I manage a property in a medium size City in California and received a notice from my client (the owner) who received a notice from the City stating the following: The interior and the exterior of the above referenced property is scheduled to be inspected on May 20th 2018 between the hours of 8:00 a.m. and 2:00 p.m. to see if you are compliant with Uniform Housing code
HAS OWNED PROPERTY FOR DECADES
My client has never gotten a notice like this and he has owned this property for generations. He wanted my opinion on what is going on and what to do about it? The property had been rented out by the same tenant for over 20 years at a low rent. However, she gave notice and moved. We re-rented the property
I HAVE MANAGED PROPERTY FOR DECADES
In all my property management experiences, I have never gotten a randomly selected notice of this type. Yes, I have gotten violations, health department claims, building code notices and requests from tenants and the like but never a systematic inspection carried out by a City as part of their charter
THEY AVE 265 POINTS TO MAKE?
Accompanying this notice is a list of 243 items they will be looking at and for. My first impression was that this is illegal, unenforceable & subject to challenge in a court of law just on its face. Why? At the discretion of the City Inspector, he can cause an owner of a property to spend tens of thousands of dollars and ....
EVICTION of TENANT
Furthermore: In addition to demanded and discretionary repairs, this could cause the tenant to have to move to perform the work. Not only that but if the property is older of which this is, making repairs leads to the inevitable Pandora's box of remodeling i.e. one thing leads to another that needs fixing and or updating
BANKRUPTCY OR FORECLOSURE OR LOSS OF INCOME
If the property has a mortgage or loan on it and the income from the rental is needed to pay it, this immediately puts the entire investment into jeopardy for all concerned. What if the owner is reliant on the income? What about the hardship caused to a tenant that has to potentially move?
CITIES ARE SELF-INSURED
Most people are not aware that cities self-insure themselves thus not having a company that does it. However, cities are run on strict budgets and extra expenses, lawsuits or catastrophes challenges the budget even endangering it. They spend their day to day activities monitoring their welfare and their public
THIS IS CHALLENGEABLE
There are so many laws on city, state and federal levels that they often clash and many are not enforceable or legal. This is not known until these laws are challenged. If they hold, they are fortified. If they fail, they are modified or removed. This situation if filed as a class action may prove costly and winnable too
SYSTEMIC HEALTH & SAFETY INSPECTION
This is what they call it. I know they mean well. The bar for rentals is being raised but at whose expense, inconvenience or request? Tenants are not requesting it, landlords are not so how can it be any ones else business? They go on to say that if it passes it will not be inspected for four years. It also says this.....
FAILING TO PASS THIS INSPECTION
If you fail this inspection, you will be giving a list of corrections to make and a chance to correct before being reinspected. Let me once again bring up that they have a check-off list of 265 items they can choose from and each one comes with time, money and problems of their own all forced upon a property owner
MY RESPONSE TO MY CLIENT
I have reviewed the notice in detail. My first reaction is that it is unfair and possibly illegal to single out residential rental properties as opposed to owner occupied units and make them stand for what could be a costly inspection and repair situation. If this is part of Ontario’s Charter then it may enforceable but contestable in its nature. This would prove costly (need attorney) to do. The City’s intent is to maintain a high standard of living so who can argue that? Even if you successfully prove it is discriminatory in its nature it would involve time & money. The best approach then is to make repairs which ultimately maintains values and conformity for all involved
Out of 265 potential violations (see original list), You have a potential 18 that may or do (by my standards) apply to you for correction. They are listed as follows: 101, 103, 105, 117, 123, 135, 140, 141, 142, 144, 146, 150, 152, 214, 242, 249, 254, 259.
This is a delicate situation because it is dependent on who you get for an inspector. If a by the book hard-nosed person is assigned the benefit of all work will go toward major repairs. If a more liberal person is assigned, the minimum will re required or less can get you by. We have no way to ascertain what type of person will inspect. Be aware they have the power to shut down the rental activity if any resistance or lack of cooperation takes place.
One approach to take which will make this lean in your favor is to go do the work NOW and when the person comes they find most everything looking good which causes them to just write this thing as done (not look so hard) and move-on. If you don’t do the work in advance, it just invites a more thorough inspection. This takes us back to the “what kind of inspector” will we get?
Raising rents to offset these repairs is not recommended as it can be seen as retaliatory.
Fellow professionals...your thoughts?