nonconforming rental units.

[Jean Mercer]

I would shy away from

purchasing a building with

nonconforming rentAL units.

The city can shut you down

and make you convert them back and at today's codes.  It can be very expensive.  I  speak from experiance.

[Matt Devincenzo]

Non-conforming refers to a zoning status and is "applied" to a property by the city/municipality as they update zoning restrictions. 

So as an example: I have a SFR it was built in the 1930's. At the time the area was zoned residential and homes were built. One street over has become a major corridor road (2-3 lanes each way with dedicated turn lanes and every intersection is a light not a stop sign) and so it has commercial type properties (retail strip, gas stations, small offices ect.) Since then over time the City plan has been updated or changed to reflect how the area has changed and they expanded the commercial zoning over a couple streets.

It makes sense when you look at City planning as a 20-30 year future thinking goal. The major corridor being there it makes sense to expand the commercial zoning there since the business type traffic will be using that road. My SFR was already built and was, at the time, an appropriate use. But when they changed it to commercial it all of the sudden became non-conforming.

So if you look up my property on the City's site it calls out the zoning as commercial with a non-conforming residential use. As long as it is a SFR it can be used as such, but if I decide to tear it down and rebuild at that point they will be looking at me rebuilding in light of what is the allowable zoning for today.

It also gives me options. Since it is one street over and is quieter than the main street it would be perfect for a lawyer/accountant/doctor's type office. So I could convert the home to an office type use and add a small 5-6 car parking lot in the rear. When I did that I would lose the non-conforming residential use going forward. 

There may be areas near you where you can see something similar, lots of "cute" older homes on a fairly busy street that are now used as professional type offices. I bet if you were to look back through the City plan you'd see a similar trend. At one time the area was all residential and over time one of the streets became the kind of business district, so the zoning changed to reflect that, and over time those old homes have been "re-purposed" into offices. 

Same City there is a downtown historic district. In the historic district they have decided that in order to preserve the historic character that homes are to be SFR since that is what it was originally built as. There are few large 6-8 bedroom homes that were converted legally to duplex or triplexes. They were done with permits and are legal since they received a City approval to be converted years ago before the historic district went into effect. Today you will never get an approval to do that with any of those homes, but those units are allowable because they pre-existed the change in the use guidelines. Again they are "non-conforming" units.

There are also a few (I suspect) illegal units. These are those same large homes that have been converted without permits into 2-3 unit properties, and those homes risk being "caught" and the city code enforcement will slap them with violations and require that they convert them back into a SFR.

It sounds like a property you bought likely fell into this category, and you were unaware of the fact that it was not legally able to be used in the fashion that it was being used. And as you said it can be a costly issue to remedy if you happen to be the owner at the time that the violation is discovered. You can find out it's status by researching the actual zoning, and permits that have been pulled for any past construction....if the tax assessment says it's a SFR and there were never any building permits pulled or a variance granted for a conversion, but there are four units, then you probably have an unpermitted use.

Sorry that ended up being so long, but I hope that helps to clear up the distinction.