Have you come across rental license fees often?

Question

Where you pay the city to inspect units so you have the privilege of fixing them :p

Jerome Kaidor · Answer

I own an 8-plex in Hayward.  The rental inspection program became annoying in IIRC 2011.  The economy was in the dumps, nobody was building anything and I imagine that they had a bunch of inspectors sitting around twiddling their thumbs and wondering when the big layoff would happen.

So they came out looking for blood.  "Let's look at your water heaters"...."Got a permit for that one?".

A couple of Hayward idiosyncrasies: Until last year, they required metallic pipes and traps under all sinks.  Whereas the real world has moved on to ABS.  The other one is retrofit vinyl windows.  Most jurisdictions allow these to be installed without permit, as long as there's no structural changes.  Not Hayward!

So they found some 11 retrofit vinyl windows.  Nope, no permits on file.  So I had to dig through my paperwork and find the original contracts - over a period of several years - for those windows.  Luckily, most of them had been installed by Home Depot.  I went back to HD, and escalated it all the way back to Atlanta.  HD made good on it - they pulled the permits, their dime.   Two retrofits didn't meet modern egress code, and they replaced them.

I couldn't find contracts for two windows; I'm guessing they had been installed by the person who sold me the building.  So I went down and pulled permits for them myself.  Snag:  Hayward does not issue "Owner-builder" permits for commercial properties.  All permits for these properties MUST be pulled by licensed contractors.   I went down and begged, and they made an exception.

Aside from that one year, the inspection program hasn't been a big deal.

In 2009 a legal challenge was mounted to the inspection program.  I think my lawyer was involved.    Basically, the inspection program requires landlords to force the tenants to allow city inspectors to enter their apartments.  But California law limits the reasons for landlord entry.  "Inspection by a local government" is not one of those reasons.

---------------------- snip -------------------------

In its final ruling the Court of Appeals found that:

• The City needs the tenant’s consent to inspect the rental unit.   Without the tenant’s consent the City must obtain an inspection  warrant.
• California Civil Code §1954 does not apply to the Hayward  ordinance because the ordinance affects only the conduct of the City and  not that of the landlords.
• A landlord is required to make only a “good faith” effort to obtain a tenant’s consent to facilitate a City inspection.
• A landlord cannot be held liable for a tenant’s failure to consent to an inspection of the unit.

---------------------- endsnip --------------------

Really, the inspection program hasn't been THAT big a deal.  Rent control and Just Cause Eviction are a much bigger deal.

Joseph ODonovan · Answer

Yes, I pay rental license fees in every town I have properties. It's basically a back door tax. They do it because they can.

Steve Babiak · Answer

I am in the Philadelphia area, and I get to pay for rental licenses and inspections too.

I have learned to try to cooperate with the inspector's requests, so long as they are reasonable. The most recent unreasonable request was to replace a sidewalk that had passed inspection just a few years prior - newly hired inspector has to show he can flex his muscle I guess. Brought in a number of concrete contractors and they all asked were they at the correct address, because the sidewalk they were looking at (my property) did not look bad at all, but the one next door (owner occupied) was in terrible shape. Yes, landlords have to "conform", but owner occupants get away with having unacceptable conditions. I ended up replacing that sidewalk anyway due to municipality's threat of legal action; you lose in court and have court costs on top of the cost of the concrete work.

This sort of thing is one of those real world expenses that the usual analysis tools fail to account for.

John Barnette · Answer

Yes basic fees for just owning a rental property. Even non owner occupied SFR. Apartment license fees.  Then fees for various city inspections.  Life in California.

Kyle J. · Answer

Yes. It’s becoming more and more common. In some cities, you can actually “self certify” that it meets the standard. Still have to pay a fee though. It’s just another way for cities to make money.

Have you come across rental license fees often?

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