Legally a DUPLEX, actually a TRIPLEX

[Tony Hoffer]

Hi BP folks..

I've been noticing in Cleveland quite a few Triplexes for sale but are on public record as being a *Duplex*.  It seems the city has looked the other way on many of these for years.

My questions are:

- Has anyone ever had to deal with the city on this issue during annual inspections, POS inspections, etc?

- Can they cite the owner and make them use the property only as a Duplex instead of a Triplex?

- Is it possible and worthwhile to legally make the Duplex a Triplex?

- Has anyone had an issue with banks or insurance as far as the public record stating one thing and the actual use another?

- Is this something to be concerned about or not?

Thanks!

[Chris Mason]

In California, people don't want to disclose significant home upgrades because it could trigger a Prop 13 property tax reassessment. 

So, we get things like this. 

@Tony Hoffer

Ah, this old trick. Very common up here in the Bay Area, actually. If you can't cook food in it, it's not a "unit." So you take an oven out and POOF it's a duplex. It was inspected as a duplex, and I'd bet it'll be appraised as a duplex as well (basically removing the oven gives the appraiser plausible deniability), which could create value issues and impact your DTI if you need to use rental income to qualify.

So you have a few choices.

• Back out.
• Buy it as a duplex, put an oven back in to make it an illegal triplex again and leave it illegal. Then you play this exact same game when you go to sell it, wee!
• Buy it as a duplex, do all the permits, etc, necessary for it to legally be a 3-unit. When/if you go to sell it, you won't have anything to hide, meaning it can be appraised as a 3-unit, possibly commanding a higher price. 
• Buy it as a duplex, keep things legal, and pick one of the two units to rent it out as part of. Market the unit as having a kitchen + wet bar (eg, selling the not-a-kitchen in the not-a-unit as a feature) and being some sort of "luxury penthouse apartment" or something.