Should I fix (permit) an Un-permitted ADU or Duplex

[Micah Shelton]

I bought a cool house back in 2020 that was historically being used as a duplex. Two of everything except Electric and Water service. I have it operating as such to this day. I went to refi and pull some equity out and they asked if it was a SFR or Multi. Per the city it is still a SFR as it was not permitted to be a duplex or SFR with an ADU.

Per the City codes folks she said I could do nothing or go through the permit process for either and get the dual spaces approved. Challenge being if it doesn't meet one of their code requirements I have to fix those issues. I feel confident it would pass with possibly minor changes. 

If I do nothing this could effect how I sell it in the future, could effect refinance options, ect. Per the city they are waiving the 10k in potential permits if I go the ADU route but you have to sign a 10yr no short term rental clause. Go the duplex route you gotta pay the piper..

Would appreciate any guidance.