Citation from city about missing permits on single family home

Multi-Family and Apartment Investing
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Citation from city about missing permits on single family home

David He
Member since 2021 · 28 posts · 2 votes

Hello fellow BP members, my wife and I just acquired our first multi-family home in the beautiful city of Greenville, SC. It's a single family home that has been converted to a duplex. However, the previous owners didn't obtain permits when they converted it. This would not normally be an issue, as many old houses in the right area don't have permits. But one of my relatives was so against our house purchase that she actually filed a complaint with the city, requesting them to check out the house for violations. 

My buyer agent assured me that he doesn't think much will come from it. But just less than a week after closing, one of my tenants received a citation from the city that said "Must purchase proper permits for conversion of single family dwelling to a duplex." We are required to correct the violation in 14 days and purchase proper permits and get approval through zoning for the made changes.

I've sent my contractor go talk to the city about the needed permits but I haven't heard back from him. Meanwhile my wife and I are are quite anxiety over this as some permits can cost over a thousand dollars and the verbiage mentioned permits(s), meaning there could be several.

I'm thinking the the worse case here is we'll spend $10k+ to get the permits needed, or we'll need to convert the property back to a single family. Is this correct? And if anyone has dealt with a similar situation when buying a multi-family home, could you please share what happened in your situation or any suggestions you have? 

Thanks!

David

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John Teachout
Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
4y

Yes, YOU go to the city, not your contractor. The contractor didn't purchase the property, you did. Just lay it all out on the table. Tell them everything, ie, you just bought the property, you have no idea what permits are required, will they please come inspect the property and let you know what it will take to make this right? May also want to mention you have a jealous relative that's making trouble for you but whatever it takes, with their assistance, you'll correct any property issues.

While this may be painful from a financial perspective, don't give up now. This is a "contingency" that should have been budgeted for.

On another note, don't speak to this relative regarding your real estate endeavors, ever.

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  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    4y

    @David He this is unfortunate. Did you know that this was non conforming or was this disclosed that it wasn't permitted? Was it in the listing? Did you get financing for this? Does the area have other duplexes or ADU units? This process can be very tedious,time consuming and expensive!! Your first stop is zoning and variance dept, you have to get the house zoned properly into a duplex before you do anything else. IFFFF you get a variance, you will the. need engineered drawings and approved and done to code. Good luck on this

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    That's why we a) always pull permits for all work, b) call the city before purchasing any property and ask them to check the address for permits, they will have them going back 100 years sometimes....

    1Reply
  • David He
    OP
    Member since 2021 · 28 posts · 2 votes
    4y

    @Kim Meredith Hampton thank you for the reply. We knew that the house doesn't have proper building permits, which is common for old homes in the area. But on the disclosure, the seller disclosed that while there were structural additions, there were no zoning violations. The house is currently in a R-7.5 zone, which allows for duplexes. 

    Any idea on the cost to get the house up-to-date with the city? And if we convert the house back to a single-family, would we avoid these issues?

    Thanks

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @David He I think you have value in the duplex. Just go to the city. plead ignorance and tell them you want to be a good citizen and make everything legal. They can often make problems go away.....or become easier....

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  • David He
    OP
    Member since 2021 · 28 posts · 2 votes
    4y

    @Bruce Woodruff

    Good advice for the future. 


    In this case, I did call the city to check permits on the property and there were none on file. In this case, how would you proceed with the purchase? Would you ask the seller to obtain all the necessary permits before purchasing the property?

    I've spoken to the city, and they said they can't actually tell me which permits are needed unless 

    1) Someone makes a complaint about a property

    2) A new permit is pulled for work on the property.


    So I'm not sure how the seller will know what permits are needed.

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  • David He
    OP
    Member since 2021 · 28 posts · 2 votes
    4y

    @Bruce Woodruff Yes we intend to work as hard as we can to keep the duplex. But if it's too costly or too much work, we also have a plan B which is to get rid of the duplex by turning the property back to a single-family.

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    They've already contacted your tenants so they should follow through with you by letting you know what they will still expect. Go down and talk to them in person. Tell them you just bought the house and all the issues you are having.....sometimes you put a face with a name and people are more willing to help....

    2Reply
  • David He
    OP
    Member since 2021 · 28 posts · 2 votes
    4y
    Originally posted by @Bruce Woodruff:

    They've already contacted your tenants so they should follow through with you by letting you know what they will still expect. Go down and talk to them in person. Tell them you just bought the house and all the issues you are having.....sometimes you put a face with a name and people are more willing to help....

    I'd love to do that. However my wife and I are still in LA until the mid-next-month when we move.  

    I did have my contractor go talk to the city about the permits but so far I haven't heard back from him. 

    0Reply
  • John Teachout
    Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    4y

    Yes, YOU go to the city, not your contractor. The contractor didn't purchase the property, you did. Just lay it all out on the table. Tell them everything, ie, you just bought the property, you have no idea what permits are required, will they please come inspect the property and let you know what it will take to make this right? May also want to mention you have a jealous relative that's making trouble for you but whatever it takes, with their assistance, you'll correct any property issues.

    While this may be painful from a financial perspective, don't give up now. This is a "contingency" that should have been budgeted for.

    On another note, don't speak to this relative regarding your real estate endeavors, ever.

    3Reply
  • Matt M.
    Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    The part about a relative calling the city about the property reminded me of my favorite movie-

    Goodfellas

    “Never rat on your friends, and always keep your mouth shut”

    2Reply
  • Dan Rowley
    Investor · Cary, NC · Member since 2012 · 214 posts · 194 votes
    4y

    wow, with relatives like that who needs enemies...

    0Reply
  • Daniel SmythPro Member
    Rental Property Investor · Rockford, IL · Member since 2019 · 471 posts · 342 votes
    4y

    @David He

    There you go. This is how the system works.

    As with all law and regulation enforcement, they are a bit limited to follow complaints before they search out potential violations on their own.

    I would seek a meeting with your area Building Official. The Building Official oversees that Building inspector charged with following up on the violation complaint.

    Since you ARE in violation, your attitude and politeness will get you more.

    Long story short, there will be a hearing date to see a judge. Get hooked up with a paid attorney that deals with your situation. If it goes to court, don't think you can just toss in a sob story about things being unfair.

    Before I found BP, I attended many seminars about REI. Even the gurus miss things. I saw many cases where garages were remodeled outside of their permitted use. The gurus, before they put the home on the market for a flip, decided to un-remodel that garage area do they would be safe from having that bite them as you have been bitten.

    It happens to the big guys too!

    As a contractor myself, I make it a point to know my Building officials. As the code requires a bare minimum to pass, when I can, I go a step better, and never try to get away with something. Trust is everything.

    You should be able to get right with the world soon. Ask the Building official or inspector what they require, and meet or exceed that requirement. This will save you more than much else.

    Good luck!

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    1Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    4y
    Originally posted by @David He:

    But one of my relatives was so against our house purchase that she actually filed a complaint with the city, requesting them to check out the house for violations. 

    How to win friends and influence people.

    0Reply
  • Carini Rochester
    Investor · Rochester, NY · Member since 2016 · 576 posts · 358 votes
    4y

    Any structure that was built as a single family that is now operating as a two family is suspicious. One phone call to the building department, ask, "What's the current legal use for __address__?" They put you on hold for about a minute while they look it up. The seller's realtor should have done this while listing the property. The buyer's realtor should have done this while representing you. The buyer's attorney should have done this before approving the purchase offer, or at least before closing. You, the buyer should have done this because, ultimately, you are responsible for you. If the seller knew that it was never legalized, then the seller committed fraud. Ask your realtor and attorney about this.

    In 'Due diligence' 'due' means, the proper amount. In my opinion, you and the people representing you did not do the proper amount of diligence.

    Your family member certainly treated you badly. But, maybe knew something didn't seem right. Maybe you should have listened.

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    4y

    @David He you said "many old houses in the area don't have permits" but there is a difference between old homes that were converted 40 years ago an one that was just converted. Code and permitting requirements have changed. Even aside from the citation, you have liability concerns here. Your insurance may have issue with this conversion. Are you insuring it as a single family or a duplex? 

    You don't seem to understand the purpose of permits. They are issued for two reasons:

    1. The scope of work is approved in the process, so that your planned work meets zoning and code. You need preapproval for a conversion.

    2. The work is inspected to verify it meets code. There are many safety related issues with HVAC, electrical, fire safety, etc. 

    The risk of doing work without permits is that the work may not be allowed or may not meet code. You may be required to change things, open walls for inspection, etc. The cost of rework makes it not worth taking the risk of no permits.

    I know people blow off permits, assuming "who will find out". All it takes is one neighbor or in your case family member and you have a problem. There was a house in my city that was in a historic district. The owners basically built a new home on the property. The plans were approved, but they changed the design after approval adding a second level, which put the property 8.5 feet too tall. The owners thought "easier to ask for forgiveness than permission". The neighbor contested and they were told to remedy. The remedy would require massive changes, so the owners decided to fight it in court. At the end of a three year court battle, the home owners were given a court order to demolish the $864,000 home within two weeks. It was demolished!

    My best advice is apologize profusely to the city and ask for their help bringing the property into compliance. I would retain an attorney and sue the previous owners for all expenses. Hopefully the work was done within code and no rework is required to bring it in compliance.

    This is also a good lesson for real estate agents. Never tell your client unpermitted work isn't a problem. Explain the potential risks and let them decide. 

    People should also be aware that lumber, pipes and electrical wiring supplies typically have date stamps on them. As a seller, it is hard to argue you didn't do the unpermitted work, when there are date codes on everything. This could even come back to bite you after the sale or in the event of a fire or other catastrophic incident, if the work is found to be the source of the fire.

    2Reply
  • David He
    OP
    Member since 2021 · 28 posts · 2 votes
    4y

    Thank you everyone for your insightful responses. Sorry for the delayed response. I was hoping to share more update after I hear from my contractor since he was going to talk to the city but I still haven't heard from him. 

    Carini, I think you hit the nail on the head. Everyone from my buyer's agent, the closing attorney, the seller, and especially myself, dropped the ball here. In the seller's disclosures (see attachment), the seller checked yes to "room additions or structural changes to the property during your ownership", and yet checked no to "violations or variances of the following: zoning laws, restrictive covenants, building codes, permits or other land use restrictions affecting the real property". 

    I actually did call the city to check if the property had building permits and was surprised when they said that it had none. But when I asked my real estate agent about this, he simply said that not all property modifications require permits. 

    Based on this, I couldn't be certain if the building had permit violations or not. The property was being listed as a single family while it was actually being used as a duplex. When I asked my buyer agent about the discrepancy, he chalked it up to a glitch in sites like zillow, redfin. He told me that they often have inaccurate information, and he assured me that in his mls, it would always show the accurate property type, and that he was certain that it was a duplex. 

    My question is, if we are now forced to make costly permits and modifications to make the property a legal duplex, is my buyer agent or the seller liable? I feel that the seller either knowingly or unknowingly misrepresented information because she reported that there were no building permit violations. Perhaps that's true if the property were a single family home, which it is. But then again, it's being used as a duplex. 

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    4y

    @David He Two thoughts - 1) Stop having your Contractor go to the city, he is clearly not doing it and is not invested. 2) Your RE agent is an idiot.

    0Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    4y

    @David He I would say you have a couple courses of action.  The path of least resistance is to work with building department and resolve out of your own pocket.  I agree with Bruce that in general, the building department is never trying to be the bad guy.  As Bruce noted, calling them directly, talking to the inspector or plans examiner, or whoever you need to and letting them know the story will often go a long way in smoothing the process.

    Alternatively, you likely have legal recourse here against seller, and possibly, your agent.  You would need to engage an attorney, but per your screen shot, the sellers should have disclosed that proper channels were not taken in the changes.  

    1Reply
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