Buyer regrets bypassing home inspection
Q: I'm embarrassed to confess that I broke your cardinal rule: I bought a rental property without having it inspected, and now the chickens have come home to roost. The building was originally a single-family home, but the seller divided it into three separate living units by adding two kitchens and a few partition walls. The conversion was nearly completed, and the property seemed to be in acceptable condition. All that remained was some patch-up work in the new kitchens. Now that I own the property, the building department says the conversion is illegal. Only one kitchen is allowed in the building. The trouble is, I need three rents to cover the mortgage. What can I do?
A: You are definitely in a difficult situation for which there is no simple solution. The building department is the final arbiter of what is and what is not a legal use for a building. If the property is zoned as a single-family residence and the building department is enforcing that exclusive use, you have no choice but to comply with their requirements. Not only will you lose the benefit of the additional rental income, you must now incur the costs of reconverting the building to its originally intended use. Such are the unfortunate consequences of having avoided due diligence as a prospective buyer.
The lack of a home inspection, however, was not the only error that occurred during this purchase. A determination of the permit status for the kitchen construction was also needed. When buying a property that has been altered in any significant way, it is essential that buyers learn whether the work was done with permits and that the building department approved and signed off the work.
A further concern in this transaction is the lack of seller disclosure. If the work on the property was done without a building permit, the seller was obligated to reveal that circumstance on the disclosure statement. Failure to divulge matters of import to a buyer is a violation of law in most states. In that regard, the seller bears significant liability for your current position. Legal counsel on that point would therefore be prudent.
As you have already confessed the error of bypassing a professional home inspector, we shall forego the admonitions befitting that transgression. However, the prime homebuyers' commandment must be restated: "Thou shalt not forego a home inspection, regardless of circumstances." A qualified inspector would most likely have found defects in your unpermitted kitchens and would probably have advised that the building department be consulted regarding permits.
When buyers forego a home inspection, they save a few hundred dollars at the risk of many thousands. Buyers need to know what they are buying before they buy it. Foreknowledge is essential because expectations do not always equate with results. Or to paraphrase an adage, "Don't count your kitchens before they're patched."
• To write to Barry Stone, visit him on the web at www.housedetective.com, or write AMG, 1776 Jami Lee Court, Suite 218, San Luis Obispo, CA 94301.
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