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Posted: 3/24/2012 7:04:38 PM EDT
I'm concerned about purchasing a building only to have the building department cite some new regulation that makes the building unuseable.

The situation:

I'm moving to Port Orange, FL and want to buy a building for my business.

I'm looking at 6-10k sq ft steel industrial buildings with a small office. I've located several, many are vacant and some are bank owned so prices are reasonable.

I've done commercial construction, plus a purchase offer would have a due diligence period for private inspections, so the physical parts of the building don't worry me.

Of course, a lawyer and title company will take care of their items.

I understand vacant buildings must meet current building codes to get a certificate of occupancy. But the Building Department won't do a pre-purchase inspection.

Most buildings are bank owned and being sold "as is". So not much cooperation from sellers, take it or leave it.

I have zero experience with building departments - my previous area had no building inspections.

I 'm concerned about making a purchase then the Building Department citing a regulation that makes the building unuseable, like new hurricane, earthquake or who knows code.

The private building inspectors I've checked don't get into code compliance, only the physical qualitiy of the building.

Any suggestions on how to proceed or local contacts ?
Link Posted: 3/25/2012 4:41:45 AM EDT
[#1]
I need to get this moving.

I'd really appreciate some help, guys.
Link Posted: 3/25/2012 4:48:38 AM EDT
[#2]
Go down and talk to the building inspection guys on an informal basis.  They will tell you if it is a nightmare or not.  Most of the time there will be someone in line who has experience and will give you some insight as to the pit falls.  The lawyer you use, if board certified in real estate law should also know.
Link Posted: 3/25/2012 3:59:40 PM EDT
[#3]
I've tried talking with the building inpection guys but they're very formal and won't discuss it.

The lawyer that handled our home purchase has recommended other lawyers that handle code appeals and variances.

I'm hoping to avoid buying and needing appeals but I've got calls out to them.

Being new to the area and without contacts leads to a lot of dead end calls.

Link Posted: 3/25/2012 4:40:54 PM EDT
[#4]
port orange

eta ...I may know some folks
Link Posted: 3/26/2012 3:20:29 AM EDT
[#5]
Schmoopy, I could use any contacts.


Link Posted: 3/26/2012 3:30:18 AM EDT
[#6]
Contact Christopher Weir at Port Orange Fire Dept.  He is the Fire Marshal and can prob give some insight.  Good Luck.
Link Posted: 3/26/2012 3:38:22 AM EDT
[#7]
Find a building inspector with commercial inspection experience.  Make the contract contingent on the inspection.  If the building fails inspection, walk away if they won't make corrections.  It will cost you some money if the building fails, but it's better than being stuck with a white elephant.
Link Posted: 3/26/2012 3:42:39 AM EDT
[#8]

These guys can help you….













 
Link Posted: 3/27/2012 5:15:01 AM EDT
[#9]
Quoted:
These guys can help you….




 


I checked but they will only work for citiy/county/state agencies. No private work. Thanks for trying.

I think I need an engineer / architect / construction company with good relationship with city building department.

Link Posted: 3/27/2012 5:45:38 AM EDT
[#10]
bribes usually work

or extortion, whichever suits you best

that's mostly what building departments do.
Link Posted: 3/27/2012 5:58:16 AM EDT
[#11]



Quoted:


bribes usually work



or extortion, whichever suits you best



that's mostly what building departments do.
Lol.



I was trying to erect a lighted box sign in a place that would require a variance; w/o incriminating anyone, I'm pretty sure they were asking me for a bribe in a roundabout way to get it done
Speed
 
Link Posted: 3/27/2012 6:22:09 AM EDT
[#12]
Why do you want to buy???   I leased buildings in FLA.   I never wanted the hassle of repairs.   Especially roof leaks and AC units failing.

Let a landlord deal with the paper work, permits and  such.


GD
Link Posted: 3/27/2012 6:40:44 AM EDT
[#13]
"Authority Having Jurisdiction"

IOW, the building dept can tell you everything looks good on paper, and the field inspector fail your ass because he doesn't agree with the in-office review from his own department. I deal with it all the time...

Two issues for you right now:

1. The new Code took effect March 15 and most people aren't up to speed on any changes that have occurred (myself included)
2. The last Code, and I'm sure the new one did nothing to take away from it, required compliance with current code if you renovate more than 50% of the value of the building, or if you change occupancy classification.

Somebody mentioned the local Fire Marshal and that's a good place to start, but that office will not comment on building code issues outside of complaince with NFPA and FL Fire Prevention Code issues.
Link Posted: 3/27/2012 6:41:10 AM EDT
[#14]
I don't know about Florida, but I have purchased in DC, VA, and TX.  Any reputable commercial real estate broker should be able to connect you with someone.  I now use a company that has a good reputation as a contractor building commercial property, I pay their engineer and inspector to come out and look at properties.  A new builder will also be familiar with the current building codes since they deal with them daily.  A little more expensive of an approach, but that engineer has saved me a lot of money.
Link Posted: 3/27/2012 6:43:38 AM EDT
[#15]
Piggybacking on another post...

A good architect will want about $130 per hour and would be able to give you an idea of what he really have on your hands. Of course, it won't matter if the AHJ I mentioned in my last post sees things differently but it's better than shooting from the hip or even contracting with a private inspector who may or may not be able to address some of the structural/wind issues and/or occupancy issues.
Link Posted: 3/27/2012 7:11:54 AM EDT
[#16]
How much would a city inspection cost?

Can you go apply for a CO before you purchase it?  Maybe make your offer subject to the inspection?

It is common to make land purchases subject to required zoning changes.

I realize this will probably cost several hundred dollars, but better to find before you commit thousands to buy it.
Link Posted: 3/27/2012 6:49:18 PM EDT
[#17]
"Why do you want to buy??? I leased buildings in FLA. I never wanted the hassle of repairs."  I've always owned, the repairs are no big deal. Plus I can buy twice the sq ft for less than 10 years lease.

"required compliance with current code if you renovate more than 50% of the value of the building, or if you change occupancy classification." I understand if the building is vacant, it must meet current code. Makes me wonder - does that mean everything, even the structural steel, that'd suck.

"I now use a company that has a good reputation as a contractor building commercial property, I pay their engineer and inspector to come out and look at properties. A new builder will also be familiar with the current building codes since they deal with them daily. A little more expensive of an approach, but that engineer has saved me a lot of money." That would work for me, well worth the money.

"A good architect will want about $130 per hour and would be able to give you an idea of what you really have on your hands. Of course, it won't matter if the AHJ I mentioned in my last post sees things differently but it's better than shooting from the hip or even contracting with a private inspector who may or may not be
able to address some of the structural/wind issues and/or occupancy issues." Same as above. Looking for names.

"Can you go apply for a CO before you purchase it? Maybe make your offer subject to the inspection?"  banks are selling as is and the city won't inspect until a business license application is filed, which requires building owner signature (which would be after I purchase).  

Paying for professional help isn't an issue, really need an engineer / architect / construction company with good relationship with city building department.
Link Posted: 3/28/2012 5:16:08 AM EDT
[#18]
Can anyone recommend a engineer / architect / construction company in Port Orange ?
Link Posted: 3/28/2012 6:25:46 AM EDT
[#19]
Get a lease to own owner contract with a building compliance clause.  Then you just move in, get your C/O and pay off the loan.
Link Posted: 3/28/2012 6:44:27 AM EDT
[#20]
Quoted:
banks are selling as is and the city won't inspect until a business license application is filed, which requires building owner signature (which would be after I purchase).  


How much would a business license application cost to be filed?

I understand the bank is selling "as is, where is", and wants to sell with minimal hassle, but no one is going to offer anywhere close to market value unless they have a really good idea what the cost to "move in" is.

Why won't they bank sign the business license application so you can file your application and get the inspection?

Again, I realize this will probably cost you several hundred dollars, but you are going to spend that  on an engineer / architect / construction company anyway.

The only way for you to know for certain, is to get something in writing from the city.
Link Posted: 3/28/2012 6:58:20 AM EDT
[#21]
Get a certified General Contractor to go through building and determine if everything meets the current FL Building code. Cities can only change land use with a vote of the city population and/or emergency powers of commission. Not really an issue if the building is up to current code.
Link Posted: 3/28/2012 7:13:51 AM EDT
[#22]
Quoted:
""required compliance with current code if you renovate more than 50% of the value of the building, or if you change occupancy classification." I understand if the building is vacant, it must meet current code. Makes me wonder - does that mean everything, even the structural steel, that'd suck.


Yes, it would suck. I just looked at building here (Bay Co) that I know good and damn well should have a fire sprinkler system installed during the renovation based on two or three criteria but the local yokels decided it wasn't a big deal to it slide. Ironically, I just got stuck with adding a system to a small restaurant that doesn't need one per Code but the local (different) guy just thought it should be there. .
No offence to the contractors, but they will often times omit (whether intentionally or not) items during a site visit to make a job look more realistic and thus get said job, while an architect is going to be more apt to perform a full building code analysis as part of their review. A good architect/contractor team - some design/build expereince together, well-respected, etc - is your best bet. Unfortunately I don't have any contacts in that part of the state.

Link Posted: 3/28/2012 7:16:05 AM EDT
[#23]
In Texas, I had a deal fall through because of no certificate of occupancy. I was buying a facility on the condition that the company that owned it, was buying another facility 1/2 mile down the road. They basically needed our capital to swing the deal on the other facility. Our deal was pretty clear cut, they were operating the facility and the titles were clear, etc.

The other facility was a nightmare. It was actually built on 3 different pieces of property by the original owner (my Dad knew the guy for like 30 years) under 3 different building zones, commercial, agricultural and residential, no building permits for anything, but it was in a shit part of town, he paid the taxes on everything and the city left him alone and he made a lot of money. Then his wife divorced him and took the facility from him.

Fast forward 4 or 5 years and she ran the company into the ground, they owed like $30k to the gas company etc. and she shut the doors and turned off the electricity. Essentially abandoned the property, walks away. A year later, she enters into an agreement with the other company to buy the property for an undisclosed amount. They start cleaning up the place while the lawyers and title companies figure everything out. They call the electric company to come out and turn on the power. They ask for a CO. They check with the owner, she doesn't have one. Original owner never had anything.

So they go to the city to get a CO before the deal is finalized. They bring everything up to code, but the city won't budge until the zoning is fixed. More lawyers, title specialists, etc., basically to find out it would take more than 2 years at a minimum to get the zoning changed. Last I heard, the deal was stalled, not going anywhere.

That killed/stalled my deal. I think we still have a deposit sitting on the property in case they're able to swing the zoning, but I'm not counting on it. I would have hired another 10 to 15 people if we had the facility.

If no one from the city is going to stick their neck out and say, yeah, it's good, I wouldn't buy. Go somewhere else.
Link Posted: 3/28/2012 7:23:30 AM EDT
[#24]
Quoted:
Quoted:
""required compliance with current code if you renovate more than 50% of the value of the building, or if you change occupancy classification." I understand if the building is vacant, it must meet current code. Makes me wonder - does that mean everything, even the structural steel, that'd suck.


Yes, it would suck. I just looked at building here (Bay Co) that I know good and damn well should have a fire sprinkler system installed during the renovation based on two or three criteria but the local yokels decided it wasn't a big deal to it slide. Ironically, I just got stuck with adding a system to a small restaurant that doesn't need one per Code but the local (different) guy just thought it should be there. .
No offence to the contractors, but they will often times omit (whether intentionally or not) items during a site visit to make a job look more realistic and thus get said job, while an architect is going to be more apt to perform a full building code analysis as part of their review. A good architect/contractor team - some design/build expereince together, well-respected, etc - is your best bet. Unfortunately I don't have any contacts in that part of the state.



flcroc brings up a good issue regarding the sprinkler system.   One of my stores had a fire that was started by burglers cutting through the door with a cutting torch.   If it had not been for the sprinkler system everything would have been lost.   Still lost a lot but was able to reopen within 5 days.   And in small towns the fire depts are volunteers and slow to respond.  
I would never have a building without sprinklers.
Link Posted: 3/28/2012 7:24:05 AM EDT
[#25]
I think your biggest risk is going to be with latent environmental/EPA issues. I know of a building in Jax that was set for renovation when it turned out a detention pond on the property was full of some dangerous chemical (aircraft paint primer IIRC). There were lots of fingers pointing at each other but the people that really suffered were those that had already laid out the money to purchase/lease the property.

Stay away from the Cabbage Patch

I know there is a lot of vacant/abondoned property in Volusia Co. with a lot of risks/unknowns involded in re-occupying it.
Link Posted: 3/28/2012 7:32:32 AM EDT
[#26]
Quoted:
Quoted:
Quoted:
""required compliance with current code if you renovate more than 50% of the value of the building, or if you change occupancy classification." I understand if the building is vacant, it must meet current code. Makes me wonder - does that mean everything, even the structural steel, that'd suck.


Yes, it would suck. I just looked at building here (Bay Co) that I know good and damn well should have a fire sprinkler system installed during the renovation based on two or three criteria but the local yokels decided it wasn't a big deal to it slide. Ironically, I just got stuck with adding a system to a small restaurant that doesn't need one per Code but the local (different) guy just thought it should be there. .
No offence to the contractors, but they will often times omit (whether intentionally or not) items during a site visit to make a job look more realistic and thus get said job, while an architect is going to be more apt to perform a full building code analysis as part of their review. A good architect/contractor team - some design/build expereince together, well-respected, etc - is your best bet. Unfortunately I don't have any contacts in that part of the state.



flcroc brings up a good issue regarding the sprinkler system.   One of my stores had a fire that was started by burglers cutting through the door with a cutting torch.   If it had not been for the sprinkler system everything would have been lost.   Still lost a lot but was able to reopen within 5 days.   And in small towns the fire depts are volunteers and slow to respond.  
I would never have a building without sprinklers.



But that's a pretty rare case. My issue is the lack of continuity in general with building departments, officials, field inspectors and fire marshals. It doesn't really matter if the in-house approved your project because if the field guy decides something is off you have a fight on your hands to get back on track, regardless of what happened before - and this is with a set of approved construction documents in hand. Imagine how ugly it could get if all you have is a face-to-face meeting and a couple of phone calls where Mr. So-and-so okayed your idea.

The worst part of my job is dealing with cleints who have to add something because the AHJ decided they just want it (see my sprinkler example above) - it's not Code required and the client didn't ask for it so we didn't inlcude it in the pertinent design(s), now the client has to pay for it and wants us to chip in or cover it all. It's difficult to tell someone to eat a bag of dicks when they aren't directly your customer to keep or lose so I often have to have these fights thru the architect that may or may not decide to back me up.

Link Posted: 3/28/2012 6:58:25 PM EDT
[#27]
Both banks have stated "no gov't inspections prior to sale" on the two properties I'm most interested in. Yea, I know, red flag, but maybe that is just bank's standard procedure.  I need to check if that is normal for bank owned properties.

This is a big deal to me and of course I'm trying to be as well informed as possible.

Lot's of good ideas and comments, keep'em coming.

Link Posted: 3/29/2012 4:56:33 AM EDT
[#28]
I was going to say that my town has a "clean and show" CO that allows utilities to be turned on because utility companies won't (can't?) connect without one.

Clearly the banks are not interested in getting as much as they can.  I would offer them 35 or 40% of what you think it is worth and be prepared to move on.

Think about this:

"I found a car for sale, but you can't open the hood much less try to start it or take a test drive."

The car may be fine, but I would plan on having to replace the engine and/or transmission, so my offer will reflect such.


How long has the building been for sale?  Can you afford to wait another year or so?
Link Posted: 3/29/2012 7:16:12 PM EDT
[#29]
The banks have owned the buildings for 1 to 3 years.

They have dropped the prices about 40% since first listed. The current asking prices are less than 40% of comparable properties.

The car analogy is good, but this purchase also requires government approval.
Maybe a missing title deal.

I started looking last summer and can go another year or so before I need to purchase, so I'm not pushed. Good deals are out there but either of these properties could be a great deal.

Link Posted: 3/30/2012 4:35:15 AM EDT
[#30]
Any bankers or real estate agents know any good reason for the "no government inspection" position of the selling banks ? Other than if they know the property
has major problems.

Any suggestions on how to structure the deal so banks cooperate ?

Link Posted: 3/30/2012 4:47:40 AM EDT
[#31]
They probably don't want the building department snooping around and condemning the building - then they have absolutely no shot at getting rid of it.

Look at this way...if you see something you REALLY want and it's discounted as much as you claim it is you could still buy it, spend a shitload bringing it up to Code and you'd still only have in it the same as a comparable buildign purchased at or near market value, plus you had a big say in the (new) updated finishes. It all depends on the viewpoint - either A) look at how cheap I can get this building, but upgrades make it not a steal anymore, or B) look at this kick-ass building I have after raping the bank and rennovating it myself.
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