Pitfalls of non-conforming units

[James Stout]

I frequently see properties with non-conforming aka not permitted additions.  Specifically, I'm looking at a multifamily property which had a garage, now converted to a studio.  It has all the necessaries - kitchen, bathroom, windows, exit door - but what are the pitfalls of renting out a non-permitted structure?

Any success or nightmare stories?

This is my first time encountering this issue as a potential landlord.

[Chuck W.]

Always issues with lenders requiring rebuild letters to get a loan. Appraisers will typically raise issues.