2 Duplexes: Need for zoning compliance letter and cert of occup??

[Randy Frederick]

Hello BP community!

Need some advice from the more experienced members. We have owned SFR, but this is both our first foray into multi-family, as well as one with tenants in place.

Background: We have under contract a pair of duplexes that is set to close in less than three weeks. The properties were being sold as one package, but we discovered that each building is on its own lot. Thus, we had to break it up into two separate contracts, per the lender. No sweat. The properties were constructed in 1986 and are in an area zoned R6, which is for single family dwellings, but allows two family attached houses if they were there prior to the ordinance (which appears to be created in 1993). I spoke briefly with a RE attorney about this and he said I should get a zoning compliance letter from the city and to make sure there are two certificates of occupancy. I asked my closing/title company to help with this and they basically told me to go kick rocks (ie- they don't do this). I spoke to the city RE assessor office and there is an application to get a zoning compliance letter but they are on a backlog of 45-60 days. Three of the four units are occupied and have leases through July, August, and November. 

My question is: Do you just not worry about this, since it has been operating as a pair of duplexes for years, and just move forward with the deal and assume everything is honky-dory? Do you extend the closing date in order to obtain all this information? How important are these items to get (COOs and zoning compliance letter)? What is worst case scenario and how detrimental will that be to the deal?

Thanks in advance!!