Legal 2 vs actual 3 in NYC …Continued - Posted by Frank Chin
Posted by Frank Chin on February 17, 2002 at 08:00:52:
Hi Paul:
This is in reponse to your further questions, and I’m posting the answer here as these issues come up from time to time.
As far as 3 tenants occupying a legal 2, its very common here in NYC. In fact I owned some for 20 years. The guy who owns the building next to the rental of mine rented his illegal unit out since 1957, when the house was built. So did everyone else on that whole block.
Several things can happen. One is, the city comes by and ask that you evict the tenant occupying the illegal unit. And if the kitchen or bathroom is illegal, then they’ll require that you remove it, and have an inspection done.
I had an illegal unit in a legal two, which was purchased that way, but not rented out at the time. The city came by checking out illegal units up and down the street, and looked at mine. The orignal building plan had a bathroom in the half basement, but not a bathtub in it. There was no kitchen in the original plan, but a laundry area instead.
So I hired an expeditor, and had plans filed by an architect. It cost me $1,500, includng architect fees for the expeditor plus another $500.00 for the plumbing inspection. The expeditor and architect fee was extremely cheap as I found out later. It only cost me $300.00 in actual labor to have the bathtub taken out.
BTW, if you don’t file the plans with 30 days of the citation as I recall, there’s a heavy fine. In fact, when our plans was filed, the clerk said, the filing fee is such and such and the fine is so much. Somehow, my wife went down to do the filing herself and said, “wait, we did it within 30 days!”. The clerk was shocked as no one ever filed plans withinin 30 days of a citation.
Apparently, my wife was a ballbuster and got everyone jumping.
I filed for a bar in the new plans in place of the kitchen. This was originally rejected, but the expeditor appealed the rejection and it was appoved higher up. So the sink was replaced with a smaller sink, with all of the kitchen cabinets intact. When the inspectors came, it was approved, but the inspector asked that the gas pipe not be visible in the future. I said “OK, I’ll plaster it up”. He approved it based on that promise.
Then after a year and a half with the bathtub sitting in the back yard, I got the plumber to put the tub back in for another $300.00. I still got to get a tile man to fix a few tiles. So around 3K later, things are back to where they were, except for a smaller sink in the kitchen. I still got to do the plastering.
Just as an aside, I had a gas inspection done at another property and I was chatting with the inspector about illegal kitchens and bathrooms in basements as he said he was on a team checking illegal units. He told me several interesting things.
1- When the city gets a complaint about illegal units, he’ll check up and down the street for other illegal units, particulary, 3 mailboxes or 3 dorrbells on obviously 2 unit buildings.
2- He said while its not easy to legalize an extra kitchen, or even an extra bathroom, its been done. He said Hasidic Jews with large families often file for exceptions and get approvals usually with the intervention of the Rabbi. The city knows that if they turn it down, before you know it, the local councilman is involved.
He said they used to do it for large Italian families filing plans for so called “summer kitchens” as Italians do lot of outdoor cooking, barbecuing in the summer time. But he says its a lot harder to get them approved nowadays.
But, the WORST THAT CAN HAPPEN, for a legal two with 3 tenants is when you have to do an eviction. Lets say you have an illegal tenant in the basement, but the LEGAL tenant on the top floor is not paying the rent.
If you go to housing court, the tenant’s attorney wil argue that the case “CANNOT BE HEARD” till the illegal tenant be evicted first, and the judge will agree. So you’ll have to evict the illegal tenant, then go to court to get rid of the one NOT paying the rent. That’s your punishment.
In my case, I’ll have to weigh it against the fact I collected rent on the extra unit for 20 years. This been one of housing OPEN secrets, and former mayor Koch said that if the city evicts tenants from illegal units, they’ll be a housing crisis in the city.
Currently, one of the illegal units is rented to a tenant also renting second floor for his business. He’s a WEB designer. Basically, I’m in the clear as I’m renting an apartment plus some extra space to this fellow.
As far as NOW MUCH it’ll cost to file plans and legalize it, go pay an architect $150.00 to $200.00 for his time to come by and take a look. I just paid an architect $200.00 recently to take a look at something for me in Nassau County. The buyer of a property of mine paid an architect $150.00 to come and look at my property to review several points on an inspection report. The architect can tell you off hand if its even possible due to zoning restrictions, and things you’ll have to do in filing the plans, such as fire escapes, furnace rooms etc. Also keep in mind things you may have to do to bring things up to current code during such an upgade such as electrical, sprinklers etc.
My guess is, it’ll cost you around 3K to 5K or more in expeditor, architect, and other fees, plus the actual work that’ll have to be done, such as fire escapes etc.
That’s an expensive proposition.
If you have a problem with legal twos with three units, go buy a legal three. They are hard to find as investors are not selling them. I stay away from six families as they are a lot of work and hard to sell, but the main selling point for these is its a LEGAL six.
As far as “section 8”, I own properties in areas where I don’t need section 8 tenants. There’s been quite a bit of discusion of it on the CREONline board about these types of tenants. As with all other types, you’ll have to screen more carefully as section 8 does not do it for you. As for me, I never done it.
Frank Chin