Rehabs and Mandatory Reinspection, Headed Your Way?

Many years ago a local politician ran for re-election on a platform of reinspections of all properties before their deeds could be transferred.  El Portal in Miami-Dade County had already passed this legislation.  Home values dropped dramatically overnight as homeowners tried to sell their homes with illegal carport conversions and unpermitted rehabs.  The official lost the election and, frankly, I was one of the lead opponents of his getting elected.

Home values did come back very slowly.  Other cities have joined the march of reinspecting homes before they can be sold.  While the cities call this a safety issue, it probably has a lot to do with badly needed revenue.  Whatever the case not all cities have adopted a reinspection policy.

In those cities where a reinspection is not required, more and more code enforcement officers have been taking it upon themselves to weed out rehabbers and homeowners who have done work on their homes without permits.  The process of finding these law breakers has been taken to a new level, and it has actually been made simpler for the code officers.

Whenever a property is listed on the MLS® an officer can look at the Realtor® comments.  The officer can quickly get an indication a rehab has been done.  It’s natural for the listing agent and the seller to brag about the upgrades and additions in the property.  The officer checks at his desk the records for permits and then heads out to the property to “write ‘em up!”.

For officers who don’t have MLS® access, it’s very simple to troll for Realtor® and FSBO signs.  They call the agent and ask for a showing.  The code officer cannot legally be kept out of the property.  He will get access one way or the other.  The “other” is with Police help so don’t be stupid about what rights you have or don’t have.

There is a bigger issue.  If you bought the property and it had “things” already done to it like enclosing the garage (carport) and converting it to a bedroom, remodeled bathrooms or kitchen, you are responsible if you get caught.  This is one instance of how you are responsible for the sins of the seller!  This excuse “I bought it this way” is typical of a seller who may or may not have done any unpermitted work on the property. It will fall on deaf ears (city officials).

One powerful technique to getting a discount on a property is to have the city send a code officer out to do an inspection.  Cities vary greatly in changes or property modifications where they require permitting.  Some cities require permits for drywall patching.  All cities require permits for any electrical work as this is a safety issue.

In summary, if you inherit a property, check if there are any open permits.  If you notice work that has been done, check to see if the work was permitted.  If the work has not been permitted, the seller should make an allowance for the problem that you are inheriting.  The seller will always say they bought it that way, but it doesn’t matter.  More importantly, remember that when you finish your rehab, keep in mind that you could have extended liability if your electrical work catches fire after you sell it to an end-buyer.

To your limitless success,

Dave Dinkel

Real Estate Mentor Program Founder