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April 17, 2017

Is The Condo/TIC You’re Buying in a Building That Needs a Retrofit?

Make sure you do your due diligence when it comes to buying a condo or TIC in a building with five or more units over a garage.

The city adopted a mandatory soft-story law in 2013, which targets buildings in various tiers that are susceptible to failing in an earthquake and requires owners to retrofit as necessary. You might be noticing these jobs happening as you walk or drive up San Francisco’s streets. Many of the buildings are on corners and have multiple garages. The city has notified building owners and has given them deadlines to apply for permits; work costs roughly $30-$50 per square foot—not an insignificant cost.

If you’re considering purchasing a condo or TIC in a building that might need retrofit work, check the seller and HOA/TIC group disclosures first for the retrofit status. There should be information there confirming whether the building is exempt from doing the work, or will be required to do so. (Owners may also have already completed the work.)

Similarly, you should look up the building on the city’s soft-story list to see if it’s on there—and what the status is.

If the work still has to be done and the seller is not planning to pay for it, you need to factor that cost into your purchase and budget. Also consider that you won’t be able to use your garage for a time, which may require you to rent a nearby parking space for the interim.

A recent Chronicle article spotlighted a large group of buildings for which owners have not pulled retrofit permits. Not taking any action to comply could ultimately result in the city fining building owners for code violations, placing a lien on the property, and forcing owners to deal with legal expenses if the city refers the case to the city attorney. Most of the buildings in the current tier that haven’t filed for permits are located in the Marina, Richmond, Western Addition, Chinatown, Castro and Mission Dolores, as per the Chronicle article.

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