How to mitigate risks of possible unpermitted unit?

[Henry Murray]

Hey BP!

I’ve googled this and asked around but I’ve found the forums here on BP are always a good source of advice with a lot of diverse perspectives.

TLDR: How do I determine if the potential unpermitted garage conversion on a duplex building I have under contact will definitely be able to be permitted in accordance with the city zoning rules? Who should I ask/bring in to get a conclusive answer about this? What else can I do to reduce my risk of not being able to get it permitted?  

So the long version is that I have a detached duplex (3BR/2BA and 1BR/1BA structures) under contract in Southern California right now that’s being offered as-is. The interesting part about this property is that I’ve been told that the garage has also been converted into a living space, which would mean that it has an extra 1BR/1BA unit. And apparently someone pays what looks like 60% of the rent for the other 1BR/BA unit for this area right now, so I assume it must be decently livable. I haven’t been able to get inside any of the units yet but my inspection is tomorrow. The seller’s agent is a part time agent and both he and the sellers seem to be very disorganized and old fashioned (they signed the offer by hand and faxed it back) and I don’t think they've done much to the property besides take off window awnings since they bought it a little over two years ago.

So I think there’s a large potential upside here because if I’m able to get the likely unpermitted garage conversation properly permitted and bring it up to code as needed, 1) it’d increase the total rent substantially and 2) it’d go from a duplex to a triplex which would be a great equity gain someday when I sell. (I’m also not sure why the current owner hasn’t done this but I’m trying to find that out. Either it wasn’t permittable on this property or they just didn’t want to invest the time/money in going through the process.) I’ve asked the city some vague and general questions about the process for getting unpermitted construction permitted after the fact and have an outline of the process from them so it seems like that part is possible.

However, the risk is that I don't want to find out just after after I've closed that getting the garage permitted as an ADU on this property would be out of code and therefore not allowed. It wouldn't totally kill the numbers but it would make it a lot more expensive to live there for a couple of years from a cash flow perspective. But the property would be a really sweet deal if I could make it into a triplex so that's obviously my goal. Plus California has a housing shortage as everyone know so a new unit in the city would be a good thing!

SO the question is, how do I mitigate the risk of not being able to get the garage area permitted as much as possible in the next week when my inspection contingency is open (and I have to make this decision)? Who do I talk to or bring in to conclusively determine if the property is eligible for an ADU under city zoning rules? And then also to make sure the 1BR/1BA unit isn't already counted as an ADU (since you can't have two ADUs for one single family unit).

I'm a bit wary of asking the city about this property directly because I'm not sure how they'd handle that and I don't want to make trouble for the current owner if indeed it is an unpermitted unit. I've also looked up and read the ADU zoning ordinances that I could find for the city and that was inconclusive. I'm going to try and pull permits tomorrow morning to see what I can find there too. Any other ideas BP? Anything else I should be watching out for here?