Purchased a condemned property (without knowing it). Next steps?

Purchased a condemned property (without knowing it). Next steps?

Member since 2021 · 8 posts · 8 votes

Hi All, Noob out of state investor and this is my first investment property. 
I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

Property management tried to register the property with the city to start the eviction process.
Shocker: When they attempted to register, the city responded back saying this property is condemned.

It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

Looking for help here. 

Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

Question 3) What should my priority be in terms of next steps here?

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Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
Quote from @Veena Vaidyanathan:

Hi All, Noob out of state investor and this is my first investment property. 
I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

Property management tried to register the property with the city to start the eviction process.
Shocker: When they attempted to register, the city responded back saying this property is condemned.

It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

Looking for help here. 

Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

Question 3) What should my priority be in terms of next steps here?

 This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it 

I am closing on a condemned property next week, all they care about is permits and doing it right  

BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all 

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  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @James Wise:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?


     Based on everything that's been said in this thread, it seems more likely to me that you bought a property that has not been lead certified, rather than one that is condemned.

    Reason I've come to this conclusion is you bought it with financing. I've never seen a lender do a deal where they let the buyer do a quit claim deed. So I'd imagine you got yourself a general warranty deed and a title insurance policy. First thing a title insurance company is going to do on a deal is run a title report and notify all parties of any clouds on title like the property being condemned. Everyone would then need to sign a disclosure of this and I highly doubt the lender would be willing to fund the deal when this disclosure came out.

    A property that isn't lead certified though, it does not create a cloud on title. It's really 100% on the buyer to know if it is lead certified or if it needs to be etc...The Cleveland lead certification law is new to, so most Agents and sellers aren't even aware it exists.


    In my opinion, improvements being condemned is not a cloud on the title, the owner still owns the real property unburdened by an encumbrance.  Now if the owner fails to cure the problem, by either bringing the property up to code or removing the improvement and the city/town/county is forced to remove the violation and places a lien on the title for the cost, recorded in the public records, that may be a cloud on the title.

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

     This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it 

    I am closing on a condemned property next week, all they care about is permits and doing it right  

    BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all 


     Unfortunately many of the repairs may be behind drywall; a/c, electrical, plumbing.


     Irrelevant if you know how to navigate the Cleveland markets/ inspectors 


     I guess in Cleveland, city inspectors have X-ray vision.

  • Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

     This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it 

    I am closing on a condemned property next week, all they care about is permits and doing it right  

    BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all 


     Unfortunately many of the repairs may be behind drywall; a/c, electrical, plumbing.


     Irrelevant if you know how to navigate the Cleveland markets/ inspectors 


     I guess in Cleveland, city inspectors have X-ray vision.

    I have been involved with 1ks of rehabs in the Cleveland markets, and got to know many of the inspectors, most have common sense. Its all about knowledge and your team. I am closing on a 4 unit condemned building this week, most would run away. When we are done it will be brand new everything, and bringing in about 40k a year, net about 30k, with an all-in price of about 115k, 
    All the best  
  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    Seller 'gotcha. Property has lead paint, maybe asbestos siding, a winding set of no permitted rooms, mold in basement, and it appeared to be cheap. 

    My guess: you did not do an inspection (waived and signed then you cannot blame your agent); you did not do a full residential appraisal; did not pay for title endorsements; lender is funky; agent had you sign off your rights...

    1. look deeply into the appraisal what comments were made about condition? If no comments write a letter demanding your money back.

    2. Did you get ALTA title endorsement 8.1 and 9? If so you file a claim with your title company. You do not hire an attorney for this it will cost you $100000 to have an attorney fight with their attorneys. If you didn't get full title with the endorsements you likely lose in court.

    3. Get Broker of your agent involved. Seller probably didn't live in subject so they will say they had no idea. Get the tenants out, they likely don't pay and seller lied about tenants as well.

    4. What did you sign and docusign? If you waived any rights (which the standard contracts forces) probably no recourse. Lender surely had you sign 50 documents and they will not have guilt the lender didn't know the property was condemned. Print everything and read it all now. In real estate the thing that matters is what is in writing.

    What is your goal? What was sale price? 

    Get a contractor who is licensed and knows the planning desk guys belly to belly. Have him video everything and come up with a written construction cost breakdown.

    Read all the codes here https://planning.clevelandohio...

    What zone are you? What are you necessary rehabs?

    I advise you DO NOT CALL THE Planning Desk or Zoning Department until you have an expert level of knowledge.

    Tell the tenants verbally the county says they have to go, not you.

    What notices do you have?

    Do you want seller to buy it back? Did you sign for arbitration?

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

     This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it 

    I am closing on a condemned property next week, all they care about is permits and doing it right  

    BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all 


     Unfortunately many of the repairs may be behind drywall; a/c, electrical, plumbing.


     Irrelevant if you know how to navigate the Cleveland markets/ inspectors 


     I guess in Cleveland, city inspectors have X-ray vision.

    I have been involved with 1ks of rehabs in the Cleveland markets, and got to know many of the inspectors, most have common sense. Its all about knowledge and your team. I am closing on a 4 unit condemned building this week, most would run away. When we are done it will be brand new everything, and bringing in about 40k a year, net about 30k, with an all-in price of about 115k, 
    All the best  

     Sorry, if a house is condemned, I assume the structure is possibly compromised, the wiring needs to be replaced as does the mechanical and the plumbing needs to be checked, all of which needs to be seen to be cleared.  If you've got inspectors signing off on work they haven't seen, that's not common sense, that's shooting craps the building doesn't collapse or burn down with someone inside.  I couldn't take that risk.

  • Member since 2022 · 142 posts · 61 votes
    3y
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

    Common sense indicates that you should have checked that apartments were in compliance prior to buying the home. It is up to the buyer to perform their due diligence prior to closing on a property. A realtor isn't going to do that for you nor is the lender. Lender is only concerned with value should they need to foreclose, realtor is only concerned with is this a legal 2 unit. Closing attorney or title company checks title. Not sure if the fact that the house was condemned was put on the title, some town halls are behind.  Beyond that it's up to you I'm afraid. All is not lost however. You now own the property and will have to make it legal. You should be able to get someone from the town to inspect the unit so at least you can get a certificate of occupancy. I don't know why they would need you to empty the house. That sounds ridiculous. What difference does it make? They aren't going to tear up the walls to see what's behind them. Get a plumber and an electrician to check the wiring to certify that there are no safety hazards. Beyond that the town should be able to work with what is there to deem it livable.  Next time check yourself. Any permits would be on the field card at the town. I wouldn't waste time sueing anyone because that doesn't fix your problem and will take years to sort out. Good luck to you. 
  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Caroline Gerardo:

    Seller 'gotcha. Property has lead paint, maybe asbestos siding, a winding set of no permitted rooms, mold in basement, and it appeared to be cheap. 

    My guess: you did not do an inspection (waived and signed then you cannot blame your agent); you did not do a full residential appraisal; did not pay for title endorsements; lender is funky; agent had you sign off your rights...

    1. look deeply into the appraisal what comments were made about condition? If no comments write a letter demanding your money back.

    2. Did you get ALTA title endorsement 8.1 and 9? If so you file a claim with your title company. You do not hire an attorney for this it will cost you $100000 to have an attorney fight with their attorneys. If you didn't get full title with the endorsements you likely lose in court.

    3. Get Broker of your agent involved. Seller probably didn't live in subject so they will say they had no idea. Get the tenants out, they likely don't pay and seller lied about tenants as well.

    4. What did you sign and docusign? If you waived any rights (which the standard contracts forces) probably no recourse. Lender surely had you sign 50 documents and they will not have guilt the lender didn't know the property was condemned. Print everything and read it all now. In real estate the thing that matters is what is in writing.

    What is your goal? What was sale price? 

    Get a contractor who is licensed and knows the planning desk guys belly to belly. Have him video everything and come up with a written construction cost breakdown.

    Read all the codes here https://planning.clevelandohio...

    What zone are you? What are you necessary rehabs?

    I advise you DO NOT CALL THE Planning Desk or Zoning Department until you have an expert level of knowledge.

    Tell the tenants verbally the county says they have to go, not you.

    What notices do you have?

    Do you want seller to buy it back? Did you sign for arbitration?


     I'm pretty sure the 8.1 endorsement is for mortgagee policies only and indemnifies against loss related to environmental (superfund) liens which have been recorded in the public records.  So unless the OP is holding a mortgage and the condemnation relates to a recorded lien it won't help.  The 9 relates to violations of recorded restriction, encroachments and excroachments (generally you need a survey for that coverage) and forced removal of an improvement encroaching into an easement excepted in the policy and damage resulting from the exercise of mineral rights.

    ALTA Endorsement 9-06 (Restrictions, Encroachments, Minerals - Loan Policy) Revised 04-02-12 Technical Correction (08-01-16; 12-01-18) (virtualunderwriter.com)

    ALTA Endorsement 8.1 (Environmental Protection Lien) (virtualunderwriter.com)




  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Sylvia H.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

    Common sense indicates that you should have checked that apartments were in compliance prior to buying the home. It is up to the buyer to perform their due diligence prior to closing on a property. A realtor isn't going to do that for you nor is the lender. Lender is only concerned with value should they need to foreclose, realtor is only concerned with is this a legal 2 unit. Closing attorney or title company checks title. Not sure if the fact that the house was condemned was put on the title, some town halls are behind.  Beyond that it's up to you I'm afraid. All is not lost however. You now own the property and will have to make it legal. You should be able to get someone from the town to inspect the unit so at least you can get a certificate of occupancy. I don't know why they would need you to empty the house. That sounds ridiculous. What difference does it make? They aren't going to tear up the walls to see what's behind them. Get a plumber and an electrician to check the wiring to certify that there are no safety hazards. Beyond that the town should be able to work with what is there to deem it livable.  Next time check yourself. Any permits would be on the field card at the town. I wouldn't waste time sueing anyone because that doesn't fix your problem and will take years to sort out. Good luck to you. 
    Oh no, someone who thinks the guy laying out cash should have some responsibility, what's the world coming to?  However, if the house has been condemned I suspect there is something more wrong than just cosmetics. 
    By definition the place is unfit for use.

    condemn

    v. 1) for a public agency to determine that a building is unsafe or unfit for habitation and must be torn down or rebuilt to meet building and health code requirements. 2) for a governmental agency to take private property for public use under the right of eminent domain, but constitutionally the property owner must receive just compensation. If an agreement cannot be reached then the owner is entitled to a court determination of value in a condemnation action (lawsuit), but the public body can take the property immediately upon deposit of the estimated value. 3) to sentence a convicted defendant to death. 4) send to prison. (See: condemnation action, eminent domain, capital punishment)

    Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.

    Yes, they are going to tear off the sheetrock to make sure the wiring, plumbing and mechanical are up to code.  That's why you generally get the rough in inspected before putting up the drywall.  I suspect no tradesmen is going to sign off on work someone else did.
  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    @Peter Walther we don't know what the condemnation cause is, there are chemical ones in Cleveland and area surrounds # OHD98061454

    Title company is not going to cover things the seller lied about. Seller knew it was condemned.  (if they got title insurance)

    the seller filled out a statement of identity.  @Veena Vaidyanathan get your hands on a copy to find out who is the real seller. 

  • Member since 2022 · 142 posts · 61 votes
    3y
    Quote from @Peter Walther:
    Quote from @Sylvia H.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

    Common sense indicates that you should have checked that apartments were in compliance prior to buying the home. It is up to the buyer to perform their due diligence prior to closing on a property. A realtor isn't going to do that for you nor is the lender. Lender is only concerned with value should they need to foreclose, realtor is only concerned with is this a legal 2 unit. Closing attorney or title company checks title. Not sure if the fact that the house was condemned was put on the title, some town halls are behind.  Beyond that it's up to you I'm afraid. All is not lost however. You now own the property and will have to make it legal. You should be able to get someone from the town to inspect the unit so at least you can get a certificate of occupancy. I don't know why they would need you to empty the house. That sounds ridiculous. What difference does it make? They aren't going to tear up the walls to see what's behind them. Get a plumber and an electrician to check the wiring to certify that there are no safety hazards. Beyond that the town should be able to work with what is there to deem it livable.  Next time check yourself. Any permits would be on the field card at the town. I wouldn't waste time sueing anyone because that doesn't fix your problem and will take years to sort out. Good luck to you. 
    Oh no, someone who thinks the guy laying out cash should have some responsibility, what's the world coming to?  However, if the house has been condemned I suspect there is something more wrong than just cosmetics. 
    By definition the place is unfit for use.

    condemn

    v. 1) for a public agency to determine that a building is unsafe or unfit for habitation and must be torn down or rebuilt to meet building and health code requirements. 2) for a governmental agency to take private property for public use under the right of eminent domain, but constitutionally the property owner must receive just compensation. If an agreement cannot be reached then the owner is entitled to a court determination of value in a condemnation action (lawsuit), but the public body can take the property immediately upon deposit of the estimated value. 3) to sentence a convicted defendant to death. 4) send to prison. (See: condemnation action, eminent domain, capital punishment)

    Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.

    Yes, they are going to tear off the sheetrock to make sure the wiring, plumbing and mechanical are up to code.  That's why you generally get the rough in inspected before putting up the drywall.  I suspect no tradesmen is going to sign off on work someone else did.
    No. This is not a new house. A town can condemn a property for a myriad of reasons. There might be repairs the previous owner didn't do and the city condemned the property. The plumbing and electrical can be checked at the box. Outlets can be tested. You don't have to pull the house apart to do that. Those items are checked on old houses all the time and there is no record of who worked on them. Also foreclosed properties tend to be a big mystery box. I've purchased old homes and the tradesmen were able to go in and check the plumbing and electrical wiring without ripping the sheetrock off. It's the connections that need to be done right so they can check that without doing too much damage. Ridiculous 
  • Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

     This is why you never purchase a property without a team in place. However, this is a simple fix. Just call the city, explain to them what happen. All the city cares about it making money, They will want permits pulled. They will come to inspect. If all repairs are done correctly no worries. If not rectify it 

    I am closing on a condemned property next week, all they care about is permits and doing it right  

    BTW I know most if not all " players " in the Cleveland markets, who did you buy from? Also which title company, I know them all 


     Unfortunately many of the repairs may be behind drywall; a/c, electrical, plumbing.


     Irrelevant if you know how to navigate the Cleveland markets/ inspectors 


     I guess in Cleveland, city inspectors have X-ray vision.

    I have been involved with 1ks of rehabs in the Cleveland markets, and got to know many of the inspectors, most have common sense. Its all about knowledge and your team. I am closing on a 4 unit condemned building this week, most would run away. When we are done it will be brand new everything, and bringing in about 40k a year, net about 30k, with an all-in price of about 115k, 
    All the best  

     Sorry, if a house is condemned, I assume the structure is possibly compromised, the wiring needs to be replaced as does the mechanical and the plumbing needs to be checked, all of which needs to be seen to be cleared.  If you've got inspectors signing off on work they haven't seen, that's not common sense, that's shooting craps the building doesn't collapse or burn down with someone inside.  I couldn't take tho

    I do not buy if structure issues, We will be putting in all new everything,Plumbing, electric, baths kitchen ect.  

    Now regarding the person how started this post, I have no idea what is wrong with the place. The city may have condemned it as it was just sitting vacant, NOTHING to do with any major issues. I will find out later today and let him know. I am hoping for him that it is just cosmetic.

  • Member since 2022 · 142 posts · 61 votes
    3y
    Quote from @Kenneth Garrett:

    @Bob Stevens

    Hi Bob, sorry to hear about your situation. Condemnation only means the house is unfit for occupancy. It doesn’t mean anything more than that. I disagree the city only cares about revenue. It is there obligation to ensure the unit’s are compliant with building codes. Fees are just a means to get compliance.

    During due diligence, I always fill out a FOIA request (Freedom of Information Act) through the city. I ask for any code violations on the property, history of permits, outstanding permits, outstanding water bills, zoning district and compliance and litigation that might be ongoing. The information is free and takes about a week to receive the information or less. That would have avoided this unfortunate situation.

    Contact the city and work with them on what needs to be done. I think it’s unnecessary to move tenants out for them to inspect. This is going to be sensitive with the city. Just because a property is condemned does not mean it’s recorded. A title search will not necessary reveal this.

    You may need to hire an attorney if it becomes ugly with the city. I was a building and zoning official for over 30 years feel free to dm me.

    Exactly. Your post was spot on. The city officials aren’t trying to give people a hard time, they are just doing their job. I’m sure something reasonable can be worked out. 👍
  • Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
    3y
    Quote from @Peter Walther:
    Quote from @Steve K.:

    Title company should have caught this so this will likely be a title insurance claim. Contact your title company. 


    I don't know if you mean the settlement company, the title agent or the title insurer but why is it automatically the "title company's" fault.  Why doesn't a buyer have the responsibility to do his/her own due diligence?


     The buyer does their due diligence by ordering the title work, which is done by the title company, who in turn insures that the home’s title is free of clouds or defects such as judgments, liens, bankruptcies, condemnation etc. that would prevent the seller from transferring clear or marketable title to the buyer. The buyer is almost never going to do all the title work themselves because they're not usually trained in how to look for past deeds, wills, trusts, divorce decrees, bankruptcy filings, court judgments, tax records etc. that may be defective or outstanding. This is why we use title companies to handle transactions, and why we have title insurance. I always splurge the extra $90 (or $45 each for buyer and seller typically), for extended coverage.  

  • Investor · Miami, FL · Member since 2015 · 1k+ posts · 390 votes
    3y

    Work with city to resolve - Housing department should be able to come to a reasonable solution if home is serviceable condition  

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Caroline Gerardo:

    @Peter Walther we don't know what the condemnation cause is, there are chemical ones in Cleveland and area surrounds # OHD98061454

    Title company is not going to cover things the seller lied about. Seller knew it was condemned.  (if they got title insurance)

    the seller filled out a statement of identity.  @Veena Vaidyanathan get your hands on a copy to find out who is the real seller. 


     Title insurance covers all kinds of things the seller may have lied about.  For example, if the seller is not actually the owner, probably covered, seller had judgments against them which were properly recorded, possibly covered . . .etc.  My original reply to your post was just correcting the impression the 8.1 or 9 endorsements might be applicable in this situation.  I believe they're not.

    I handled a title claim one time where the property had been red tagged and sealed by the county because it had been used as a meth lab.  That normally would not be a covered matter.  However, the county also recorded a Notice of the non-entry order in the public record that was missed in the title search.  While I thought the claim could have been denied because technically an order of non-entry probably does not go to title, I thought if the matter went to court a judge might opine that it did.  As a result, I hired a company that did meth remediation (who knew there was such a thing) to bring the property back to code.

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Steve K.:
    Quote from @Peter Walther:
    Quote from @Steve K.:

    Title company should have caught this so this will likely be a title insurance claim. Contact your title company. 


    I don't know if you mean the settlement company, the title agent or the title insurer but why is it automatically the "title company's" fault.  Why doesn't a buyer have the responsibility to do his/her own due diligence?


     The buyer does their due diligence by ordering the title work, which is done by the title company, who in turn insures that the home’s title is free of clouds or defects such as judgments, liens, bankruptcies, condemnation etc. that would prevent the seller from transferring clear or marketable title to the buyer. The buyer is almost never going to do all the title work themselves because they're not usually trained in how to look for past deeds, wills, trusts, divorce decrees, bankruptcy filings, court judgments, tax records etc. that may be defective or outstanding. This is why we use title companies to handle transactions, and why we have title insurance. I always splurge the extra $90 (or $45 each for buyer and seller typically), for extended coverage.  


    One more time, in my opinion, in general, an order of condemnation does not prevent a seller from conveying good and marketable title.  The seller may have breached other provision in the contract for sale and purchase but the title to the real property remains unaffected.  If you have some case or statute that leads you to a different conclusion, I'd really like to take a look at it.  If you have an extended form policy, it may be a covered matter but that is because of other provisions of the insurance contract, not because the title has been affected.

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Sylvia H.:
    Quote from @Peter Walther:
    Quote from @Sylvia H.:
    Quote from @Veena Vaidyanathan:

    Hi All, Noob out of state investor and this is my first investment property. 
    I recently closed on a duplex in OH. Both units were being rented. However Renter 1 stopped paying rent during the ownership transition.

    Property management tried to register the property with the city to start the eviction process.
    Shocker: When they attempted to register, the city responded back saying this property is condemned.

    It appears seller purchased this condemned property, renovated it however didn't get the necessary city approvals and permit. None of this was surfaced prior to the purchase.

    PM is saying we'll need to evacuate both renters and run a complete city inspection which is going to take several months if not a year.

    Looking for help here. 

    Question 1) At what point should this have been caught? Can I go behind the seller or real estate agent with a legal action?

    Question 2) Should i evacuate the tenants and proceed with city inspection. Any prior experience dealing with this situation. Both time and money?

    Question 3) What should my priority be in terms of next steps here?

    Common sense indicates that you should have checked that apartments were in compliance prior to buying the home. It is up to the buyer to perform their due diligence prior to closing on a property. A realtor isn't going to do that for you nor is the lender. Lender is only concerned with value should they need to foreclose, realtor is only concerned with is this a legal 2 unit. Closing attorney or title company checks title. Not sure if the fact that the house was condemned was put on the title, some town halls are behind.  Beyond that it's up to you I'm afraid. All is not lost however. You now own the property and will have to make it legal. You should be able to get someone from the town to inspect the unit so at least you can get a certificate of occupancy. I don't know why they would need you to empty the house. That sounds ridiculous. What difference does it make? They aren't going to tear up the walls to see what's behind them. Get a plumber and an electrician to check the wiring to certify that there are no safety hazards. Beyond that the town should be able to work with what is there to deem it livable.  Next time check yourself. Any permits would be on the field card at the town. I wouldn't waste time sueing anyone because that doesn't fix your problem and will take years to sort out. Good luck to you. 
    Oh no, someone who thinks the guy laying out cash should have some responsibility, what's the world coming to?  However, if the house has been condemned I suspect there is something more wrong than just cosmetics. 
    By definition the place is unfit for use.

    condemn

    v. 1) for a public agency to determine that a building is unsafe or unfit for habitation and must be torn down or rebuilt to meet building and health code requirements. 2) for a governmental agency to take private property for public use under the right of eminent domain, but constitutionally the property owner must receive just compensation. If an agreement cannot be reached then the owner is entitled to a court determination of value in a condemnation action (lawsuit), but the public body can take the property immediately upon deposit of the estimated value. 3) to sentence a convicted defendant to death. 4) send to prison. (See: condemnation action, eminent domain, capital punishment)

    Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.

    Yes, they are going to tear off the sheetrock to make sure the wiring, plumbing and mechanical are up to code.  That's why you generally get the rough in inspected before putting up the drywall.  I suspect no tradesmen is going to sign off on work someone else did.
    No. This is not a new house. A town can condemn a property for a myriad of reasons. There might be repairs the previous owner didn't do and the city condemned the property. The plumbing and electrical can be checked at the box. Outlets can be tested. You don't have to pull the house apart to do that. Those items are checked on old houses all the time and there is no record of who worked on them. Also foreclosed properties tend to be a big mystery box. I've purchased old homes and the tradesmen were able to go in and check the plumbing and electrical wiring without ripping the sheetrock off. It's the connections that need to be done right so they can check that without doing too much damage. Ridiculous 

     I just had a knew a/c and electrical panel installed in a house I own.  The panel passed and the permit closed.  The a/c failed, and the inspector noted the deficiencies.  The permit remains open and I called the a/c company to correct the problems.  The county did not condemn the property.  If the OP's property has been condemned, I suspect there are major, life threatening, problems.  I'm of the opinion it's not a matter of a couple of broken windows and a dangling wire.

  • Member since 2021 · 8 posts · 8 votes
    3y

    Bob Stevens has been helping me sort this out. Thanks everyone else for pitching in, sharing your ideas.

  • Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 

  • Investor · Member since 2021 · 591 posts · 695 votes
    3y
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     that begs the question: what was the fix?

  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     Yes, please let us know how the problem was fixed.

  • Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     Yes, please let us know how the problem was fixed.

    Again very easy, We are going in tomorrow to access what was done or needs to be done and taking care of it. According to the tenant whom I spoke with today, nothing is wrong and is very happy. The video I received also indicate the property is nice. Will know more in 24 hours  


  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     Yes, please let us know how the problem was fixed.

    Again very easy, We are going in tomorrow to access what was done or needs to be done and taking care of it. According to the tenant whom I spoke with today, nothing is wrong and is very happy. The video I received also indicate the property is nice. Will know more in 24 hours  



     Why was the property condemned which by definition means the improvement is uninhabitable?

  • Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     Yes, please let us know how the problem was fixed.

    Again very easy, We are going in tomorrow to access what was done or needs to be done and taking care of it. According to the tenant whom I spoke with today, nothing is wrong and is very happy. The video I received also indicate the property is nice. Will know more in 24 hours  



     Why was the property condemned which by definition means the improvement is uninhabitable?

    Well you would think that, But in the Cleveland, (maybe other cities as well) they condemn it if there has been no utilities for several years. I spoke with one of the tenants yesterday, he said place is great, no issues. I even have a video of the exterior, looks good as well. I called the inspector he also believes it was just because of no utilities. Will find out in the morning. 
  • Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes
    3y
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Peter Walther:
    Quote from @Bob S.:
    Quote from @Bjorn Ahlblad:

    @Veena Vaidyanathan this is not right and it will get worse before it gets better. The seller, your agent, and the title company. Some or all may be at fault. Sooner or later you will wish you had gotten an attorney involved. You should get real legal advice ASAP.


     Its actually a very easy fix. Its all about knowledge and your team. Hiring an attorney will just be a waste of money,,,,,,, 


     Yes, please let us know how the problem was fixed.

    Again very easy, We are going in tomorrow to access what was done or needs to be done and taking care of it. According to the tenant whom I spoke with today, nothing is wrong and is very happy. The video I received also indicate the property is nice. Will know more in 24 hours  



     Why was the property condemned which by definition means the improvement is uninhabitable?

    Well you would think that, But in the Cleveland, (maybe other cities as well) they condemn it if there has been no utilities for several years. I spoke with one of the tenants yesterday, he said place is great, no issues. I even have a video of the exterior, looks good as well. I called the inspector he also believes it was just because of no utilities. Will find out in the morning. 

    I stand corrected, though in my defense I've never seen a municipality use the term so loosely.  

    Building & Housing FAQ | City of Cleveland (clevelandohio.gov)

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