Old detached storage room declared un-permitted, help!

[John Hsu]

Hi All,

Would really appreciate BP community's help here.

We have an investment property in San Jose, CA.  The house has a detached garage with a side storage room about 180 sqft.   All record indicated that the detached structure has been around for at least 70 years.  

Recently we got a letter from the City Code Enforcement saying that the storage room is not permitted.  

It's completely a surprise to us.  When we purchased the property and did the interior remodel, we applied the permit and on the site plan, we showed the detached garage and detached room.  The city reviewed it and didn't say a word about it.   Shortly after we started leasing, Code Enforcement came and said we had a person living in that room.  We relocated the person and showed the room empty and cleared the code case.  Afterward, we leased out the space as a storage room to a tenant who rents one room in the main house.  Unfortunately, the tenant has someone staying in the storage space and now we have a code case again.  But this time the city declared it un-permitted and the tenant is seeking relocation benefit.  

My question is, is there a way to appeal the city's finding here?  Is there a precedent or cases you guys have experiences with?  As the property owner, what are we supposed to do to really know whether things like this is permitted?  The structure is old and the city permits records are poor.  There is a permit for garage but didn't have a map or size.  Throughout the years,  there were many permitted remodels, and there was the earlier code case.  The city has ample opportunities to let the owner know the back structure is not permitted but ignored to do so.  I think it is truly unfair to the owner.  

Any idea on how we can fight the city on this?   Really appreciate your input.  

John