Looking at a flipped house for sale in Menlo Park, Ca. No additional/new structure just a general "gut & remodel" There are NO permits.

Asked by Fayettebelle, Menlo Park, CA Sun Feb 26, 2012

Realtor says its no problem. That it will be "grandfathered in". So we won't have problems if we pull permits when we want to build any additional structure.
Doesn't sound right to us. Is it a common practice?

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Michael Emery, , Minneapolis, MN
Sun Feb 26, 2012
BEST ANSWER
Personally, the only person(s) I would trust with the correct answer is the Menlo Park Building Division.

Give them a call in the morning and tell give them the scenario to determine whether or not they needed permits to do the work. And absent permits, what would be your liability should you buy the home. Speaking in general terms, if it's discovered that unpermitted work has been done to a home, often whomever owns the home at time of discovery is responsible for getting the home inspected and having the proper permits pulled. But it may be different in Menlo Park and the ONLY person I would trust to tell me would be someone from their department.

See link below for contact information for Menlo Park
2 votes
Steven Ornel…, Agent, Fremont, CA
Tue Mar 6, 2012
Fayettebelle:

First of all, don't panic.

Secondly, you probably SHOULD contact a RE Lawyer because from your postings it now sounds like you entered into a DUAL AGENCY with the Seller/Listing Agent, which in my opinion is a "Double Whammy"!

Your Buyer/Seller/Listing Agent is most likely quite familiar with the CAR Residential Purchase Contract - which functionally and reasonably leaves you without the capability of advantageous representation or guidance. I'm confident a RE Lawyer would be very interested in your "representation scenario".

[Note: A DRE licensee in CA can simultaneously act as a Buyer and Seller's Agent in a transaction - provided consent of both Buyer and Seller is documented. In fact, an undisclosed Dual-Agency is a felony in CA.]


Going back in time, had you secured your own Buyer's Agent at this point they might also be informing you to seek legal counsel in addition to making you aware of the following CAR Residential Purchase Contract sections; which you may be interested in reading if you have not done so already:

1) The Seller quote you provided is from Para 10(A)(v) of the CAR RPA. The first sentence preceding what was quoted refers to the Buyer satisfying matters contained in the Buyer's Inspection Advisory. I suspect you might be interested in reading what is listed in Para 12 of the Buyer's Inspection Advisory.

2) Contract contingency removals in the CAR RPA are not "passive" but instead require "active" removal. I would suggest you comprehensively read Para 14 A, B, & C (pay close attention to 14C3). Finally, study 14F regarding the release of deposit funds!

3) Note Para 26A & B provides for Mediation; and if no solution is arrived at, Binding arbitration; however, Para 26C(1) excludes these as a requirement if the amount sought is within small claims court jurisdiction.

Best Regards, Steve
1 vote
Steven Ornel…, Agent, Fremont, CA
Wed Feb 29, 2012
Fayettebelle:

Thanks for the update! Many of us often provide input but rarely hear of the final outcome. Congratulations on dodging a bullet!

Perhaps it's time for you to identify a professional Realtor®? If so, in regards to finding this your new Realtor® the following sites along with reviewing Trulia profiles/answers will give you good insight into the depth of knowledge and experience of each individual.

Fact: DRE licensees are NOT bound to a Code of Ethics; only Realtors® take that oath, which can be viewed here: http://docs.Steven-Anthony.com/RealtorCOE.pdf

You can check to make sure an Agent is a Realtor® by going here: http://www.realtor.org/rofindrealtor.nsf/pages/FS_FREALTOR?O…

You can check the status of a DRE Licensee and their Broker (and past violations) here: http://www2.dre.ca.gov/PublicASP/pplinfo.asp

You can check for Desist and Refrain Orders, and Unlicensed Activities here:
http://www.dre.ca.gov/cons_DandR.html#licensing


Finally, be aware and understand what you give up by entering into a dual-agency, which you can read about here:

http://www.trulia.com/voices/Home_Buying/Why_should_I_NOT_us…


I wish you the best of luck (and agency representation)!

-Steve
1 vote
Michael Kapr…, Agent, Burlingame, CA
Mon Feb 27, 2012
Well Fayettebelle,
Just like in the Oscar's there are Winner's and Looser's in this category. Just because they didn't pull permits does't mean that this home would be a bad buy! Just ask the right questions;
1. Was all the work done by a Licensed Contractor?
2. To me, the more important question is "WAS THE WORK DONE TO CODE" (get it in writing)
3. What other properties have you done (talk to the Owners)?
4. Was the "footprint" of the house ever changed, rooms added or removed?

In todays market, especially on the Peninsula flippers are very active. The properties that they sell are generally homes that have been purchased on the County Court-steps for cash and accept the property in it's "As Is" condition. Some of these flippers do pull permits and then again some don't but all should guarantee that their work is at least up to "CODE".

A good Inspector can give you a lot of information on the property but ultimately you need to be satisfied.

Always the Best,
Michael
1 vote
Steven Ornel…, Agent, Fremont, CA
Mon Feb 27, 2012
Fayettebelle:

I have to wholeheartedly agree with Michael, the only change I would make would be to go down in person. This is going to be a fairly significant investment of your time and money - I don't think you want to waste either!

-Steve
1 vote
Fayettebelle, Home Buyer, Menlo Park, CA
Mon Mar 5, 2012
Back again.

By going to the inspector's office to check on the permit issues and how much it would cost us to take care of the issues regarding such (and the subsequent stop work order they issued) we have been informed by the realtor (who is also the owner) that we have:

<i>Without Seller prior written consent, Buyer shall neither make not cause to be made: (I) Invasive destructive Buyer investigation: or (II) Inspection by any government building or zoning inspector or government employee, unless required by law.

The buyer has caused the seller damages.</i>

We're quite anxious now as we've also found that the seller's Title company has cashed the check of our ernest money.

Inspections have not even been completed (recent rain flooded underneath the house precluding final bits).

Are we going to need an attorney or is this usual behavior?

Thanks again.
0 votes
Fayettebelle, Home Buyer, Menlo Park, CA
Tue Feb 28, 2012
Um, not sure if I'm in the right place to add my follow up... but here it is.

We went in this morning and the immediate upshot was that the County Inspection Office issued a Stop Work notice on the seller/LLC.

They (Inspectors office) told us that if we were to go ahead with the house, we'd have at least $12K worth of cost/fines for lack of assorted permits. Plus we'd have $50K+ cost to address the immediate permit issues including the rules regarding remodels of 50% or more requiring a full retrofit to bring everything up to code. (The current code is that the garage needs to fit two cars side by side (18x19) plus sprinkler systems and more). And we will need to do the updates and provide plans within 10 days.

And the list goes on.

They also commented that they knew the realtor/seller/flipper and "that he really should've known better".

Then there's the issue that if we hadn't done our own research that we could have ended up in a bad situation. Our realtor mentioned none of these issues. (and they'd been flipping houses back in the boom days so I would think that they'd've known about all these issues already)

Caveat emptor, indeed.
0 votes
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