Impact fees - Church to residential.

[Adro Ramos]

I bought a church (although it has 3 bedrooms and 2 baths ) and looks like a single family home - no pray benches inside - was just used as a gathering . However city is imposing a good amount of impact fees based on the bedroom count - which accounts to close to $40 k , which i cannot afford- I bought the house for myself to reside and cannot afford to pay this.

We verified with city prior to buying and they confirmed it is residential zoned , however never mentioned about any impact fees.

It is residential zone - MLS shows it as 3 bedroom 2 baths - it had a extra unit in the back and also a inbuilt rolling bed on 1st floor for the main

I am stuck here- they are asking to prove it was used as a residential -ever - any guidance would be appreciated on this.

[Kevin Sobilo]

@Adro Ramos, a few suggestions.

1. Get yourself a local lawyer who specializes in real estate. Its hard to understand based on your post what this fee is for, but perhaps the structure does not entirely conform to zoning requirements as a single family home or something of that nature.

2. Talk to the lawyer about your title insurance policy. The title insurance may cover this issue if its related to the house not conforming to zoning or some other municipal ordinance.

3. Talk to your lawyer about whether this issue would have been known by the seller who sold you the house. Seller's in most state are required to disclose material issues they know about. So, if the seller received notice about this issue and failed to disclosure it to you, then the seller may be liable here. 

[Chris Seveney]

Quote from @Adro Ramos:

I bought a church (although it has 3 bedrooms and 2 baths ) and looks like a single family home - no pray benches inside - was just used as a gathering . However city is imposing a good amount of impact fees based on the bedroom count - which accounts to close to $40 k , which i cannot afford- I bought the house for myself to reside and cannot afford to pay this.

We verified with city prior to buying and they confirmed it is residential zoned , however never mentioned about any impact fees.

It is residential zone - MLS shows it as 3 bedroom 2 baths - it had a extra unit in the back and also a inbuilt rolling bed on 1st floor for the main

I am stuck here- they are asking to prove it was used as a residential -ever - any guidance would be appreciated on this.

 As mentioned you need to get an attorney involved. One thing you have to confirm or ask is taxation. Sometimes when a church is converted to residential the taxation may start at purchase or it could revert back to a date - that would be something to consider. 

[Peter Walther]

Why did you go to the city?  What did you need from them to be able to move into the "house"?  Are the bedrooms and baths permitted?

I think you need to read the contract you signed and the seller's disclosures you received to see if there are any apparent misrepresentations. I assume you and or the real estate agent if you were working with one drafted, the contract. Did the contract specify the intended use was as a SFR?

I believe that under a standard title insurance policy, building code matters, zoning and other governmental restriction on the use of the property are excluded from coverage so unless you purchased an extended form title policy there probably is no coverage, but it never hurts to submit a claim.  The worst the insurer can do is deny coverage.

[John Mocker]

Adro,

If you have not moved in, check with your Insurance Agent to see what the Vacancy limitations are.  After a certain number of days vacant, coverage lowers for certain perils.  You may want to switch to a vacant dwelling policy if it will be unoccupied longer than the limit (ie. 30 days, 60 days, ...)

The other advise I would give is see what other uses the house is zoned for.  If it is grandfathered to a church or other business use, that could be good negotiating leverage with the town.  They may prefer it to go residentail and be willing to make exceptions to keep it that way rather than have the other uses of the property.