Purchased residential property from Band of America that was not permitted.... no city is coming after me after 3 years... What do I do??

Asked by MKF768, Bend, OR Tue Sep 11, 2012

I purchased my home in Bend Oregon in 2009 as a foreclosure from The Bank of America. My home has two units- one three bedroom and one 2 bedroom. I rent out the three bedroom and occupy the two bedroom myself and have done so since i purchased the property- The unit I occupy is fully equipped to serve as a residential property ie. (full kitchen, living area, bathroom, laundry room and garage).
The property was sold under the pretense that it was a residential 5 bedroom home. My home loan specifies that it was for a residential property.
Recently I was confronted from a City of Bend Code Officer who informed me that if i did not let him inspect my unit it would be condemned. Aside from a couple miscellaneous changes i would need to make for code purposes, i received a letter on Sept 4th that the portion of the property that i occupy was never permitted for residential purposes and that if i did not pay $10,000 in fee's i would need to vacate within 30 days. What r my rights???

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11
Molly Brunda…, Agent, Bend, OR
Tue Sep 11, 2012
Another thought... did you use a buyer's agent when you purchased the property? If so, you might want to contact them. I am always available to help past clients, and I hope other agents feel the same way. They might be willing to help you with this process and can possibly pull the property history to see how it was marketed and represented to you when you purchased it.
1 vote
David Holland, Agent, Bend, OR
Tue Sep 11, 2012
Please forgive my need to ask a few more questions before I can direct you further. Was this house remodeled? Or is the home in original condition when completed and given the final occupancy permit from the City of Bend? Why did the Code Officer come to you now? Is the house one unit or a house with a detached ADU? If the Code Officer condemns your unit wouldn't this effect the entire house? Why is the code officer asking for $10,000? Did he or she give you a breakdown for these fee's? SDC's, hook ups - what are they specifically? You might want to go down to City Hall and ask for Aaron Henson - senior planner and he might be able to help you with your current situation.

For rights - a good real estate attorney can be an effective advocate. Kyle Schmid at Schmid Malone. Tamara McLeod at Karnopp Peterson or Chris Ambrose at Ambrose Law - all specialize in real estate and all are local.

Hope this helps.

David Holland
Principal Broker
Cacsade Sotheby's
hollandpg@gmail.com
541-306-1649
1 vote
Here are the Real Estate Attorneys:
Chris Ambrose - 541-330-0588
Ambrose Law
crambrose@ambroselaw.com

Tamara E. MacLeod - 541.382.3011
Karnopp Peterson Law
tem@karnopp.com

Kyle Schmid - 541 388 1107
Schmid Malone Law
kyle@schmidmalone.com
Flag Tue Sep 11, 2012
Thanks for the details. I would connect with Aaron Henson (senior planner -City of Bend). Aaron Henson -Senior Planner (541) 383-4885
ahenson@ci.bend.or.us
As per 1st suggestion - I would also counsel with a real estate attorney as soon as possible. The navigation they can provide could be greatly beneficial and hopefully alleviate some of the time and stress associated in reaching a solution. As to cost analysis - I would disclose up front to the attorney what you can budget towards legal services. You might also want to investigate with the City of Bend if they have a low interest loan (like County LID projects offer) over a period of time that you could access to alleviate an immediate financial hardship if you ultimately find you need to move forward with the requested permits. Last - have your attorney look into your Title Insurance policy that was issued on your property at the point of purchase. Again - hopefully something I provided can help you with this unforeseen challenge
Flag Tue Sep 11, 2012
I appreciate your help. Here is some more information...
The house is still in the original condition as it was when I purchased it, to my knowledge the final occupancy permit was never given because it was not paid for. Is says in my loan that it was used for a mother in laws dwelling at the time of purchase. They have come to me now because I build a small deck and the neighbor (who is a renter) did not like it... so she called this city and this is what came up. There is a detached ADU, as mentioned one is a three bedroom and the one that I occupy is a two bedroom- also the one that was not properly permitted before sold as a residential dwelling. The 3 bedroom is properly permitted. My unit is the only one threatened to be condemned. The $10,000 is the total including various fees including electrical, plumbing and various inspections. I will get the breakdown tomorrow. Again, thank you so much for your help!!! I Appreciate it.
Flag Tue Sep 11, 2012
John Stone, Agent, Bend, OR
Fri Nov 1, 2013
I suggest that you contact a lawyer and discuss this matter. If you do not have a lawyer, call the Oregon State Bar Lawyer Referral Service at 800-452-7636.

Also, see http://www.osbar.org/public/ris/.
0 votes
Rod Mischel, , 97701
Fri Nov 1, 2013
I believe most of the replies are very good. For my part, I think this is a good example of doing due diligence when buying any foreclosure. Banks exempt themselves for property disclosures because they never occupied the property. Like everyone else on this site, I cannot give legal advice so I would consult an attorney to see if someone in your transaction may have withheld any known permitting issues.
0 votes
John Stone, Agent, Bend, OR
Fri Sep 13, 2013
I suggest that you consult an attorney, as real estate agents cannot give legal advice. There are qualified real estate attorneys in Bend.
If you do not have an attorney, call the Oregon State Bar at (800) 452-8260 and ask for the Oregon State Bar Lawyer Referral Service,
0 votes
Michael Ford, Agent,
Fri Sep 13, 2013
$10k to have a permit issued making the place legal sounds like a good deal to me. it is by far the path of least resistance and will close the file and have them happy.

you can blow through five grand here in a new york minute and still end up having to grease them at the $10k level.

i suggest another tack...get yourself a well regarded building contractor and schedule a sit-down with the dept. head and find a negotiated solution. if you send in a lawyer they lose some of their wiggle room and ability to overlook some likely requirements. they have a lot of leeway if you approach this correctly.
0 votes
Frank with R…, Agent, Redmond, OR
Fri Sep 14, 2012
Ask the city of Bend, Specific to the department and an accounting, of the fees. Find out what are being accused of then contact a real estate attorney, there are several in Bend.
0 votes
David Holland, Agent, Bend, OR
Tue Sep 11, 2012
Cheri is right on the mark with that observation.
0 votes
Ladd Group, Agent, Bend, OR
Tue Sep 11, 2012
I would suggest reviewing this with a real estate attorney. The first stop would be reviewing the zoning in the area with an official at the planning department to see if you uses are allowed and if your property was permitted correctly.
Foreclosures are scary stuff as people buy with limited due diligence in a rush. I would encourage all buyers to work with an attorney or a real estate agent that specializes in distressed purchases. Good luck and I would suggest meeting with the city officials. They are generally great to work with and are there for you, the taxpayer.
0 votes
Molly Brunda…, Agent, Bend, OR
Tue Sep 11, 2012
Sounds to me like you need a real estate attorney. I can recommend a couple if you don't already have someone you trust.
0 votes
Dave had great suggestions. Another you might consider is Alison Huycke @ Francis Hansen & Martin. Alison@francishansen.com or phone # (541) 389-5010. Her fees are pretty reasonable when she helps homeowners with short sale issues (often half what other attorneys charge) but I'm not sure what her rate is for other real estate issues.
Flag Tue Sep 11, 2012
Thank you so much- Do you have an affordable recommendation?
Flag Tue Sep 11, 2012
John Stone, Agent, Bend, OR
Tue Sep 11, 2012
This is a legal question about which you should consult with an Oregon lawyer. If you do not have a lawyer,I suggest that you contact the Oregon State Bar Lawyer Referral Service. See http://www.osbar.org/public/ris/lrsform.html.

This service will give you the name(s) of local attorneys who can counsel you on this matter.
0 votes
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