Bought a triplex but occupancy permit only for a duplex

[Mary Louise Wong]

Hi guys,

I just want to get input from some savvy investors that may have gone through this in the past.  I am new to real estate investing and recently purchased a triplex in Pittsburgh.  I had two vacancies at the time of purchase which was no biggie.  Just prior to the renovation, I had one of my contractors, who I also found in bigger pockets, point out that I actually bought a duplex according to the occupancy permit on the Pittsburgh website.  Now, I am stuck because I can't renovate the unit and rent it out until I bring it up to code.  The seller agent misrepresented the property because she listed it as a triplex.  I believe it is an error and omission claim and I am quite surprised that the property was able to close without no one finding out.  I am glad my contractor caught it and he told me it took him less than five minutes to pull it up on the county website.  The property is zoned as a three-unit on the tax assessor website which I check prior to the purchase, but I was told it was irrelevant if the occupancy permit only allows for two.  

How would you proceed if you ended up in my situation?  I just recently closed on the property and I now know to check the occupancy permit as well in the future.  My contractor gave me some solid advice and I am planning to take his recommendation, but I also want to learn from and consider the input from others on this forum.

Thanks,

Rich

[Nathan Gesner]

I don't know about your state, but my state operates on "caveat emptor" which means, "buyer beware." It is your responsibility to inspect a property and know what you are getting. I'm willing to bet your purchase contract states you are responsible for verifying all information and that the listing agent and buyer's agent are not experts or responsible. If the home is listed at 2,500 sq.ft. and you find out it's only 2,000 then that's your problem. 

Chalk it up to the cost of tuition. You can contact zoning and request approval for three units or you can convert it back to two units.

Always remember: just because someone has been doing something for X years doesn't mean they were doing it legally. Do your due diligence!