Question on Legality of Triplex

[Joshua Boyd]

Hi all,

I've been following the BiggerPockets forum and podcast for a couple years now, learning all I can and waiting until we had the money saved to buy our first home with an eye toward RE investing. My wife and I found an off-market triplex here in Atlanta that we plan to owner-occupy. The property is a triplex, originally built in 1920, with the main 3/2 on the ground floor, a finished 1/1 attic addition, and a studio apartment above a detached garage. The seller and I have agreed on a price and I am waiting on our agent to finish the offer contract today so we can get it officially under contract. That's the good news.

My question is: in looking at Fulton County tax records website, it lists the property as a duplex, and the city zoning is R-4 (Single-family residential). Does this mean that it is a likely a legal non-conforming duplex, but the third apartment is probably illegal? Both the attic addition and garage studio appear to be at least 25-30 years old, but I have no idea where to start looking to see if they would be grandfathered in. Any way for me to find out if this is a legal triplex on my own easily enough, without throwing the seller under the bus with the city? If not, would you wait until you had it under contract to bring up with the seller? I don't want to start paying for inspections and appraisals, or even just getting earnest money tied up, if I don't have to, and since we're using conventional financing, I don't want this to become an issue with the bank weeks down the road. If there's a strong case for waiting to ask the seller until under contract, I'd love to hear it, or better yet, some resource for me to find out myself that I haven't found yet.

Thanks for any advice,

Joshua

[Bill Gulley]

Let your lender run interference for you, and contract as a tri-plex being marketable. It will be the appraiser's job to ensure the property is conforming to it's use in the valuation. If it doesn't appraise out as contracted the lender won't make the loan and you should have a financing contingency in the contract, so you will be off the hook and get any money back. But you'll have the appraisal fee.

Hard for you to check and ensure compliance without sending up red flags really. Ask what R-4 is designated in the city, it is probably 1 to 4 units and you'd be fine. Tax records are often incorrect, tax records and code requirements are two different things, you can update the tax records with the Assessor, they are usually happy to take more money. Code violations should be caught with inspections.  You should be able to call the building regs folks and give the address and ask if there are any violations pending with it and ask how to search for past permits on that property.

Additionally, in your contract you can specify that the property be in compliance with current code requirements if it isn't already stated. If the seller makes that representation then they can be responsible for costs incurred if they were wrong. Get with your agent. Good luck :)