Hypothetical on grandfathered duplex

[Michaela G.]

So, I'm just curious about this very unique situation. I'm not personally interested in buying at this price, but just wondering about responsibility of the seller. This is just for learning purpose. Long story to set up the situation. I've never come across something like this before.

So, there are these 8 duplexes on a big lot. According to the city, the original lot was never fully subdivided - there were some steps missing, so, the city sees it as 1 big lot, with one house, under the original address. Sort of like 16 condos and everyone sharing the whole property. 

According to the city, the duplexes are only grandfathered in and should they be not used for a year in the grandfathered fashion (as duplexes), the grandfathering will disappear. 

So, if any of the duplexes were to catch fire, they can't be rebuilt. And the city won't give any permits, if it hasn't been used as duplex for a year (vacant etc). And without permit you can't get electricity turned back on. Right now any permit has to have the address of the unit aka address of original house.

Can't get all 8 owners together to create the final steps and there's no homeowner's association set up etc. Nobody is really taking care of the land.

So, one of the owners of 1 duplex is thinking of selling and some wholesaler supposedly thinks he can get him some overpriced amount. It could maybe get close, if this was a normal duplex, completely renovated (but it's not) but the fact that it's only grandfathered, to me, makes it not a normal property. 

But there's no way that a buyer would ever find out, when they do due diligence. I happen to own one of the duplexes, so I found all of that out when I first bought and tried to get a permit. Was able to get it and figure things out with the building inspector, who had no knowledge about the address. Took him a few days to figure out what happened. All the other owners never had to get permits, because they had uninterrupted power (Here they make you get an electrical permit, if the power has been off for several months).

I did inform the other owners about the situation, but nobody wanted to really know about it. So, this seller knows, but I don't think it's something he'll volunteer. Likely the property would be sold 'as is' and 'buyer beware', so that buyers have to do their own due diligence. Does that leave him without responsibility, if the buyer finds out? He's had the power on in both units, so, the buyer won't likely not have to get a permit. But if the house were to burn down, he'd find out that he can't rebuild, unless all 8 owners would get together and finish subdividing, which is not likely going to happen. 

Is that something that the buyer will just have to live with, as not having found out during due diligence period? Is that something that the seller would be required to disclose, even if the house is sold 'as is'? 

Just curious what you think about this unique situation.