Non-Conforming Units in California

[Daniel Auriemma]

I am currently looking at a 4-plex California, the financials are strong (rare for California) and thw property wIll cashflow after a small downpayment and fIllIng up the main unit wIth a renter. After finding out it fell out of escrow last week I got more details and found that 2 of the 4 units were never permitted and are “non-conforming” units. If so, I have been doing some research and found that if they have been “continuously” rented that they are grandfathered in. Has anyone had experience with non-conforming units? Is that true that they won’t need to be permitted? Thanks BP Family 🙌🏼

[Cody L.]

Originally posted by @Daniel Auriemma:

I am currently looking at a 4-plex California, the financials are strong (rare for California) and thw property wIll cashflow after a small downpayment and fIllIng up the main unit wIth a renter.

After finding out it fell out of escrow last week I got more details and found that 2 of the 4 units were never permitted and are “non-conforming” units.

If so, I have been doing some research and found that if they have been “continuously” rented that they are grandfathered in.

Has anyone had experience with non-conforming units? Is that true that they won’t need to be permitted?

As a small government guy, I don't know what "non confirming" means.  If the state of California doesn't want to lease the units from you, fine.  But if you have a unit that someone is willing to rent, that's between you and them.  Not between you and California. 

I dug a "cave" under my home (it's nicer than it sounds :).  I leased it for $500/month for years (San Diego).  I'm sure it was "non conforming" but the dude renting it was happy to have something near downtown for $500, and I was happy with the few extra bucks a month.