03-12-2011 01:16 PM - edited 03-12-2011 01:27 PM
I have been looking at duplex in the LA area and have seen many, many properties that are zoned LAR1 but have 2 or even 3 units on them. These are properties that have been operating as multi-family for many years, but how exactly do variances and grandfathering work in these scenarios?
Isn't it possible that a disgruntled tenant could turn the property owner in to the housing authority? I don't want to buy something and then be at the mercy of a tenant, or be thrown into REAP?
How do you verify grandfathering or variances in these situations?
03-12-2011 01:30 PM
The best thing would be to go directly to the city's planning department in order to find out about any variances or grandfathering that are associated with any potential home purchase.
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03-13-2011 10:23 AM
OK, never dealt with the LA planning department but I know it's notoriously beaurocratic and complicated. I suppose I will have to go down there and wade through it for every property I have an interest in that's zoned LAR1.
A big part of my original question, though, is, how risky is it to buy a duplex zoned LAR1 that does not have an official variance or grandfather on record, if the property has been operating as a duplex for 30 years and is recorded by the city as 2 units (on an LAR1 lot).
03-13-2011 03:15 PM
Usually you can get financing on it if you can get whats called a "100% re-build letter" from the dept of building and safety division of the local municipality. It can be a challenge but not uncommon obstacle.
03-14-2011 03:32 PM - edited 03-14-2011 03:35 PM
It's not altogether clear from the description what's going on with this place. Many areas are originally zoned LAR 1.5 or 2, then downzoned later. Income property that was legal when built remains legal, though. Tax records will state whether a place is recognized as being a single family or multi-family when built/modified with permit, which is what will control over existing zoning laws.
What you would expect to see with a "legal", eg, previously recognized multifamily is the "multi-family/residential" under property type, and then the number of units under building description.
So do the records for the place you're looking at categorize it as a single family, and describe it as two units? Or describe it as a multi-family with "x" units but there are really "x"+1 (or more) on site?
If a unit is not legal, you could have a big problem if a disgruntled tenant turns you in, theoretically you are supposed to return/not charge rent, and then potentially face penalties and having to let them live there for free the whole time the thing is being adjudicated.
I was under the impression that the LA Housing Dept. enforced these issues, not REAP, which usually steps in when there are habitibility or safety issues with rental housing.
The only way to ensure that they are grandfathered is to go through the building records and confirm that there is a Certificate of Occupancy with the correct number of units. You could try and get a new c of o with the correct number of units based on the historical record. However, in my own experience and that of a friend it is not easy to do and there is a very good chance it won't work unless the record is crystal clear.
I also get the impression that LAHD is stepping up enforcement of such things, I would try and stick with stuff that is clearly legal or easily legalized at this point.
03-15-2011 12:09 PM
California Government Code Section 65852.25 states that you have the right to rebuild/restore to previous nonconforming state. Some lenders may require you to get a letter from the city stating this, which can be very easy, or they may put up a fight that you will win eventually.
03-15-2011 02:35 PM
If the property shows as units i the tax assessor rolls then you are ok. if not, you are not able to legally rent it and any rents you collect could arguably be returned to the tenant based on case law.
Be very careful with this type of sitution.
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