All Forum Posts by: Matthew L.
Matthew L. has started 1 posts and replied 5 times.
Post: Seller non disclosure of open code violation
- San Francisco
- Posts 5
- Votes 0
Quote from @Carlos Ptriawan:
Quote from @Matthew L.:
Quote from @Carlos Ptriawan:
1. DO you purchase this as rental or OO ?
2. Do you purchase the house with you as single bidder only or not ?
3. Have you run the appraisal on it ? this is the key to determine the value of ADU.
I just want to say, regardless the ADU has code violation or not, the next buyer would buy the house more expensive than you. Why ? since it's located in San Jose.
You need to check the rule regarding grandfathered ADU, it's bit more complicated. Actually even if the ADU is not permitted, but if it's for OO, it's not really become an issue in all practical matter, especially if the appraisal and price is correct to the market.
that's a good point. rather than backing out directly, i am thinking about negotiating a price minus the value of ADU + demo. we've not run appraisal on it (didnt get that far) but ive a sense of general comps with similar size. I checked all the rules regarding grandfather ADU, does not apply but understand your point if we can get a price that is correct to the market since the appraisal does not factor in the ADU.
usually ADU price in San Jose's appraisal was........... zero
So I use this for your advantage.
Who care if it has code violation if the price is ......... right and it's Owner Occupied. You could always use it for storage,etc,etc.
IF the house is in Colorado, I would not buy, but this is in San Jose, I would buy regardless it has ten code violation.
fair. the problem is that the current price does factor in the ADU a bit (approx 25-50% of the sqft). And we were willing to pay that because we didnt know there was code violations...they did a very nice job on the inside. I think if we can get a good enough discount, we'll consider. Ive to think about pricing it without ADU (i kinda wish the appraisal came in as a point of reference)
Post: Seller non disclosure of open code violation
- San Francisco
- Posts 5
- Votes 0
Quote from @Carlos Ptriawan:
1. DO you purchase this as rental or OO ?
2. Do you purchase the house with you as single bidder only or not ?
3. Have you run the appraisal on it ? this is the key to determine the value of ADU.
I just want to say, regardless the ADU has code violation or not, the next buyer would buy the house more expensive than you. Why ? since it's located in San Jose.
You need to check the rule regarding grandfathered ADU, it's bit more complicated. Actually even if the ADU is not permitted, but if it's for OO, it's not really become an issue in all practical matter, especially if the appraisal and price is correct to the market.
that's a good point. rather than backing out directly, i am thinking about negotiating a price minus the value of ADU + demo. we've not run appraisal on it (didnt get that far) but ive a sense of general comps with similar size. I checked all the rules regarding grandfather ADU, does not apply but understand your point if we can get a price that is correct to the market since the appraisal does not factor in the ADU.
Post: Seller non disclosure of open code violation
- San Francisco
- Posts 5
- Votes 0
Quote from @Dan H.:
I have found a large non-disclosure prior to closing and therefore have some experience in this area. I will assume that the seller knew about the code violations (which was the case in my case).
It is unclear to me if you are still in your inspection period (typically 17 days in CA). If you are in the inspection period, you can pull out for any reason.
If you are beyond the inspection period, CA standard form requires a disclosure. I am assuming this was part of your contract. You can pull out and I suspect the seller will return you earnest deposit for a substantial non-disclosure (this definitely qualifies).
If you had found this non-disclosure after the closing, you could have sued the seller for the costs associated with the non-disclosure.
If you have issues getting the earnest deposit back, consult with an attorney. A letter from an attorney will get your deposit returned.
The seller is in the wrong for such a non-disclosure. This substantially affects the value and not disclosing it is an attempt to obtain a value higher than the property is worth. This seems like a good candidate for an off market property.
Good luck
Thanks for all the information. We did not have an inspection period (yes, i know dumb and lesson learned) but we are still in contract and have not closed.
They did disclose that the inside was not permitted but, not that there was an active code violation AND that they tried to permit the space but it was denied by the city due to ADU not above flood zone levels. I'd assume theres a difference between disclosing that its a non permitted space vs active code violation? Is there a difference in disclosure between the two?
My realtors is reaching out to listing team to see what they'll say. Buyer realtor told us she was not aware of the code violation either (crazy! but makes sense why it was not included in the disclosure) Hoping to get EM back! Will explore attorney route if they arent cooperative.
Thanks for all the information. We did not have an inspection period (yes, i know dumb and lesson learned) but we are still in contract and have not closed.
They did disclose that the inside was not permitted but, not that there was an active code violation AND that they tried to permit the space but it was denied by the city due to ADU not above flood zone levels. I'd assume theres a difference between disclosing that its a non permitted space vs active code violation? Is there a difference in disclosure between the two?
My realtors is reaching out to listing team to see what they'll say. Buyer realtor told us she was not aware of the code violation either (crazy! but makes sense why it was not included in the disclosure) Hoping to get EM back! Will explore attorney route if they arent cooperative.
Post: Seller non disclosure of open code violation
- San Francisco
- Posts 5
- Votes 0
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Post: Seller non disclosure of open code violation
- San Francisco
- Posts 5
- Votes 0
Hey there,
First time home buyer and after going into contract, we discovered there were open code violations on the garage conversion to ADU. House is in San Jose, CA. They did disclose that the inside of the ADU was not permitted, however, they did not disclose that it had open code violations. Does this merit being able to pull out of contract and collect our deposit back?
Background on the house:
1. In 2009, current home owner permitted a "shed/workstation"
2. Post 2009, they turned it into a living space without a permit
3. In 2017, neighbor reported them and they got a code violation
4. In 2018 they attempted to apply for an ADU permit and have it legalized with the existing plan, however, since it's a living space, it did not meet the flood zone requirements. House is built on a flood zone and needed to be higher off the ground then what a "shed/workstation" needs to be
5. Post 2018, nothing has been done. The existing 2018 permit has expired.
3-5 was not disclosed to us and we're now considering backing out because we dont want to absorb the headache that will come with getting it up to code (likely requires demo + rebuild or turning it back into a garage).
Do you think getting deposit back will be contested? Seller realtor mentioned she was not aware of these code violations either and is reaching out to the city to find out more. Seller was definitely aware. Luckily found this while in contract and not after we closed..
Appreciate the insight!