Southern California Real Estate-Park Place GMAC Realty-Sir Gabriel Realtor

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Code Enforcement

 

What is Code Enforcement?
The City Code Enforcement Department is responsible for enforcing Municipal Code regulations on private property throughout the city. The Municipal Code regulates parking on private property, zoning, property maintenance, and other substandard conditions on residential, commercial, and industrial properties.

The City contracts with several other agencies to assist with enforcement of regulations. For instance, the San Bernardino County Land Use Services Department conducts weed abatement, and Animal Control is provided by the Inland Valley Humane Society.

An Overlooked Oppertunity

Perhaps one of the most overlooked, or hidden areas of potential real estate investments or even home ownership, is the code enforcement agency of local municipalities. Each municipality has slightly different codes, according to zoning ordinances and economical demographics, but they all operate basically the same. The Code Enforcement agencies are not pro-active, but rather reactive to community complains, including the local police department. But by far, most complains come from neighbors and conflicts between tenants and landlords, or even family disputes.

Gabriel has experienced the potential, of investing in properties that have been issued citations by code enforcement officials, when previous owners were unable to comply or simple did not have the means or knowledge or even negotiating skills to do so. From his experience, he has learned that most code enforcement officers are willing to work with you to resolve the problems. But keep in mind, that sometimes to resolve a problem may require complete demolition of a structure. Investing in non compliant properties can be profitable, yet risky if sufficient research is not done. Gabriel has seen files over a hundred pages long on non-compliant properties. Legal fees due to the local municipalities can run in the thousands as well, depending how long the process is delayed.

In one particular instance, Gabriel purchased a commercial property that had been in non compliance for about a year and a half. He was acting as a Realtor offering his experience to the owner of the property who lived about two hundred miles from the property in non-compliance. The owner of the property was not interested in marketing the property through the normal channels; rather he wanted a quick sale and relief from the headache. The potential buyer and most reasonable buyer was the tenant of five years. He even had a lease option to purchase the property open to him for the entire five years. In Gabriel’s professional opinion, the tenant would have received a property below market value, even if it was non compliant. As it turns out, the tenant being well aware of the problems and his inability to bring the property to compliance, declined on the purchase. The owner was still very interested in a quick sale, he named the price, the terms and he and Gabriel went to escrow as seller and buyer. Gabriel’s first priority was to represent the seller in his interest, not to buy the property per say. While in escrow, the negotiations started with the code enforcement officials to bring the property into full compliance. The title was clouded with a notice of administrative proceedings, so the officials agreed to release the notice and therefore allowing escrow to close so long as the property was brought into full compliance within the specified time, which was thirty days after the close of escrow. It is important to note, it would be nearly impossible to close escrow on such a property if the title has proceedings against it, since title companies will NOT issue insurance on them and lending institutions will not fund unless there is title insurance. But the officials released the proceedings on a written promise to comply, the risk being that if the property was not in compliance within the time frame, the new owner would probably have a very difficult time since he gave a written promise to comply.