In the spring of 2009 had the pleasure of listing and selling a stunningly beautiful Monte Sereno home. This house had been on the market the year before with a different agent and brokerage but had not sold after many months. This was a tough time for the Monte Sereno real estate market.... When that listing expired, the owners contacted me to assist them since they had seen this blog and several of my other online sites and tools, and they felt that I had an excellent pulse on the market.
With a change in marketing and a small change in pricing, we got it sold in just 24 days! The inspections and appraisal went well. The disclosure paperwork was handled, everything seemed to be going along fine with this escrow. . . .
Sometimes, selling the home is just the beginning of the challenge in getting it closed
However, there was a huge hurdle that none of us saw coming. The buyers pulled the permit history for this house from the city of Monte Sereno and to everyone's horror, the file stated that the home was built with a permit, but that it was never finaled (or given the city's final "OK"). Understandably, this was going to be a significant issue to the buyers, who naturally expected something as basic as a final on any home they would purchase. (There are risks with insurance if it's missing.)
It did not seem possible that this exquisite home did not have a final for a number of reasons. First of all, the home was built by an exceptionally good builder, Rick Raynes of RAR Construction, and he was the first occupant of the house. Getting homes built, approved, and sold is what he does professionally so the odds of his forgetting something major like getting a final seemed infinitely slim (turns out, he didn't - more on that below). Second, the home was improved many times but there was a "gap" in the file history of about 10 years. How likely was it that nothing was done in that time that required permits and finals? Third, in 2006 the owners at that time did a master bathroom remodel and got it permited and finaled. Wouldn't the city of Monte Sereno have noticed, when doing that paperwork, a huge problem such as the final not being in the file?
So for a number of reasons, the sellers and I did not believe that the Monte Sereno building permit history file was complete on their home. Unfortunately, though, what we believed didn't matter. What matters is what you can prove, and in the case of building permits and finals, you're guilty until you can prove yourself innocent.
What to do?
"The Solution" did not look like it would be easy, fast, or cheap. The building inspector for Monte Sereno, Howard Bell, informed me that the way to remedy the problem would be to reactivate the initial building permit (17 years later - pay the "road impact fee" and and other fees over again, amounting to thousands of dollars - we were warned it would be between $5 and $10 thousand) and then to bring some aspects of the property up to 2007 code for some health and safety issues. Sound expensive? You bet it would be.
My goal was to get the home sold and closed without my clients being penalized for something that either wasn't wrong or wasn't their fault if it was wrong (and of course, treating the other side of the transaction fairly and honestly too). I picked up the phone and called other Realtors in Los Gatos whom I thought might have bumped into a problem like this: I was seeking to find a better solution than the expensive one that Monte Sereno insisted that we needed to do and overturned every relevant stone I could find.
One agent suggested that I call the Town of Los Gatos to see how it might handle such a problem. I did, and it learned that they take homes on a case-by-case basis and often the solution is very quick and inexpensive - relatively easy compared to reactivating an old permit and bringing some aspects of a home up to current code!
Next I spoke with Brian Loventhal, a pleasant gentleman who's the city manager for Monte Sereno. I explained my concerns, my sense that the file was incomplete, and other easier alternatives that might help solve the problem without punishing the sellers. He promised to speak with the city attorney and the building inspector and get back to me. (After a week or so, he let me know that after the city attorney did some research, the answer was the same - do the upgrades to the home to fix the permit problem. They were unbending - this was a problem that we simply had to fix if we wanted the file to show that the home was finaled.)
Next I located and phoned the original builder, Rick Raynes, to ask if he had any paperwork on the home. Rick said that the home was finaled, but that he didn't have the paperwork for that - it had been many years since he owned and sold it. He was generous with his time and was in disbelief at what we were asked to do by the Monte Sereno building department.
We waited to hear back from the city manager and hoped that Monte Sereno would come up with a more reasonable solution. Meanwhile, though, the clock was ticking. In home sales, time is always of the essence. After a few difficult days of waiting, my clients decided to go ahead and re-activate the building permit (about $8000 in fees) so that Howard Bell, the Monte Sereno building inspector, could walk through the home and give us a to-do list.
Within a couple of days, we had that inspection and got a lengthy punch list of 29 items that Howard Bell required for the final. This was not going to be inexpensive, as it involved staircases, electrical work, and thresholds, among other things.
The buyer's agent and I each brought in contractors to get a dollar amount. Hers weighed in at about $24,000. Mine came in at around $8000.
Rick Raynes: Builder, Contractor, Go-To Guy, Superhero
I phoned Rick Raynes again - would he please do a bid for these upgrades? We all agreed that he does good work.
Rick couldn't believe that we were having to do all of this; in fact, he was really upset about it and promised me that he would talk to the folks at Monte Sereno and see if he couldn't set things right for us. He spent quite a bit of time in efforts to assist us, and I need to note that this was above and beyond any builder's duty 17 years after construction. The next day, Rick Raynes phoned me and said that he had good news: there was proof, from a letter in 2000, signed by Howard Bell himself, indicating that the home really did have a final. We arranged to meet a few minutes later so that he could give me the letter.
Needless to say, I hugged him on sight. My sellers screamed for joy when I phoned to tell them that we'd be getting their eight thousand dollars in permit fees reimbursed, and that there would not need to be upgrades to the home to get the final. We have it, thanks to the sleuthing of the incredible builder, Rick Raynes. (Brian Loventhal later did apologise on behalf of the City of Monte Sereno, and he did make sure that the owners were refunded their money in fees within the week.)
How did this Monte Sereno permit and final mess happen?
Apparently Howard Bell had put that same letter in an "electronic file" with the City of Monte Sereno. Was it misfiled electronically? Are there simply two filing systems for permit and final records in Monte Sereno? Were these archives which were saved electronically? Possibly the latter.
Whatever the case, this whole nightmare with the permit and file status of my listing in Monte Sereno was caused by incomplete and inaccurate records in the building department of that city. So much upset was caused, and so much time wasted: not just the buyers' time and the sellers' time, but also the agents, the city of Monte Sereno employees, the contractors who came out to give us bids.
What can you do to protect yourself from being victimized by a building department's errors, if you are a homeowner?
Always keep a copy of your permits, finals, and inspections. When you sell your home, give those records to the next owner (it would not be a bad idea for you to keep a photocopy of them for yourself). Do not count on the city, town, or county to have accurate records: often things are missing or misfiled. Usually it's not a problem of this magnitude, but it's possible.
(1) Pull the history, but understand that it might be wrong. Realtors know that building permit files are often incomplete. Buyers and sellers may pull permits, but the information gleaned may not be correct. If you request the permit history, and get the file, it may be difficult to read or interpret what's meant.
More cities and counties are going online with the permit files. In San Jose, it is exceptionally easy - here's the link:
https://www.sjpermits.org/permits/permits/general/generalquery.asp In other places, though, you must go to the town or city in person to view the permit history file or to obtain copies.
(2) Overturn every stone. Check every avenue for resolution. There may be hidden information that can be a big help - it may just be a matter of finding it. I am grateful to the many Realtors and other real estate professionals I spoke with during our long three weeks of permit limbo for the direction, guidance, hints and insights they provided to me. Never underestimate the power of continually asking questions and seeking outside help.
(3) A great builder is worth his (or her) weight in gold. Rick Raynes did not have to drop everything to assist us in addressing this massive failing in the Monte Sereno building department's files for my listing. But he did, and he solved the problem for us, saving my clients between $16,000 and $32,000. This is an "above and beyond" contractor who not only does fantastic, high quality work, but he stands behind it years past any legal or contractual obligation. Rick does both residential and commercial projects. Needless to say, Rick Raynes gets my highest endorsement! Here's his contact information:
If you would like to see photos of his work, please visit this page on my website - you'll see the quality in the detailing!
(4) Keep your own permit file. Do not rely on any government entity to have a full and complete file. Remember, this is one area where you're guilty until you can prove you're innocent: and that can be a very expensive spot.
For more reading on Monte Sereno homes & housing market
The Monte Sereno Monthly Real Estate Report
Blog posts on Monte Sereno (my Valley of Hearts Delight blog)
Browse Monte Sereno homes for sale (listings - no registration required)
Monte Sereno School Information