Although the City acknowledges that there are over forty thousand "ancillary units" (the latest term being used in Planning circles) the fact of the law remains that you were charging money for a space that didnâ€™t have a certificate of occupancy and is likely not in an area that is zoned for multiple family residences. In other words you have been breaking the law for at least twelve years.
The best case scenario is the building inspector looks at the property and finds that you meet the main tests of habitability but because of the zoning you have to remove (abate) the unit. If the zoning allows multi-family homes then you might be able to bring it up to code and continue to rent it. Then you are just dealing with this nasty landlord/tenant relationship.
Good luck to you. I know Iâ€™m going to add this to my list of cautionary tales for buyerâ€™s who think buying a place with an ancillary unit in it is a good idea. By the way you are not alone in having this happen after a good long run of getting away with it.
Beckman Blair LLP
703 Market Street, Suite 1610
San Francisco, CA 94103
tel. 415-495-8500x11; fax. 415-495-8590
Manzar D. Azari, MBA, Broker, Realtor
The Azari Group Real Estate, Inc.
No one knows the potential consequences and costs right now because each situation is different and, unfortunately, even similiar cases have different outcomes.
A lot depends on how vindictive your tenant is....
San Francisco has a lot of illegal untis and the City knows this.
Usually, most tenants are happy with illegal in laws and pay rent on time and stay without any complaints.
Some tenants, for one reason or another, report that their unit is illegal for vindictive reasons or for habitability issues.
It is up to the landlord to take this risk and rent illegal units.
I personally advise against renting illegal units.
Peter T. Chin Realtor #01866332
Lance King/Owner-Managing Broker
Good luck with this.
Pacific Union International'