From the Chronicle with respect to flipping homes with unpermitted work:
“A seller has the express obligation to disclose where there is any work that was not permitted as part of the transfer disclosure statement that is statutorily required in every sale of a one- to four-unit property in California,” [Jeff Lerman, a real estate lawyer in San Rafael] said. Sellers who fail to disclose unpermitted work leave themselves open to fraud claims by the new buyer.
A new owner who knowingly buys a property with unpermitted work “is responsible for any code violations should a complaint be made and an inspector find work without permit,” said William Strawn, a spokesman for the San Francisco Department of Building Inspection. “The new owner would then be responsible for obtaining the permits to legalize the earlier work.”
And remember, work beyond the scope of a permit can be as problematic as no permit at all.
∙ House flippers often skip city permits [San Francisco Chronicle]
∙ What’s The Right Way To Rat Out A Neighbor And Report Illegal Work? [SocketSite]
∙ How To (Illegally) Turn A Powder Room Into A “Legal” Full Bath [SocketSite]
∙ Unpermitted Work? Pshaw! What’s The Worst That Could Happen? [SocketSite]
How does this work in San Francisco when you buy a property with an unwarranted in-law with tenant?
The law seem to be contradictory. Could the protected tenant in an unwarranted unit fight an eviction and then fall down and sue you for a substandard unit?
Most un-warrented units are disclosed. And yes, there’s a decent amount of liability around illegal units.
With respect to illegal in-law units, I believe that even though they are against code, rent control still applies.
M.R.
yes, and that’s where the main liability lies. The unit is rent controlled, but if you get busted you have to evict, and the tenant can then put the screws to you.
You get caught between two conflicting laws, it can be quite expensive from what I’ve heard. Doesn’t happen often, but it does happen.