The city is claiming my 4 unit is really a 3 unit. What should I do?

[Trevor Davis]

In 2021 I bought a 4 unit property as my first investment property.  Code enforcement is now telling me I only have a 3 unit property, so I have to kick my tenant out of the newly upgraded unit.  

I got a loan on the property when I bought it.  It appraised as a 4 unit property.  I had it appraised a couple years later and it appraised again as a 4 unit.  I have 4 mailboxes, and signs for all 4 addresses, and I've been paying sewer for 4 units.

I guess I need to set up a protest hearing, but what should I be doing before then?  Do I need to get a real estate lawyer?  If I want to prove my case myself, where should I look?  

[Dennis Bragg]

Hey Trevor,

Man, this situation sounds incredibly frustrating, especially since you’ve clearly done your due diligence on this property. I’ve seen something similar with a friend in San Diego, who bought what he thought was a legal duplex. After months of back and forth with the city, he uncovered an old permit proving it had been a two-unit property since the ‘70s. That little piece of paper saved him a fortune in legal fees and stress.

Gather Hard Evidence: You’ve already got a strong start with appraisals showing the property as a four-unit. To add more weight to your case, dig deeper into local records. My friend once found an old zoning map from his city archives that helped prove his property was being taxed incorrectly. Try reaching out to the Thornton Planning Department for any documentation they might have on file.

Check Legal Precedents: Look for similar cases in your area. Other landlords or investors might have fought similar battles. Sometimes, these cases are documented in public records or landlord forums. If you can find a precedent, that could bolster your argument significantly.

Lean on the Physical Details: Four mailboxes, four sewer lines-those are big indicators that the property has been treated as a four-unit for some time. Be sure to take high-quality photos, and if possible, request utility records that confirm separate billing for four units. In my experience, physical evidence like this has been a deciding factor in cases like yours.

Consult an Expert: Even if you plan to handle the hearing yourself, an initial consultation with a real estate attorney could be invaluable. They might spot arguments or angles you hadn’t considered. In Colorado, zoning disputes can get complex, and local attorneys often know how to navigate the system effectively.

Engage Your Tennant: Transparency is key. Let your tennant in the “disuputed” unit know what’s happening and discuss temporary solutions in case this drags on longer than expected. Keeping them in the loop could help avoid conflicts or complications down the line.

Lastly, think about framing your case around fairness and practical impact. Cities don’t want to displace tenants unnecessarily, especially when the property has been used as a four-unit for years. Focus on the human aspect as well as the legal side.

Have you tried connecting with local landlord associations or zoning consultants in Denver? Sometimes they’ve got resources or connections that could help speed things up.

What’s your biggest concern going into the hearing? Maybe we can brainstorm some strategies to address it.