[Noisebridge-discuss] moving questions

Geoff Schmidt geoff at geoffschmidt.com
Wed Jul 22 22:11:28 UTC 2009


On Jul 22, 2009, at 11:22 AM, Rachel McConnell wrote:
> * what are the consequences of code violations?
> If anyone can answer this one from experience or direct knowledge,
> please do!

Source: Frank conversation with several people at the SF planning  
department a month ago; past research with actual paid SF real estate  
lawyer about warehouse conversion projects some 6 months ago; my past  
experience with commercial leasing in SF

--

If the city investigates and determines that work has been done  
without permits, the penalty has two components.

1) The first is a fine of nine times what the permit issuance fee for  
the work would have been. The permit fee is a sliding scale based on  
the total cost of the work. There are several components to the fee:  
(a) The planning department fee is $305 for projects with a total cost  
under $10k. (b) The DBI permit fee which for a building alteration is  
$400-500 for projects $5-10k. (c) Separate plumbing/mechanical, and  
electrical fees. Electrical is $240 up to 20 outlets. Not sure if  
plumbing/mechanical applies but if it does it's in a similar range.

Add that up and you're in the vicinity of $1k, so a fine is in the  
vicinity of $9k. However, the planning department said they're often  
willing to waive their fine or reduce it to 3x if you appeal. Not sure  
if this applies to DBI.

2) The second is that you must correct the work. If it's not up to  
code (or, planning department said, if you really piss off your  
inspector) they can make you rip it all out at your cost. Typically  
when work is done with permits there are intermediate inspections  
during construction so that they can see that you're doing things  
right. So when work is done without permits, even if it's up to code,  
they can make you open walls so they can do the intermediate  
inspections.

The city has a lot of discretion. For example, if you pull a permit  
and it becomes clear that the existing improvements in the space  
weren't done with permits, they can simply let them stand and include  
them in the new permit so that they become legalized.

---

Beyond this, you still have to comply with all laws, so there are  
additional implications.

1) A building has a use registered with the planning department. There  
are many rules about what uses are allowed where, and many caveats  
required with the use (for example, amount of parking that must be  
provided.) If your use isn't allowed by the rules, and you haven't  
gotten a variance (exception), the planning department can make you  
stop using the building that way and fine you for every day that you  
continue. Just like in Simcity, industrial and office uses are  
completely distinct from the perspective of the planning department.  
The planning department has wide latitude to tolerate illegal use, but  
that ends when they get a complaint.

2) If a building is not up to code, it may not be safe to occupy.  
("Safe" is defined with respect to a particular type of occupancy,  
like office or residential occupancy.) If the building is not safe to  
occupy, the city can make you not go into it until it's made safe.  
Anecdotally, the fire department's hammer is especially large and is  
fond of immediate orders to vacate. If you ignore the city's  
instructions, again they can fine you for each day. IIRC (sorry, don't  
have time to look it up) it's also a misdemeanor with potential jail  
time to have authority over a space and permit others to occupy it  
after the city tells you it's unsafe, so there could be some criminal  
liability for the board/directors in this scenario.

3) Your lease probably says you have to follow the rules, so you'll be  
in breach of your lease, which has potentially dire consequences  
depending on the lease (termination and liability for lost rent.) If  
the city gets involved, your landlord is going to get as much hassling  
from the city as you are, and may be tempted to kick you out and bill  
you for the cost of finding a new tenant. In particular the landlord  
may feel that he needs to do this to avoid liability for your actions.  
("I didn't know they were doing that")

---

*Summary*

If you move into a formerly industrial space and use it as an office  
(a different planning use), and you spend <$10k to rearrange the  
partition walls and make minor plumbing and electrical modifications,  
and you don't Go Through Channels, and somebody notices/complains..

* You could be fined ~$10k and made to rip out all your work. More  
likely, if you're nice to them, you'll be fined a somewhat smaller  
amount, and made to pay licensed contractors to bring the space up to  
code (possibly involves opening walls to demonstrate that any  
electrical in them is up to code if the inspector is worried about it.)

* Until the space is up to code, if there are legitimate safety issues  
(or you piss someone off), you can be prevented from going in the  
building. If you ignore this you could be in deep shit.

* You may be fine on the planning department front, or you may find  
that technically you're supposed to be providing parking or something,  
or in the worst case that your use isn't allowed. (Office use is in  
fact restricted in many parts of the city.. sorry, don't have time to  
check this parcel, but you can do it online.) In this case you'd have  
to plead your case through the variance or conditional use process,  
which costs a few thousand dollars, takes a month or two, and involves  
public hearings. In the mean time they'd be within their right to keep  
you out of the building, but the people I talked to there seemed nice  
and the kind of folks that'd try to work something out.

* If you're not good friends with your landlord, as soon as there's  
any trouble, he may decide it's easier/safer to kick you out and keep  
your security deposit. Worst case (in a typical AIR lease, from  
memory), you'd also be on the hook for rent until the space can be  
rerented, plus the difference between what you were paying and what  
the new tenant is paying for the term of the lease, plus broker's fees  
and other expenses.

Hope this helps,
Geoff



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