Illegal 4th Unit

Illegal 4th Unit

Investor · Fargo, ND · Member since 2015 · 84 posts · 11 votes

Hello BP conmunity. Im currently in the process of acquiring a 4 plex that has some shady history, especially when it comes to the basement unit, which apparently had a water line break somewhere and is currently out of commission.  And being that it's out of commission, it's cheap and I can increase my equity really quick by bringing it back to habitable.  I've overstayed my inspection contingency already, but I've had several red flags come up over the last week that just have drawn the process out.  There is not a whole lot of information on the basement unit with the city, and I have spent a lot of time at the city's building inspection office trying to get answers about code issues, specifically ceiling height, which is going to be cutting hairs whether or not it meets requirements.  In all the rush of code issues and what not, I completely overlooked zoning.  According to the zoning law, the lot can only hold 3.4 units on the amount of land present.  The property cash flows with just the three units, but not enough for me to be interested.  There is the possibility of getting the lot rezoned, but it's a crap shoot and I'd have to own the property to petition a rezoning.  After looking over the land development code, I can't find anything different between the requirements of MR-2, which it is currently zoned as, and MR-3, which is what I would be petitioning for.  Has anybody had any luck petitioning for a rezoning?  I love the property, but I would be forever disgusted if I purchased it and then couldn't redo the 4th unit.  Any insight or suggestions would be greatly appreciated!

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  • Urbana, IL · Member since 2012 · 1k+ posts · 425 votes
    10y

    Keep in mind Fargo landlords are often playing stupid 'not realizing' they have more tenants than allowable in the city and I think your situation is similar. Was this property listed as a 4 plex or 3 plex with the Realtor? I'm guessing 4 plex because Realtors miss information like this a lot of the time and/or don't care because they get a better buyers base advertising a 4 plex instead of a 3 plex.

    I'm no lawyer and not advocating what to do, but I've heard of landlords just fixing up a unit like yours and advertising and renting it out. Its only when you get caught that you get in trouble. Speaking of which, what is the penalty for getting caught? Maybe its cheaper than getting a rezoning.

  • Investor · Fargo, ND · Member since 2015 · 84 posts · 11 votes
    10y

    It was listed as a 4 plex with the 4th unit being out of commission. Unfortunately with the other issues im finding Ive been trying to clear up the red flags and Ive already opened the unit density issue with the planning and zoning office. In hind sight, I probably would have been better off just keeping my mouth shut.

  • Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    10y

    Could you expand one unit into the out commission unit? Could you turn in into some type of community space (laundry?) or rentable storage unit area?

  • Investor · Fargo, ND · Member since 2015 · 84 posts · 11 votes
    10y

    Good ideas. I like the idea of expanding one unit, but the only one it would work for is already the largest by a long shot and I don't think I could increase the rent enough to justify it. 

  • Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
    10y

    @Dustin Smith  Bummer!  How big is it the upper level rental.  How big is the basement rental?

  • Investor · Fargo, ND · Member since 2015 · 84 posts · 11 votes
    10y

    @Jim Adrian.  The upper units are about 350 sq ft each, the main floor is about 600 and the basement is about 700.  But in an unbelievable turn of events, the city planning and zoning office called me and basically said there was enough evidence of the 4th unit on the books that they will allow an exception! Holy smokes!

  • North Miami Beach, FL · Member since 2015 · 5 posts · 0 votes
    9y

    Hello!   A Duplex (3 bedrooms on each side)  The Master bedrooms on each side have their own private entrance in addition to the main door entrance.   Is it legal to have a tenant stay in that Master bedroom renting separately and come and go through that additional exterior door as long as the bedroom door isnt locked on the other side going into the rest of the place?

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