CC&Rs Still Valid?

Started by MarkT7 • 16 replies • 1971 views

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MarkT7 (California)
Posts: 1

Posted:

The responses to "No HOA, ONLY CC&Rs" were an excellent source of info for my situation and answer most of my questions. But I do have some residual questions

I am in escrow to buy a house in Big Bear Lake, CA, a mountain resort town that I plan to turn into a vacation rental property.
As part of my inspection I stumbled across old (1982) CC&Rs affecting this property. Similarly there is no Association. In fact, many of the provisions appear to have been violated in the tract to which this applies. For example, CC&Rs state no 3 story houses, and yet there are many. The one I am interested in has a large 3rd floor attic I wanted to make into a rec room.

It is clear now that those restrictions still apply however, and any homeowner can choose to file suit.
But, could/would a judge really order a property owner to remove a third floor years after city approved construction has been completed?

Another big question I have is would renting this house as a Vacation Rental violate: "No trade, business, or industry shall be carried on upon any lot within Tract..."?

Any advice is very much appreciated.

Thanks,
Mark.

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CraigC6 (Michigan)
Posts: 6

Posted:

mark as an accountant i can tell you that the irs does not consider rental income trade or business income

hope it helps

JohnB26 (South Carolina)
Posts: 1,569

Posted:

It is clear now that those restrictions still apply however, and any homeowner can choose to file suit.
But, could/would a judge really order a property owner to remove a third floor years after city approved construction has been completed?

Yes Yes Yes .... county or city code approval HAS NO BEARING on a CCR violation

Why on earth would you want to purchase a property which you KNOW IS IN VIOLATION of registered deed restrictions?

If there were an HOA you might have a 'laches' defense, HOWEVER with no HOA RUN RUN RUN

IMO: any further action on your part is masochistic in nature

JohnB26 (South Carolina)
Posts: 1,569

Posted:

read and then reread #12 of your CCRs

BradP (Kansas)
Posts: 2,640

Posted:

Mark

interesting dilemna...easy answer is hit the road and don't look back. However, in your case if there are several third story homes and they have existed for a long period of time I would envision your legal standing is fairly solid. On the other hand, as one poster said buying a home with a known violation is gambling. Since the CC&R's were established in 1982 what does it say about their expiration? For example, mine run for 35 years and then at that time the owners can opt out. Others have easier opt outs. Might be worth exploring.

SusanW1 (Michigan)
Posts: 5,202

Posted:

Mark - are you paying any dues?

That entity - whether it is an HOA or not - should have the latest CCRs and bylaws.

For all you know, the CCRs may have been re-written since they expired.

Do some more investigation. Your realtor should have all the latest. Shame on him/her if they don't

LarryB13 (Arizona)
Posts: 4,099

Posted:

From what you posted the house sounds like it was built as a 2-story home with an tall attic. If you were to convert the attic to a rec room the only way your neighbors would know was if they invaded your privacy.

When was your house built?

Per paragraph 7, if the house was built before August 1, 1992 then it is in compliance with the CC&R's as prior to that date construction plans had to be submitted to the declarant's ACC. If the ACC approved then it complied. If the ACC disapproved or if no approval was sought, the ACC had 30 days to stop construction. If the ACC failed to stop construction then it was deemed approved.

Houses constructed after August 1, 1992 did not need approval as the ACC died on that date but still had to comply with the CC&R's.

In the unlikely event that another property owner was willing to spend his time and money to enforce the CC&R's against you, the doctrine of laches would most likely apply. That doctrine holds that relief can be denied if the plaintiff knew he had a claim, unreasonably delayed asserting his claim, and his delay aggravated the damages. In the case of your house, anyone claiming a violation will have to explain why he did not seek an injunction as soon as he realized that the house was in violation.

If I were in your shoes I would move forward with the plan to buy the house, turn the attic into a rec room, and rent it out.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

[qoute]From what you posted the house sounds like it was built as a 2-story home with an tall attic. If you were to convert the attic to a rec room the only way your neighbors would know was if they invaded your privacy.

Nope ..... the REQUIRED building permit is a matter of public record.

If no permit was 'pulled' then you may be required (by the AHJ to 'tear it down' and rebuild it)

ps. if you don't know that AHJ = authority having jurisdiction then you really should be building anything

in the case of a property with CCRs there are SEVERAL AHJs with varing degrees of 'control' .... usualy the CCR's ban will trump the 'town's' approval

GOD BLESS THE REPUBLIC

JohnB26 (South Carolina)
Posts: 1,569

Posted:

rant over

LarryB13 (Arizona)
Posts: 4,099

Posted:

I never apply for a building permit for an interior remodel. There's already enough hassle in getting the job done that I find little reason to pay more money so I can delay the job waiting for endless rounds of inspections.

BTW, it was my assumption that the OP did not intend to make an exterior mods when he finished off the attic.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

when the prospective buyer does the title search and checks for permits .... what then .... a structure w/o a valid certificate of occupancy is NOT MARKETABLE unless the seller knowingly falsifies the 'disclosure form'

when an insurance co. denies the claim because of un-approved/un-permitted renovations ... what then

evidently you are
1 - a structural engineer
2 - ?plumber?
3 - electrician
4 - hvac mechainic
5 - framing carpenter
6 - finish carpenter
7 - taper
8 - painter
(not to mention insulation applier, which may be done by the carpenter)
ps. i hope the proper vapor barrier was installed .... won't know 'til the mold finally grows through the 'rock

i would like to see your work work

you have merely been lucky so far

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By JohnB26 on 11/23/2011 2:30 PM
when the prospective buyer does the title search and checks for permits .... what then .... a structure w/o a valid certificate of occupancy is NOT MARKETABLE unless the seller knowingly falsifies the 'disclosure form'

I have yet to see a buyer, title company, or lender go through building permits and then physically inspect the property to see whether the actual construction matches the building permits.

Quote:

when an insurance co. denies the claim because of un-approved/un-permitted renovations ... what then

The insurance company has the opportunity to inspect the home and compare the actual structure to the building permits prior to issuing a policy. I have yet to see one do this. If the remodel was an issue my response would be that it was like that when I bought the house and let them prove otherwise.

Quote:

evidently you are
1 - a structural engineer
2 - ?plumber?
3 - electrician
4 - hvac mechainic
5 - framing carpenter
6 - finish carpenter
7 - taper
8 - painter
(not to mention insulation applier, which may be done by the carpenter)
ps. i hope the proper vapor barrier was installed .... won't know 'til the mold finally grows through the 'rock

i would like to see your work work

you have merely been lucky so far

I learned long ago that licensed contractors are not likely to perform quality work. If they were good at their trades we would not need building inspectors. Contractors often get their work by being the low bidder. Their costs are pretty much the same as every other contractor's so the only way to make a living is to cut costs by giving the buyer less than the best. I find this mentality so ingrained in contractors' collective psyche that most are unable to do a good job no matter how much money you throw at them.

With the exception of the structural engineer, none of the trades you listed requires much education. It's more a matter of having the tools, the experience, and the physical stamina to get the job done.

The job the OP described was to convert an exsting unfinished attic space to a rec room. Unless there is more to the job than stated, this is the kind of work that any experienced homeowner should be able to handle.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

elctric _ adequate receptacles, new breaker at panel, lighting and smoke detector circuits

hvac _ heating, ?zoned? , air flow/exchange

insulation _ vapor barrier, location, amount, 'roof breathing'?

safety _ fire egress !!!! , structure modification(s) for window, joist modification for code compliant new stair to attic

yep, any HO should be able to handle this

(maybe the painting)

ps. ever wonder what the FHA requirements are? they actually may check actual vs. permitted

imo: your attitude is a major part of the problem ... you simply ignore any codes or law which prove inconvenient ... no system is perfect ... remember:

Code = The MINIMUM standards for human ocupation

since we can not (in may cases) even get the MINIMUM compliance your response is to IGNORE the code and laws regarding inspection !!!???

[/rant]

JohnB26 (South Carolina)
Posts: 1,569

Posted:

you really need to read the ACTUAL POLICY which has disclaimers on coverage based upon (lack of) code comliance and 'improper modification' and failure to inspect does NOT relieve the insured of their contractual obligation

if, big if, the ins. co. investigates and finds non permitted work THEY WILL NOT PAY ... read it and weep

JohnB26 (South Carolina)
Posts: 1,569

Posted:

as per: http://www.randolphnj.org/townhall/construction_permits/

[quote[Consequences of working without a required permit:

You may subject yourself to penalties and/or fines of up to $2,000 a day until permits are issued.

If you proceed with your construction project without having a required permit and you get “caught,” before a permit can be issued you will need zoning approval and you may need a variance or Planning Board approval. If these approvals/variances are denied, you may be required to remove the constructed improvement.

You might unknowingly receive substandard materials and/or workmanship from a contractor.

If you have an insurance claim related to any work done without permits, your carrier may not pay the claim. They often check with the township for permits and the required inspections.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Quote:

Posted By JohnB26 on 11/25/2011 10:46 AM
elctric _ adequate receptacles, new breaker at panel, lighting and smoke detector circuits

hvac _ heating, ?zoned? , air flow/exchange

insulation _ vapor barrier, location, amount, 'roof breathing'?

safety _ fire egress !!!! , structure modification(s) for window, joist modification for code compliant new stair to attic

yep, any HO should be able to handle this

(maybe the painting)

ps. ever wonder what the FHA requirements are? they actually may check actual vs. permitted

imo: your attitude is a major part of the problem ... you simply ignore any codes or law which prove inconvenient ... no system is perfect ... remember:

Code = The MINIMUM standards for human ocupation

since we can not (in may cases) even get the MINIMUM compliance your response is to IGNORE the code and laws regarding inspection !!!???

[/rant]

John, you seem to equate permits and licensed contractors with a good job. I wish I lived in that world. Here on planet Earth, permits do little except add a financial burden and delay completion of simple work. Hiring a licensed contractor is a sure-fire way to spend a lot of money to get a slipshod job -- assuming that they even bother to show up. Those of us who want a good job learn to do it ourselves.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

then you are truly a jack of all trades, MASTER OF NONE

i really pity the purchaser of a structure you have 'improved'

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