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City Statute Preventing Rental Rebuild – Strategy Needed

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TheKingfish
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City Statute Preventing Rental Rebuild – Strategy Needed  Reply with quote  

I am posting for my friend JJ who lives in Ann Arbor, MI. JJ owns a concrete-pour multi-family dwelling built in 1943. He lives in one portion of the dwelling and rents two attached apartments. His is a unique income-unit located in a single-family (residential) zoned neighborhood. A city variance for this rental property was created in the 1960’s; he bought the home in 1984.

In 2010, with a fresh appraisal in hand, JJ attempted to refinance his mortgage and had a broker reject him. Related to the new appraisal, it seems the broker was reacting to an applicable city statute that said JJ would be forced to rebuild ‘residential’ if a natural disaster destroyed more than 50 percent of his home. A single-family residential future-structure would have considerably less value. A second broker offered to provide a mortgage but at a premium (increased) rate.

JJ visited city hall and was told to revisit and rectify this at the bank -- not the answer. Another seeming challenge -- who would define the 50-percent destruction level? JJ sees city hall as (1) negatively impacting the value of his property and (2) statute-empowered to rectify. He’s trying to get ahead of this issue so that future prospective buyers will not encounter financing difficulty. Two briefly consulted attorneys were less than enthusiastic, saying it would cost him $10k to sue city hall. Do our collective minds here on the forum have any ideas for JJ?
Thank you,
TheKingfish
Post Thu Dec 28, 2017 4:11 am
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dytto123
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Post Fri Jan 05, 2018 10:13 am
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