Buying an illegal Duplex recorded as a SFH and occupy both units

[Mathou Ba]

Hi everyone!

We are looking to buy a house listed as a Duplex but registered as a Single Family Home at county level (Alameda,CA). The county records shows a SFH with 1 kitchen and 3 br while in reality it is a Duplex with 2 kitchen and 6 bedrooms. The way it's built looks solid and in workmanlike manner. The seller has bought the property as an illegal duplex as well 40+ years ago.

The change in property characteristics has been submitted to the County by the seller but is still pending (answer to be expected by 2021 because of Covid backlog).

We are buying jointly as a family and would occupy both units. We know that the appraisal might limit our loan capacity in this scenario.

What is the potential future risk especially if the county rejects the official change to a duplex once we’ve bought the house?

Will it impact potential future permits requests (for example building an ADU in the backyard).

Anything else that you’d warn us about? (I know the risks if we want to rent such a place but this will not be the case)

Thanks a lot for your help!

[Sebastian Marroquin]

This happens a lot: 

1. Make sure you are not paying a duplex price for a SFH on title ? (unless you want to of course: as the market is very competitive right now).

2. Call building and safety and tell them your scenario: I would think of worst case scenario: which will be that you either get the necessary permits or knock it down. (get a contractor to check the work: foundation, framing, electrical, plumbing etc : as the city will check on that and will want to make sure that everything is ok to issue permits). 

3. There is a strong chance that they will require you to do building plans, with full details and engineering : with up to date building codes: you will need a drafter or architect. and why its important to google : building and safety and speak to the correct personnel. 

4. Look at zoning: set backs: and make sure that the lot allows for a second unit: 

Remember that a second unit is not the same as an ADU: different parameters: like set backs from property lines and from main structure, also parking requirements, lot coverage and allowable total sq footage.

All questions that need to be answered before closing escrow. 

If not: you will have potential loses. 

To recap; say a duplex in that area goes for $500k  and single homes go for $400k 

and you are in escrow for $400k + - : then you my friend are getting market prices and the 2nd unit is a plus and the home may be a good deal even after knocking it down or having to permit the second home after the fact.