?'s about illegal apartments

DH and I are interested in buying a house that currently has an illegal apartment. It is a side extension with its own outside entrance... right now the house is listed with low taxes however I have a feeling the taxes are not reflecting the fact there is an apartment. My questions are this:

1- what is the advantage of having an illegal apartment? is it just about your taxes increasing?

2- can a homeowner sell a house with an illegal apartment or will they need to legalize it before they sell?

a part of me just wants to walk away from this deal because its so confusing. I told DH that if we get the house we would probably be better off just knocking down the wall, taking out the kitchen and getting rid of the apartment all together.
Would our taxes be lower if that part of the house was NOT an apartment?

Message edited 5/10/2009 11:53:34 PM.

Re: ?'s about illegal apartments

What is your plan regarding the existing tenant? Are you just going to get rid of him?

Remember that even though it may be an illegal apartment, you have to treat the tenant the same way as if it was a legal apartment. I would ask these questions right away to the seller/agent.

Does the tenant have a lease? If the tenant has a lease, you have to uphold the terms of the lease. Buying a house from a seller doesn't make the lease null and void at closing. The tenant has a right to stay there.

If the tenant is on a month to month and you want the tenant gone, does the tenant know that when the house goes under contract he has to leave?

Is the existing seller going to start the process of getting the tenant out (giving 30 day notice), or is he going to leave that responsibility to you?

If the seller does nothing, you will have to evict the tenant yourself. This may take time and you may have a tenant living in the house.

Now if you plan on keeping the tenant, then its just a matter of whether or not you feel comfortable having an illegal apartment. But by the way you are talking regarding knocking a wall down, it sounds like you don't want the tenant. You just have to hope the town doesn't find out there is an illegal apartment there while a tenant is living there.

Re: ?'s about illegal apartments

this is tricky - if it's an empty apartment and does not have a CO for it - you will get nailed for it. Taxes will go up, etc. Unless you rip out the part that make it a apartment (stove or bathroom depends) if there is a CO for the bathroom and not the kitchen that is easy (take out the stove) if there is no CO for both that is when you are going to $$$$$.

Personally we are trying our hardest not to have apartments in the houses we are looking at even though you get money and it helps out but the trouble to rent is not worth it to us. You have to think - your buying a house to be basically living in a house/apartment. You have to live with this person - noise, filth and all!

Re: ?'s about illegal apartments

We bought a house with an illegal basement apartment. We didn't have any issues with it. We were never asked for CO's for either the bathroom or the kitchen. I would assume if the structure is an extention on the house it would already have a CO??

In our situation the tenant they had chose to move out before we moved in.

Re: ?'s about illegal apartments

The advantage to an illegal apartment is just additional income that isn't being counted.