  All have been marketed as 1 unit less.  Example a triplex marketed as a duplex.  often i see them advertised as potential "owner occupied" space. Often when that space is already occupied by a tenant.

My realtor said that they had seen these more than a few times and that when talking to sellers agents they said that comps would be based upon comparable duplexes only.

Not sure of the repercussions, as i steered clear of obvious violations and didn't intend to find out the penalties. I would assume each borough has different penalties and methods to get occupancy permits expanded, which I'm sure if that was easy to do the sellers would have already done themselves. Also seems like a landmine for a renter to avoid paying rent, with little recourse as a landlord.

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Good advice, @Jason Papp.  I always tell my clients they should move on if there is an issue.  Zoning in Pittsburgh is tough to get through issues like this and, after all, there are other properties to look at...why set yourself up?