Purchasing a home with an unpermitted in-law unit that's currently tenant-occupied poses its own set of risks, said Jeff Woo, a San Francisco property attorney and president of the San Francisco Association of Realtors.
"The main liability of owning a property with a tenant in an illegal in-law is that you probably are uninsured for a lot of things - your insurance carrier does not know that there's a tenant there," Woo said.
"The city could serve you a notice of violation, and you suddenly have a $5,000, $10,000, or $15,000 liability to the tenant to pay them to go."
In some cases, tenants may sue for back rent because even the nicest unpermitted units are, legally speaking, uninhabitable, Woo
No one can be certain of the number of unpermitted in-law units in San Francisco, but some estimates put the figure at around 40,000, he
To bring such units up to code, homeowners must investigate whether the building is even zoned to allow two units, as well as examine parking and ceiling-height requirements, among other considerations.
Buyers looking to occupy the entire home can pull a permit to remove the in-law unit's stove and give tenants a 60-day notice to vacate, Woo