Property Zoning Issues - First Deal Falling Through

6 Replies

Hi All, 

Under contract for a duplex. During title search a few weeks back, the issue came up that the lister's office has the property as a single family, but the current owners are clearly using (and selling) the property as a duplex... The seller's agent didn't respond to the issue for a while - almost 2 weeks. I'm assuming they didn't think it was as big of an issue as it has turned out to be -- they also claimed to have paperwork that verified it was a duplex when it didn't (town tax assessment has it as a duplex, but that doesn't change the fact that it is a non-conforming duplex in a "commercial" zone, so not legal). Overall, I believe the seller/seller's agent truly didn't know this wasn't a legal duplex. It was bought by the current owner in a foreclosure, and apparently, never verified to be legal with the town.

At the moment, I told my realtor the seller's could have until the original closing date of Jan. 30th to figure it all out. They are currently hoping to find some sort of miracle record that shows the owner that turned the property into a duplex, did it more than 15 years ago and the property is grandfathered into being allowed. They've been at this for several days already, it seems like it simply isn't going to happen.

I've included the zoning map, with a red circled area showing where the property is - the strip of commercial zoning is almost humorous (if it wasn't causing the deal to fall through) because it's blatantly a residential area. If it was residential, it would be a non-issue. The town doesn't seem willing to provide a variance in this case either.

My attorney is aware that this may not all work out, and I'm going to get their opinion of what sort of money I can expect back for costs incurred or what sort of liability the realtor's office and seller have. Does anyone have a similar experience, if so, what did you expect back from the seller for costs --- I have done the inspection, appraisal, title search, LLC formation, $1,000 deposit, etc --- not sure how much if this was Real Estate Tuition, and how much I should try to get back from the seller.

I think they "should" eat the inspection and appraisal for trying to sell something illegal, and of course you will get your ernest money back, but the llc and your time is probably best chalked up to learning.

@Ben Granja Still have not closed. They were never able to reach the owner that made it into a duplex, but they contacted a neighbor and the neighbor verified that the property has been a duplex for greater than 15yrs, therefore it could be grandfathered into being allowed according to zoning. The neighbor (if they choose to) can sign an affidavit stating that it is indeed that old, and it has to be notarized etc. Or, they could simply choose not to sign it (there apparently has been some not so good tenants there previously). If they don't sign it, no deal. That was the update as of last week. 

Hi Megan, I had that property listed several years ago when it was a foreclosure and it sold through another agency as a single-family (MLS#4194909). You can have your Realtor look it up in MLS to see the details. I wish you the best of luck for a favorable outcome.

@Dave Carlson Interesting... I'll ask to have it looked up. Thanks for the info.

They were able to get a neighbor (the original neighbor eventually refused, they asked someone else) to sign an affidavit stating that property has been a duplex for 15+ years, now we're waiting on a CofC from the town -- everything should be good, fingers crossed. Although they just noticed last week that one of the tenants moved out without any coordination with the owner... I think they are making sure that the heat etc was not shut off after they left, hopefully everything is fine.