Property Zoning Issues - First Deal Falling Through

[Megan Phillips]

Hi All, 

Under contract for a duplex. During title search a few weeks back, the issue came up that the lister's office has the property as a single family, but the current owners are clearly using (and selling) the property as a duplex... The seller's agent didn't respond to the issue for a while - almost 2 weeks. I'm assuming they didn't think it was as big of an issue as it has turned out to be -- they also claimed to have paperwork that verified it was a duplex when it didn't (town tax assessment has it as a duplex, but that doesn't change the fact that it is a non-conforming duplex in a "commercial" zone, so not legal). Overall, I believe the seller/seller's agent truly didn't know this wasn't a legal duplex. It was bought by the current owner in a foreclosure, and apparently, never verified to be legal with the town.

At the moment, I told my realtor the seller's could have until the original closing date of Jan. 30th to figure it all out. They are currently hoping to find some sort of miracle record that shows the owner that turned the property into a duplex, did it more than 15 years ago and the property is grandfathered into being allowed. They've been at this for several days already, it seems like it simply isn't going to happen.

I've included the zoning map, with a red circled area showing where the property is - the strip of commercial zoning is almost humorous (if it wasn't causing the deal to fall through) because it's blatantly a residential area. If it was residential, it would be a non-issue. The town doesn't seem willing to provide a variance in this case either.

My attorney is aware that this may not all work out, and I'm going to get their opinion of what sort of money I can expect back for costs incurred or what sort of liability the realtor's office and seller have. Does anyone have a similar experience, if so, what did you expect back from the seller for costs --- I have done the inspection, appraisal, title search, LLC formation, $1,000 deposit, etc --- not sure how much if this was Real Estate Tuition, and how much I should try to get back from the seller.