Expert: Dick Dennis - 8/3/2006

Question
I bought my historic (1921) home 1 year ago,  It was listed and shown as Main House with a guest house.  The guest house was the old detached Garage converted.  It is a studio, with Kitchen and Bathroom, with back yard entrance for car parking under Gazeebo.  The main house had lighting improvements, bathroom improvements, including taking out a bedroom closet to make a wall in shower.  I went to the city to research permits,and found out NOTHING was permitted.  And the city of Anaheim will not allow a guest house, since it is zone R1 and even re-zoning if I wanted to buid a seperate 2 car garage, probably wouldn't get approved due to over crowded street parking.  Main Home inprovement inspection could be destructive.  I was counting on renting that quest house to help with the mortgage payments, approx. $1000.00 a month.  I've contacting the Title Insurance Company, but I feel like I bought a house and guest house, and it not possible to make this property be what I was told it was.  Keeping the property without the guest house won't be financial possible for me.  Selling the house now would come as a great loss of value and be difficult to sell with so much non-permitted work.  Please advise what your thoughts are?  Is it possible to force the buyers to take back the house and give me my money back, plus other cost, like the prepayment penalty I will have to pay?

In disclosures, Is a question - Are any improvements made without permits? - they marked NO.  Should this have been caught by the inspector, or appraiser, or real estate agent?

Whats your hard-copy newsletter?  

Answer
The key to your question, Brenda, is the disclosures. If I were you I would contact the Realtor(s) involved and tell them what you have found out from the planning dept. And you expect to be recompensed for everthing.

They are not going to give you a reply for at least a couple of weeks. Then that is when you contact a good local real estate attorney to handle the matter for you. Everybody you mentioned are going to be contacted by the attorney until he finds the one with the deepest pockets.

There is one thing though, Brenda. Your property may not need permits! Why? Because everything that is there now may be "grandfathered." When you decide to add-to, remodel or replace, then that is when the city says you have to be permitted properly on everything!. So, you may want to investigate with the city. So, that means you may indeed be able to rent out that "extra house" as long as you do not modernize it in any way. Check it out.

But if you really don't want the property, then go the attorney route and get them to reverse that purchase, plus your attorney costs.

I do wish you well.

Dick Dennis             dixiedee13@aol.com

www.OldProblemSolver.com