Dealing with city's permitting

[Sam Leon]

I have recently purchased a duplex REO property which has a number of violations with city liens. I am in the process of clearing the violations and running into some issues in trying to be the "owner/builder" of the work to be performed.

Basically I can hire a licensed contractor or be an owner/builder and hire my own subs.

There are some conditions in the city's document which qualifies someone as "owner/builder".  The specific languages in question is:

"I understand I may build or improve a one-family or two-family residence or a farm outbuilding.  I may also build or improve a commercial building if the costs do not exceed $75,000.  The building or residence must be for my own use or occupancy.  It may not be built or substantially improved for sale or lease.  If a building or residence that I have built or substantially improved it is sold or leased within 1 year after the construction is complete, the law will presume that I built or substantially improved it for sale or lease, which violates the exemption."

There are other conditions but those I clearly qualify.

Now here is the situation.

(1) I am not substantially improving anything.  In fact, I am demolishing, disconnecting, removing illegal unpermitted gazebos, driveways, fences, and electrical and plumbing associated with those.  There is nothing in what I am doing which can result in improving the value of the property to command a higher rent or sale price.

(2) It's a duplex, so I assume (may be incorrectly) the "own use" or "occupancy" applies to only one unit.  In other words, it should be fine as an owner/builder if I use one unit and lease the other?

(3) "must be for my own use or occupancy".  There is nothing in this language that says I have to live there, right?  Yet, the city's front desk clerk told me I have to live there; and another clerk said "no...I believe they have to file homestead exemption on it".   Here I think they are using liberal interpretation of the language here.  If one looks at the language it says "own use".  There is no require to live there or file homestead or it being primary residence.

Seems to me the only requirement is I could lease or sell it within a year, and the only question should be if that's both units or just one.

I am thinking of going over their heads and calling up the chief building official and ask for clarification.  However I am also mindful that this may piss them off and I may invite more trouble with inspectors and paper work down the road.

Any advice would be greatly appreciated.

[John Blackman]

Just be glad that your rules are consistent. We deal with the City of Austin constantly and the rules change from day to day.  It's completely random and what may have been standard process one day is not the next and then it goes back to the old process again.  Depending on the personality of the person reviewing your file also determines whether or not your plans will qualify or need to go to City committee (read your project will be on hold for 6+ months if this happens).

It's just part of the business, and I look on the bright side that it keeps competition out, but it is extremely destabilizing. Keeping on their good side is extremely important.  If you plan to ever be in that office again, they can make your life hell if you have scorned them.  I would advise to grin and bear it.

Just work in the costs of using licensed contractors into your financial models.