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Quest

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Reply with quote  #1 

Hi all,

I wanted to ask folks on the forum about an issue we found out today.

We purchased a rental property in Riverside County in 2013. This was a foreclosure, so we never met the previous owners, or get any detailed information about the home from the REO bank that owned it.

When I called Riverside county today for a different issue, I found out that the previous owners of the home had applied for a permit to build a second storey addition to this home in 2006, but the permit was voided. But the home right now is actually a 2-storey home, so it looks like that the previous owners built the second storey addition (it is about 900 sq ft total) even though they did not get the building permit approved.

I wanted to ask folks here advice on what we should do. If I were to approach the Riverside county building code department to get this addition legally permitted, how much would the approximate costs be? Will there be a lot of paperwork and other hassle involved in getting this done?

Or would you suggest I stay silent on this matter, since this is how the home was when we bought it and we were not aware of this till today. It does not look like the county knows about this either.

Any advice on this matter would be very helpful. Thanks for your help and suggestions.

rickencin

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Reply with quote  #2 
Doing nothing may be the best choice.  I suppose if you have to evict someone they could make a stink about the house having code violations (so don't ever mention it).  When you sell the house be sure to say something in the disclosures like "it is unknown if the additions are correctly permitted".  If the buyers like the house they may buy it as is. 
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larrywww

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Reply with quote  #3 
No easy answers.  Since you know it's not legal square footage, arguably you can't include it in the description when you sell.  What does the assessor's description say?  If the assessor includes it, there's an argument they must be basing it on something, but not really compelling and air tight, etc.

Consult a builder about what it might cost to make it legal, but tell them to tiptoe around the city if possible.

Even if you build an illegal addition, unless it's a type of construction that isn't zoned for that area or otherwise 
inappropriate for the house in question due to various circumstances, depending on the city, they will sometimes still permit you to build.   Although caveat there might be building moratoria that might apply, etc.  Does it perk?  Probably wouldn't have had the original construction if not.  Is it in a landslide area, liquefaction zone, sandy soil where the city doesn't want to build?     Was original construction according to code?   Did it observe correct setbacks? The possibilities are endless.

Sometimes they double the development fees or install other punishments, but that usually isn't cost prohibitive.  That wouldn't necessarily be a game changer, but other situations might.

The other question you need to ask is what kind of improvements will the city require to "bring it up to current code".  Depending on what the city is seeking to promote, that could be pricey---no way to tell unless you investigate.  But the improved standards might make it somewhat more valuable.

But the one important truth is about the current market---marginal inventory like this needs to be sold in a hot market. Assuming there is some way of legally selling it, that would be the best outcome, if that is possible---but significant obstacles exist to that solution.

These are some considerations, I'm not sure what course of action that would dictate.
thejq

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Reply with quote  #4 
Do you know why it wasn't approved? If the original foundation, supporting columns and beams were not built for 2 story, resubmitting the application will not help you. If so, and the original owner build the 2nd story without proper engineering calculation for load and seismic activity, there could also be liability and safety (eg. personal injury and death) issues if the building ever collapses. Adding a 2nd story is much different from a garage conversion or adding a bathroom, and 900 sft sounds like a significant addition. Without knowing how it's built, I would not be comfortable putting myself and my family in that house. Also if you ask too many questions, the people at the city might become suspicious. A simple Google street view could reveal the violation.

I agree with Larry, there's no easy answer. And whether you can count the footage is probably a secondary concern for you at this point.
brycewheeler

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Reply with quote  #5 
REAL DILEMMA

Liability laws for real estate sales in  California seems to  be very close to DISCLOSURE, DISCLOSURE, DISCLOSURE so you may want to face up to the problem and either correct it (get permit, re-build,repair, correct etc.), or sell it with full disclosures, or just teardown the "improvment" and tidy up whats left.   May not be as bad a result as you think, and you can sleep peacefully at night.  I have had to later correct couple of my purchases with unpermitted back rooms, garage rooms etc. and it seemed destructive at the time to correct and make legal but I always still came out ahead when I later sold the propeties.

Side-stepping the problem and passing it on to someone else without close to a full disclosure and giving only obtuse, bare hints seems to skirt the Golden Rule.

I wish you a positive solution!
Quest

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Reply with quote  #6 
Thanks rickencin, larrywww, thejq and brycewheeler for your replies.

I checked on the Riverside county assessor's website, and the total square footage for the home listed there, matches with what the total sq footage of the home is now (with the addition included). So I was wondering - if no permit was pulled, will the assessor make the change to include the additional 900 sq ft for the home, without proof of an approved and finalized permit?

Also, can someone recommend a good builder or general contractor who works on room additions in Riverside county, and is familiar with pulling permits for construction? I would like to discuss with them what the best way would be for me to move forward on this issue.

Thanks for all your help.
MJohnson

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Reply with quote  #7 
I doubt he works Riverside, but Ian Scattergood specializes in permitting unpermitted additions.  619-579-0088; he might have advice or know someone who can help you.
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Matt Johnson, Certified Distressed Property Expert (CDPE)
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Quest

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Reply with quote  #8 
Thanks Matt for the reference. I will get in touch with Ian Scattergood to discuss what I should be doing. Will also ask him if he knows anyone that does work in Riverside county.

If anyone else has a reference for the contractor doing work in Riverside county (mainly for permitting unpermitted additions), that is much appreciated.

Thanks.


larrywww

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Reply with quote  #9 
There's a bit of an anomaly here.  If the assessor is crediting you with the full square footage, I am assuming (ONLY an assumption---the facts could show otherwise) that they must have seen something that at least convinced them that it WAS somehow legal square footage.  

Normally, in this situation you would not see the extra square footage and your task would be to convince the appraiser that it's legal square footage, built to code, etc etc.

Keep in mind that this is their job---they are tasked to make these kind of determinations---they hire appraisers to arrive at highest and best value for all structures---and this is absolutely part of their job description.

The appraisers who work for local governments in my experience are very good since they get so much hands-on experience.  (Especially in today's market where sales are not as robust in many places).

Truthfully, I have never seen this, so I don't know what to tell you.

But you might mention to whomever you hire---it might simplify the problem.
Quest

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Reply with quote  #10 
Thanks Larry for your comments. What you mentioned above is what has confused me too. The assessor mentions the "new" correct sq footage, but the permits pulled on the property show the 900 sq feet addition permit as "void". I am hoping the assessor saw some proof when making the determination of the new sq footage. 

Even though this was a REO purchase, we went through the normal buying procedure (got bank financing, an appraisal and home inspection, pulled title and got title insurance, also re-financed once), and no one ever mentioned anything about this. It just came up when the person on the phone at the county told me about this "void" addition permit (and I see that online too). I lost some sleep due to this. [smile] Because getting unpermitted additions approved could turn out to be a very expensive and time-consuming affair.

Could it be possible that the county has misplaced the permit that approved the addition on this home?

Also, on the assessment, does it mention anywhere whether its a one-storey or two-storey home? I could not find it, all it says is the sq ft and beds/bath.

Thanks.
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