Tuesday, October 9, 2007

Building Permits

Sometimes I'm my own worst enemy. I just talked myself out of a sale by providing service that exceeds my clients' expectations. My clients were very interested in a wonderful old Central Tucson house. They even flew in from out of state to see it. They loved almost everything about it, and decided they could probably deal with the things they didn't love. Like many Tucson houses, this one has a guesthouse.

Tucsonans have a Wild West state of mind, so the chances that the guesthouse was built without a building permit were pretty high. I asked the listing agent whether the guesthouse was permitted. She didn't know, even though she represented the seller in their purchase of the property.

The guesthouse was about 25% of the total floor area of the house, and the additional area did not appear in the assessor's records. That is usually a pretty strong clue that the guesthouse was built without a permit.

It's possible to
look for building permits online, but the records have been digital for only a few years, so to find anything older requires a trip down to the Maps and Records Department of the City of Tucson Development Services Office, followed by a battle with their microfiche machine. I found permits for all kinds of things pertaining to this house, but I did not find the thing I needed most, a permit for the guesthouse.

I told my buyer that the guesthouse wasn't permitted, and he asked what were the consequences. Unpermitted structures are common in Tucson, and usually there are no consequences to purchasing a property with unpermitted additions, but I can't say that there will never be problems.

One of my neighbors was always worried that I was going to turn the big shed behind one of my rentals into an illegal guesthouse. I kept telling him I had no interest in doing that, but he decided just to be sure, he'd better call the City building code compliance office and have them check it out. They determined the shed was built without a permit, and they made me bring it up to current code. I had to add more studs, and attach the roof to the walls and the walls to the floor with some sort of fasteners. I made three trips to City offices over the course of a month and spent $1,000 on a shed that doesn't even have water or electricity.

I ran into a problem a few years ago selling a listing with an unpermitted carport-to-family-room conversion. The first buyer to make an offer on my listing demanded that my seller get a building permit for the addition. I learned that getting a building permit after a a structure is built is no easy matter. For starts, the permit cost is doubled. Then the owner has to draw the building as if he were applying for a permit to build it, and he has to show all the plumbing, electrical, framing, roofing and mechanical systems. Of course, he doesn't know what they look like, so the walls have to be opened to show the inspector. The foundation and all other systems must meet current building code (not the code when the addition was built), and the structure must meet property line set-back requirements. If it's not possible to do this, in theory, the City could require the structure be removed.

I have never heard of that happening, but because it's possible in theory, I always tell my buyers to consider this potential risk. Most of them don't worry about it, especially if they already live in Tucson and they know how prevalent unpermitted additions are.

Sometimes I will see a house with an obvious illegal addition (ceilings too low, windows too small, furnace closet or garage window in a bedroom, etc.) and the assessor has included the addition in their records. Although some people accept this as proof that the addition is legal, I recommend digging deeper. The assessor may have just added the square feet of the addition because the additional area showed on the Multiple Listing Service (MLS) listing. The assessor is only concerned with collecting enough property tax on the house. The larger the house, the higher the tax bill. The assessor is not interested in whether the building meets code.

I am told the City building inspectors do not have time to sneak around alleys looking for illegal additions. They only respond to complaints. But you might have a neighbor like I had, who called the City to try to prevent me from building an illegal guesthouse. Or if you or your tenants annoy the neighbors, they may decide to take revenge with a visit from a building inspector. Not likely scenarios, but it could happen, and I think it's my job to help you with your due diligence.

So, my buyer decided to wait for a less complicated house to come along. We're both disappointed, but at least he won't be asking me a few years from now what do I know about unpermitted guesthouses, and when did I know it.

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