Reaching out to see if anyone had any insight or experience with anything similar. Haven't had much luck or direction yet, and I'm sorry the post is so long! Wondering if this certificate of occupancy thing is something worth pursuing or if we should just let it go and chalk it up to a learning experience. FYI this is our first house so we are learning a lot to say the least!

Last November my husband and I bought a triplex in the city of Pittsburgh as a house-hack with an owner occupied conventional loan. We found it on the MLS and had a real estate agent. Every single one of our closing docs says triplex (eg appraisal, etc). The seller disclosures don't say anything about the occupancy. It only had one water heater, one electric panel, etc when we bought it as many small multifamily places do in this area. After closing we started some renovations and hired an electrician to separate the electrical for each unit. When the electrician went to pull permits from the city, he informed us that the occupancy permit is for a two family rather than three. We ended up having to separate the electrical into the common areas, 1st floor, and 2nd +3rd floor on one panel.

The zoning on our street is only zoned for single family (unless there's an occupancy permit stating otherwise), so we cannot change it into a triplex that way. At first I reached out to the city to see if we could have our property grandfathered in as a "legal nonconforming" triplex, but the city came back and said we would have to prove it was being used as a three family dwelling since prior to 1957. The house was built in 1925, and the two-family occupancy permit is from 2004. So unfortunately doing that is basically impossible.

I reached out to the closing company to receive the documents that came back from the title search. In them includes the permit of occupancy, clearly stating two family dwelling. The closing company told me that they hire out the title search, but aren't they supposed to look at the documents and make sure everything lines up? We would have wanted to negotiate the price down if they had alerted us of this during the closing process but they did not.

We bought it as a house hack, and are currently living on the first floor, renting out 3rd floor, and plan on renting the 2nd floor as well. Correct me if I'm wrong, but because we live there this is allowed because it's technically like renting out bedrooms in your house, right? If we rent out the 2nd and third floor we would live there for free and after all expenses make about $50/mo. However, if we move out I'm assuming we would legally HAVE to rent it out as a duplex, which would mean renting the 2nd and 3rd floors as one unit, and it would NOT cash flow that way. We would probably be about - $200 a month if we did that. We want to try to start getting our next property because it's coming up on a year that we have lived there, but do we even have that option? I don't want to move out and do another house hack at 5% down if we are going to be negative on cashflow on our current place. However, we don't have a ton of cash to be able to afford a 20% down payment on our next house. Do we have any options here? Thanks in advance!

Mariel Painter-Chapman

Pittsburgh, Pennsylvania

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