Duplex zoned single family

[Raven Parmer]

I'm sure the answer to this question will vary by location, but here goes. We are under contract for a duplex with an additional carriage house apartment in Louisville, Kentucky. This will be a live-in flip, and we plan to rent the carriage house the whole time we are there- probably about five years. We plan to rent the first floor of the duplex for about a year, at which point we will convert the house back to single family. Our appraisal took forever, and we almost had to extend our contract because they would not give us an ETA. Finally got it back, and the house is zoned R5, which is a single-family residence. Basically the whole street and a few neighboring streets are also all zoned R5. I know for a fact that there are three 4+/- unit apartment buildings on the same block as this house. They were built as multi family and are used as multi family. I feel like this is a dumb question, especially with my background in architecture, but I work in commercial and I haven't dealt personally with any zoning issues. What kind of problems would we have if we continue to rent out this house which has been rented for years and years? It is separately metered, and I just don't understand how that was even done if the zoning was wrong. I know we can have the zoning changed, but I really don't want to go through that if it's not necessary. The area of Louisville that this house is in – the Highlands – is full of rentals and multi family homes. Right now the bank is working on trying to change the loan from a duplex to a single family so that we can close. That would actually be beneficial for us because the closing cost should be less. It looks like we are going to have to extend the contract either way, as it is up tomorrow. I appreciate any insight.

[Michael Seeker]

@Raven Parmer - you need to look at how the property is identified by PVA to determine how it can be used.  I invest heavily in Old Louisville which is mainly zoned TNZD.  That zoning allows for a maximum of 2 units, however anything in place when the zoning was introduced in the 80's is grandfathered in.  The only time I've run into an issue related to zoning was when I was doing a complete rehab of a building that was previously used as a boarding house.  It was set up and metered as a triplex, but some nosy neighbor complained so we had to convert from triplex to duplex to meet the zoning requirements.

PVA will likely classify the building as either "401 Com Tri-Plex", "405 Apartments", "510 Res 1 family dwelling" or "520 Res 2 family dwelling"

At the end of the day, if you are not making any significant changes to how the building is being used, then it's very unlikely anybody will come and tell you to change what you're doing.  However, if for example the carriage house is currently being used for parking and storage, and you decide to rent it out as an apartment, then you might run into issues.