All Forum Posts by: David He

Hi Anthony, yes we did have some concerns that work was done without permits before closing. I called the county building office and asked them for check for permits on the property and there were none on file since year 2000. I asked my realtor about this and he replied that most interior renovations do not require permits. As for the property disclosure, the seller disclosed that they made structural or additions to the property, and that there were no permit or zoning issues. 

We did consult with several attorneys about taking the seller to court and none said that we had a very strong case here since the seller is claiming that had no knowledge that the permit issues exist and that this would be difficult to prove in court. But I do believe the seller must have known this since they are an LLC that specializes in real estate. How could a real estate company do this not knowing that they need to pull building permits for work done? But even so, the attorney cautioned against going to court since we will need to get expert witnesses to testify on top of spending $5k-$10k just to retain an attorney.

Dear bigger pockets, 

My wife and I are both new to multi family investing and I posted two months ago about a "failure to obtain permits for a duplex" citation for a new multi-family property we just acquired. 

You can read more about here. But the tldr version is that the seller had turned a single family home into a duplex which they didn't get permits for and now as the new owners, we are on the hook for the missing permits. 

We currently live in one unit while renting the other. The officer's main issue is not with us renting out the property, but with work that was done and no permits were obtained. So I asked him - if we bought a house that was not a duplex but also had a lot of work done without permits, would we still be required to get permits for all the work that was done, and he said yes. 

But my real estate agent believes that we are only responsible for getting permits for any new work that we do and that the county cannot force us to get permits for work that was done before and suggested that if we just ignore the county, this will just blow over.

I'm reluctant to take this approach and I would appreciate everyone's advice here. I don't care about the legal designation of the property as a duplex and just want a property where I can rent out both sides. What the previous owner did was just partitioning the house into two sides by installing a board. The house is still single family in every other respect.

I'm not sure why I would have to turn it into duplex in order to rent it. The county said that if I don't turn it into a duplex, I need to turn it back into a single family and get permits for it. It's my property, and I would think I have the right to partition the house how I want without the county telling me how it should be. 

I'm meeting with the county supervisor tomorrow and I plan to prepare as much as I can. If anyone has any suggestion or knows of any statues regarding a homeowner's right of being able to modify his property and rent it, or being required to get permits for all past work under the previous owner, I would greatly appreciate it! 

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. 

Update: this morning my tenant Venmo'd me the rent. She didn't offer much explanation, except that she was at work yesterday and couldn't answer my call. I was thinking to myself, what about all the texts I sent you? 

I was just about to mail her the 5-day notice but luckily the post office was closed yesterday so I didn't send it. Now I don't think we will have an issue with her moving out by the February 21st and I'm relieved we will not have to evict her.

Thank you for everyone's replies. When I start the new lease with the next future tenant, I'll be sure to keep your comments in mind and I'll also be adding a late payment clause to the lease to encourage timely payment.

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. 

@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.

@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.

@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

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

Hi everyone, thank you all for the great replies. To the person who asked which month of rent she is paying, it's the January rent. 

It seems unanimous that I should file eviction. Looking at this from a purely business perspective, it's certainly the right thing to do. 

That was the direction I was also leaning in but I decided to do one more thing prior to this. I called the previous seller and asked her what was her experience with the tenant.

To my surprise, it was quite positive. The previous landlady (seller) told me that the tenant was communicative, honest, and usually paid her rent on time. And when she couldn't pay, it was usually due to some major event such as an accident, and she would always communicate it. 

And right now, there are two major events that could impact her ability to pay. There is a major snow storm in the East Coast, and she is at home taking care of a granddaughter with Covid. The previous landlady advised me to ask that if it would be easier if I had someone come by her house to pick up the rent in cash. And if I plan to file for eviction, to let her know first so she can try to reach out to her previous tenant to resolve the issue. 

I think I'll follow the previous landlady's advice and give my tenant some extra time to reply and get her business in order. However, I'll be mailing her a 5-day notice first thing tomorrow for non-payment of rent so that if I still get nowhere, I can file for eviction right away.