Does anyone rent out units less-than-legally?

Question

So this is half pointless rant, half looking for suggestions.

My mother-in-law moved in with my wife and I, and we'd like to rent out her house; she has a large house in New York. Unlike most of the country, her locality requires permits for even renting out a single family home.

While annoying, I decide to do the right thing and try and get the permit, even though everyone I talk to says not to bother since nobody else ever does.

In order to get the permit, the town needs to inspect the property and review the Certificate of Occupancy and a land survey, so I file a Freedom of Information Request to get those documents from the town (which is a whole other ordeal). I finally get them, and go down to town hall.

My mother-in-law's house is pretty big - six bedrooms, and a smaller second kitchen downstairs. It also has a large deck coming off of the second story. That was all there when she bought the house 25 years ago.

The first issues come when I get the CO, as neither the deck nor the second kitchen are mentioned. I go to town hall to get more information, and find out that even if the second kitchen was legal with a permit and all, it would still have to be ripped out, since it's only legal as long as the homeowner lives there. No rental home can have a second kitchen.

Regarding the deck that has been there for 25+ years - best case scenario is that an architectural firm would have to draft up drawings and a survey of it, and the town would have to inspect it and find everything up to current code. Worst case is that it would have to be demolished.

Also, the survey that the town had on file was too faded to read, so we'll need to hire a professional survey company to create a totally new one.

Plus the minutia of the things the town inspects is just frustrating. The house numbers on your mailbox are only 3" high? Hah, you just failed your inspection!

All this has me now leaning towards just not getting the permit, but I know that's potentially opening the door to trouble as well. Does anyone have any experience skirting the bureaucratic legalities and just renting a unit?

I'm sure if the town found out they could force me to bring everything into compliance with their regulations, in which case I'm right where I am now anyway.

The biggest thing I can think of to cover my bases in this case is very strong tenant screening.  Nothing is foolproof, but that should cut down on problem tenants which is where most issues would begin in this case, I believe.

Colleen F. · Answer

They are in your door now and you will likely get cited for a violation once you rent it.   You can take your chances but that may be worse in terms of consequences. If it is a per day fee for violation that could be an issue. Look into the fines if you really want to do it without the permit.

What is the policy if you rent a room or rooms?  Is it the same?

Would it qualify to be converted to two units?  Might cost some money but worth a thought if you are doing a survey and all that other stuff they want, you could get a bigger reward.

What constitutes a kitchen?  Is it the stove that puts it over the edge?  Take it out and make it a bar.

A 25 year old second floor deck probably won't pass todays standards.  In a NJ house we had to tie the joists into the house,  not  sure if that is true everywhere, the ledger and footers were often in adequate in older decks.   You don't want to deal with a deck failure with tenants so that is not something I would take a chance on.

The number size and visibility on your house is for rescue personnel.  We have had it come up in sales. Annoying but  if the  rationale  is for locating the house in an emergency it makes sense and it is an easy fix.

Just a few random thoughts,  I feel your pain.   Try to work with it, the survey I think is probably the most annoying one and in many cases unnecessary. If you think the town is bad  I have had some insurance companies with silly requests too.  Replace a cracked window on the barn...

You will need to switch the insurance type to cover a rental too.

Account Closed · Answer

It's easier to ask for forgiveness than to ask for permission.

Tyler Brown · Answer

Unfortunately for this, the town requires the gas line to be ripped out, and all plumbing must be capped off.

Also I was wrong about the deck - I thought it was there when she bought the house, but it's actually only about 10 years old, so that's good.

Deanna McCormick · Answer

I. re: second kitchen, remove the stove ( put it out in garage) and you should be OK, and no microwave in area for inspection. It's now a bar area and will not need to be ripped out.

2. Cost of survey is not that big of deal and good to have if you sell in future. If you can find the name of the old survey company they may have a copy on file, worth a try to find out.

3. Deck, after survey is done get the deck inspected by engineer that can verify that it's constructed to code.

4. Make sure smoke detectors, carbon monoxide detectors are up to code in rooms required.

Sounds pretty fair, could be worse.

Johann Jells · Answer

If anyone wanted to know why there's an affordable housing crisis in the NYC metro area, there it is.  "Density might bring in the wrong people, wink wink".

As for your OP question, of course people rent illegally, though most are rabbit warrens of rooms, attics, garages or basements rather than a large house like yours. I just heard a NYC councilperson is proposing legalizing some of these that can be conformed to code as a way of adding housing. Here in Jersey City there's plenty of these that are illegal simply because the basic zoning is 2 family or less. I would hazard a guess that unless a neighbor rats you out because there are 30 undocumenteds and 10 cars on the property you would not have a problem.

Colleen F. · Answer

I really would look into the deck construction if you plan to rent to be sure it is up to par regardless if you get a rental permit. It is a safety issue.  We had one house with a deck with a whole section that wasn't connected. We knew it was bad but really didn't know the extent of the issue.

Some towns enforce more then others.  Know your town if you decide not to permit it.  Also know your neighbors. We have a house down the street from the building inspector, we are careful with that one.

Tyler Brown · Answer

Well the house isn't really on their radar yet. Nobody has come to look at it and I haven't even applied for a permit. I went down to town hall and spoke mostly in generalities. They glanced at the CO and survey, but didn't even look at the address.

Renting rooms in prohibited unless the homeowner lives there.

Can't do a two family as the town doesn't permit any two family homes, except those that are grandfathered in.

It's not the end of the world if the kitchen is removed, but it's a nice selling point that I figured would increase the rent a little.

Tyler Brown · Answer

I guess we could, but we don't really need the big lump sum of cash for anything right now.  The house is paid for, and the rental income would be between $3,000 and $3,500 or so.

I'd like to rent it out for at least a year or two, since it sort of "fell into my lap" and I'm using this to gain experience landlording before expanding an acquiring more properties.

Lois Ginter · Answer

Just wondering why you aren't looking to sell?  Might be better off in the long run to have it off your hands.

Does anyone rent out units less-than-legally?

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