Hanging my butt out there

[sd_matt]

Possible cover my ass situation
I am contigent on a single family that has a studio attached to the garage. The “studio” has neither a separate meter nor a range. The property is zoned as sfr.
I intend to live in the studio until I purchase the next property and continue renting the house to the present occupants.
Now I just got off the phone with a friend who went through a lot of bad stuff after doing what I intend to do. Aparently its not legal….or is it?
Is there any way to cover my butt here? Any way to write the lease?

[SD Realtor]

Depends on how your loan application is structured. If you have not disclosed to the lender that the majority of the property is being used as a rental then yes it can be considered mortgage fraud, especially because of the description of the studio.

[UCGal]

It sounds like it’s not zoned as a secondary unit. Usually the enforcement in this situation is to remove the range (already done) and possibly make you remove any shower/tub. Friends were renting a house in north park and another friend was renting the converted garage… the previous tenants were law students who stopped paying rent and called in the violation just to be punks (per my friend). The $&&$ hit the fan while their friend was in the unpermitted conversion.

When we built our companion unit, turning our SFR into a multifamily, getting the gas meter was the very last thing done… happening only after occupancy had been given by the city of San Diego. That’s why you don’t have the meter.

Theoretically, you might be able to legally convert it to a multifamily if you meet the kafka-esque requirements (assuming you are city of San Diego)

[SK in CV]

[quote=UCGal]It sounds like it’s not zoned as a secondary unit. Usually the enforcement in this situation is to remove the range (already done) and possibly make you remove any shower/tub. Friends were renting a house in north park and another friend was renting the converted garage… the previous tenants were law students who stopped paying rent and called in the violation just to be punks (per my friend). The $&&$ hit the fan while their friend was in the unpermitted conversion.

When we built our companion unit, turning our SFR into a multifamily, getting the gas meter was the very last thing done… happening only after occupancy had been given by the city of San Diego. That’s why you don’t have the meter.

Theoretically, you might be able to legally convert it to a multifamily if you meet the kafka-esque requirements (assuming you are city of San Diego)[/quote]

I’m curious why you jumped to the conclusion that it’s not zoned as a secondary unit? There are certainly parts of the county where there are fully permitted additional units, no?

[UCGal]

I jumped to the conclusion because of the lack of gas meter and the lack of cooking range. Based on my experience and what I observed with a friend’s rental.

But you’re right – the rules are different for different jurisdictions. I’m very familiar with San Diego’s rules for accessory buildings, but a lot less familiar with other places… other than some of the ways they differ from SD.

We were surprised that we couldn’t get the gas meter till the city issued occupancy. But that is apparently done to prevent folks from occupying early.

[NotCranky]

If it is not a legal dwelling, I would live in the master bedroom, making an access to the yard/”studio” if necessary. Use the studio for your extra space or office etc. Rent out all the rooms including converting any living room to a bedroom. Put in coin operated laundry.

There is still the risk that the studio square footage is not permitted and that you get ordered to tear it down. If that is not an acceptable risk then you had better make sure about all of that.

[SK in CV]

[quote=UCGal]I jumped to the conclusion because of the lack of gas meter and the lack of cooking range. Based on my experience and what I observed with a friend’s rental.

But you’re right – the rules are different for different jurisdictions. I’m very familiar with San Diego’s rules for accessory buildings, but a lot less familiar with other places… other than some of the ways they differ from SD.

We were surprised that we couldn’t get the gas meter till the city issued occupancy. But that is apparently done to prevent folks from occupying early.[/quote]

I had a granny flat in poway. Basically a 1200 sq ft 2 bedroom house in the back yard. No separate meter, with an electric range/hood and a full bath. The permitting was a little touchy, it was apparently built while Poway was assuming full responsibilty from the county, so some of it was grandfathered, without inspections and without full specs in the records. No separate meters. But it was all legal.

So I think you’re right, there may be big differences based on jurisdiction.

[sd_matt]

Loan is FHA. So owner occupied..of course.
What if I move in (back “unit”) and have the current tenants sign room rental agreements? Assuming they will go for it. It is a family. I put utilities and cable/internet in my name. Would it fly in court?
Property is sfr and zoned as such.

I suppose I could rent rooms to college kids but prefer the family staying. Much simpler but, oh my, a serious cover my ass situation.

[NotCranky]

[quote=sd_matt]Loan is FHA. So owner occupied..of course.
What if I move in (back “unit”) and have the current tenants sign room rental agreements? Assuming they will go for it. It is a family. I put utilities and cable/internet in my name. Would it fly in court?
Property is sfr and zoned as such.

I suppose I could rent rooms to college kids but prefer the family staying. Much simpler but, oh my, a serious cover my ass situation.[/quote]

In the situation you are describing, it’s not necessarily simpler in the long run to rent to one family. If you have to do an eviction especially.

Instincts go against that. I want control of the place where I live. I would not want to live in my renter’s backyard when they live in the main house…and a lot of prospective good renters don’t want that either.Flakes will want it. With roommates you can kick one out at a time and never have much of a vacancy or squatter problem. If one leaves, you are only missing a small percentage of rent. I had roommates for the 10 years of my single life in which I was a homeowner. When I said go, they went w/o much fuss, no changing of electricity phones or anything.

I had pretty decent relationships with all of them. I only rented to a couple of college students(quiet types). If you want to drop the tenant load for a while it’s easy. If you want to let a friend house sit for you nobody can say a thing. It’s not for everybody, of course.

A problem with my scenario is that it might be harder for an underwriter to accept a history or rental income, compared to having a contract with one household. I never was able to use rental income from roommates as income.

[moneymaker]

Do you have room to park an RV? That would be fully self-contained and “temporary”. Use the granny flat for storage, just a thought. In lakeside it would not be a problem, I guess it would depend on who your neighbors are.

[sdduuuude]

From a legal perspective, why can’t you just call the renters your “roomates” ?

I don’t see the difference, really, between you living in the master bedroom or you living in the extra studio.

And you have an under-the-table, inside agreement that you will stick to the studio and they will stick to the main part of the house and share the yard. It could be awkward or convenient depending on the personalities, but they are just roomates.

Then, you can call it your primary residence but you rent a room to some people.

You’ll have to share mail, utilities, etc. just like roomates do.

[UCGal]

[quote=sdduuuude]From a legal perspective, why can’t you just call the renters your “roomates” ?

I don’t see the difference, really, between you living in the master bedroom or you living in the extra studio.

And you have an under-the-table, inside agreement that you will stick to the studio and they will stick to the main part of the house and share the yard. It could be awkward or convenient depending on the personalities, but they are just roomates.

Then, you can call it your primary residence but you rent a room to some people.

You’ll have to share mail, utilities, etc. just like roomates do.[/quote]
This seems logical.
The mail thing is definitely something to consider. If there’s no separate postal address for the secondary unit, you’d have to share mail.

[sd_matt]

I talked to my friend that got out of court. Turns out that the room addition he was living in is not permitted. So I need to verify the permits. The other bit of advice from my realtor is to put all utilities in my name.
The other thing is not to rent to legal students should I go that route.
One poster said its not preferable to live close to tenants. I dont think its all bad in that I could keep an eye on them and would not have to travel for maintanence.

[Author]

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