Do HUD Homes Need Truth-In-Housing Evaluations?

I was recently asked whether or not HUD homes require Truth-In-Housing evaluations, and my thought was sure, they’re required on all properties… but I said I’d check on it.  I did some research on this topic, and I was quite surprised at what I found:

The rules don’t apply to the federal government

In a nutshell, HUD’s position is that Truth-In-Housing evaluations may slow the sale of a property, and “By statute and regulation, HUD is to sell its properties as fast as it can, preferably to owner occupants.”  HUD won’t pay for Truth-In-Housing evaluations, and they won’t complete required repairs.

So how are the various cities dealing with this?  I contacted every city, and the answers were all across the board.  By the way, I use the term 'Truth-In-Housing' loosely – it’s what most people call the required pre-sale city inspection.  These are also known as Truth-In-Sale of Housing, Time of Sale, Point of Sale, and I/I Sewer Inspections.

• Bloomington – Still required.  The city of Bloomington is currently in the middle of a dispute with HUD, but if a property is offered for sale in Bloomington today, an evaluation is required.
• Brooklyn Park – An evaluation is required after the sale goes through, and the new owner must complete any required repairs.  This means that the new buyer is walking in to the deal blind, and could be facing a large list of required repairs immediately after purchasing the home.
• Crystal – No.
• Golden Valley – When I called, I was told “Yes, they’re required on all properties.”  This answer makes me think that the city is not yet aware of HUD’s refusal to participate in this program.
• Hopkins – An evaluation is still required, and the buyer must complete the repairs after the sale goes through.
• Maplewood – “Yes, they’re required on all properties.”
• Minneapolis – No.
• New Hope – Same as Brooklyn Park.  An evaluation is required after the sale goes through.
• Osseo - “Yes, they’re required on all properties.”
• Richfield – Same as Brooklyn Park.  An evaluation is required after the sale goes through.
• Robbinsdale – “Yes, they’re required on all properties.”
• Saint Louis Park - “Yes, they’re required on all properties.”
• Saint Paul – No.
• South Saint Paul – “Yes, they’re required on all properties.”

How this affects the public

When a home is sold without a Truth-In-Housing evaluation, the buyer takes on a larger risk.  The obvious and immediate issue is that these HUD homes may have numerous safety hazards that would ordinarily be identified by a Truth-In-Housing evaluation.  The obvious solution is to get a private home inspection.  Gee, you didn’t see that coming did you?  The less obvious issue is that the new owner may be faced with a list of unexpected repairs when it comes time to sell the property.  Buyer beware.






Reuben Saltzman, Structure Tech Home Inspections - Email - Saint Paul Truth In Housing
    

Saint Paul Truth In Housing Reports - How To Look Up Online

Saint Paul Truth-In-Sale of Housing reports are available online.  Like Minneapolis has been doing for the last three years, Saint Paul is now providing easy access to TISH reports online.  While the reports aren't  'created' online the way that Minneapolis reports are, they are still available in pdf format.

To look up reports, go to www.StPaulOneStop.com .  Click on "Property info and Permits by Address".  Now type in the address that you want to look up.  For example, try 2117 Highland.  Now click "Submit".  Under the "List of Activity" on the next page, you'll see that the most recent activity for this property was a Truth In Sale of Housing Inspection, and there is a link to this report at the bottom of the box.   That's all there is to it.

There are some limitations - only new reports will be available online.  Reports filed before May 1st of 2009 generally won't be available online, but there will still be a record of it.  You'll need to call the evaluator to get the report if it isn't online.  Also, not all reports are available.  Saint Paul is allowing evaluators that are stuck in the dark ages to continue mailing or faxing their reports in, and these reports won't be available online.  This shouldn't last long though - the old school evaluators will soon be required to submit reports electronically like everyone else.

Reuben Saltzman, Structure Tech Home Inspections - Email - Saint Paul Home Inspector

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Useful Links To Public Property Information

Toilet Repair - Fixing An Improper Air Gap On A Ballcock

To avoid a cross connection between the water in your toilet tank and the water you drink, make sure the guts of your toilet are properly installed.  This is required by the Minnesota State Plumbing Code, section 4715.2150, subpart 2, under Flush Tanks.   An improperly installed ballcock requires repair for the Truth in Housing programs in Minneapolis, Bloomington, and Hopkins, and it's considered a hazard in Saint Paul and Maplewood.

This is a very common defect, and the repair usually only takes a few seconds.  The diagrams below show what the two most common ball cocks should look like when properly installed, and the video below shows how to adjust a ballcock made by Fluidmaster, which is the most common one used today.  Click the diagrams for larger images.





For more information on common Truth In Sale of Housing defects, click on any of the links below.

• Smoke Detectors
• CO Alarms
• Vacuum Breakers (backflow preventers)
• Missing Jumper Wire
• Floor Drains

Reuben Saltzman, Structure Tech Home Inspections - Email - Minneapolis Toilet Inspections

I'm Right, You're Wrong... You Win.

I had a ridiculously frustrating conversation with a building official from a local city the other day (I won't say which - I'm licensed in six cities).  I called him to argue about a permit that he approved, but I ended up backing down after I talked to him.   Here's the story.

While performing a Truth in Sale of Housing Evaluation at a property, I noted that the exhaust for the high-efficiency furnace was too close to the mechanical air intake.  The furnace had just been installed, and the owner hadn't even had the city out yet to inspect the furnace.  I showed the owner the installation manual for the furnace, which demonstrated exactly why it was improperly installed.

The owner called the installation company and told them about the improper installation, but the installers suggested he wait until the city inspector came out to look at the furnace.  The installers obviously knew something I didn't.  The city inspector came out, discussed the installation with the seller, and said the installation was fine.

The owner was now obviously stuck in the middle - I'm telling him one thing, and the building official is telling him another thing.   We're always supposed to be on the same page!  To get us on the same page, well, really to get him on my page,  I called the building official to convince him that I was right.

Unfortunately, he completely agreed with me.  I had the whole conversation planned out... and it didn't matter!  He told me about having the exact same conversation with his superiors a long time ago, but was told to back down on the issue.  There are so many houses that have this same improper installation, he was told to just let it go.

As a Truth in Housing Evaluator, I'm acting as a sub-contractor for the city.  I'm supposed to be calling out the defects that they want called out, not calling out what is right or wrong... so I let it go.  Instead of rating this defect as a "B" - Below Minimum Requirements, I changed my rating to a "C" - Comment.   When the home is sold, maybe the buyers will hire an inspector that doesn't like the installation either and tells them to change it.

Click here for details on the Improper Furnace Installation.

Reuben Saltzman, Structure Tech Home Inspections - Email - Saint Paul Home Inspector

Truth-In-Housing Pre-Inspections

If you need a Truth-in-Housing inspection but you’re worried about having 'The City' come through your house, have a pre-inspection done.  A pre-inspection is an inspection done by a private evaluator to let you know about the items in your home that would require repair on an official Truth-in-Housing inspection.   Instead of talking about the details of how a pre-inspection works, I’ll tell a story.  Hopefully this will make it easier to understand.

Jane is getting ready to sell her home in Minneapolis, and knows she needs a Truth-in-Housing inspection before she can list her house for sale, so she hires me, a licensed evaluator with Minneapolis, to inspect her house.  I spend about an hour walking around the house with Jane, making notes in my computer the whole time.

At the end of the inspection, there are a few things I’ve identified that require repair in Minneapolis; non-functional smoke detectors, missing CO alarms, and missing vacuum breakers.  These are rated on the report as RRE items – “Repair / Replace, Evaluator” – this means that an Evaluator (such as myself) needs to verify repair of these items.  Another item that requires repair is the water heater flue, because it’s backpitched.  This is rated as RRP – “Repair / Replace, Permit” – this means that a permit is required to do the repair, and an employee of the city of Minneapolis will need to inspect the repairs  A number of other items are rated as B – “Below Minimum Requirements”.  These are things like a missing handrail at the stairway, missing cover plates on outlets, and a broken window.  These items don’t require repair.
I explain these items to Jane, and tell her she has a few choices:

Get the final report. This is probably her least desirable option, because there will be a bunch of items on the report for anyone to see, making her house less desirable than another house with a ‘clean’ report.   The benefit would be that she can list her house right away.  If she gets the report, she has two more choices to make – fix the items and have them re-inspected, or sell her house as-is.  If she sells her house as-is, whoever buys the house will need to sign a responsibility agreement, saying that they’ll be responsible for repairing the RRE and RRP items, and have them inspected within 90 days of closing.  Most buyers aren’t interested in taking on other people’s repairs, so this is usually a last resort for sellers.

Get a pre-inspection.  This means that I will print an informal list of items that would show up on the final report.  Jane will have 35 days to complete these repairs and have me come back to verify they’re corrected.   I tell Jane that she needs to obtain a permit to repair her water heater flue, but I won’t be checking for permits when I come back; I’ll be checking to make sure the repairs are correct.  The only drawback to doing a pre-inspection is that she can’t put her house on the market right away.

Jane decides to go with a pre-inspection, and has me back out three weeks later.  The re-inspection takes about five minutes, and I verify that Jane has corrected all of the “RRE” and “RRP” items, and has even fixed all of the “B” items.  I give her a clean report, and she puts her house on the market that day.

Reuben Saltzman, Structure Tech Home Inspections - Email - Minneapolis Truth-in-Sale of Housing Evaluator


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Truth-in-Housing Basics

Registered Vacant Buildings in Saint Paul

I’ve been getting a number of calls from potential home buyers asking about Saint Paul’s  recent changes to the way vacant buildings are handled.  The Star Tribune ran an article last year about the woes of a person who bought a Category III Registered vacant building in Saint Paul, and I can't understand what the big deal is... but I digress (I'll come back to this).  The reason I'm writing this is to help Saint Paul Realtors and home buyers.  The biggest question I’m getting is whether homes that I’ve done Truth in Sale of Housing Evaluations on need code compliance, or if they are registered vacant buildings.  These are important questions to ask if you’re buying a vacant building in Saint Paul.
To help understand the issue, here’s a quick summary:

• Saint Paul has three official categories of registered vacant buildings – I, II, and III. 
  • Category I - vacant buildings with no big problems, although buyers are responsible for paying any outstanding fees and complying with any outstanding or existing orders for legal occupancy.
  • Category II - vacant buildings that are condemned or have multiple housing violations - condemned doesn't mean it has to be torn down though.  The seller must obtain a code compliance report, and the buyer must complete the repairs.
  • Category III - vacant buildings with big time problems; these may be dangerous or condemned.  They're the worst of the worst.  These properties cannot be sold until the seller obtains a Certificate of Occupancy, Certificate of Code Compliance, or a Fire Certificate of Occupancy.  This means the bank has to do repairs!
    
• The requirements for Cat III buildings was recently passed on to the seller this November, under a new ordinance which is referred to as the Bostrom Ordinance, named after Saint Paul Council Member Dan Bostrom.
• Truth-in-Housing reports have a large area on the front page where I (the evaluator) need to specify if the property is a Registered Vacant Building, and I need to indicate the Category - I, II, or III.
• Truth-in-Housing reports are static - a report I did 11 months ago is still valid today, but nothing on the report changes, even if the status of the property changes (IE - a property might have been a Cat II when I did the report, and might change to a Cat III two months later, but the report will still show it's a Cat II).

Obviously, it's extremely important to get the most up to date information when buying a vacant building in Saint Paul.  You can't go by the Truth in Housing report.  Here's how to do it:  Go tohttps://www.stpaulonestop.com/AMANDA5/eNtraprise/StPaul/menu/menu.jsp .  Click on "Property info and Permits by Address" and look up the property in question.  Try 120 Elizabeth.  You'll see right at the top of the screen under "Zoning/Use", this is a Vacant Building Category I.  That's it, that's all.

As for the Star Tribune article, I can't understand what the big deal is. A guy bought a vacant building and thought it was a Category II, but it turns out that it changed to a Category III before he bought it.  So what?  He had to complete a code compliance inspection either way.  Now that he owns the property, what's different?  Comments are welcome!

Click here for a printer friendly pdf of Saint Paul's Requirements for the Sale of Registered Vacant Buildings.

Reuben Saltzman, Structure Tech Home Inspections - Email - Saint Paul Truth in Housing Evaluator


RELATED POST: How To Buy A Registered Vacant Building in Saint Paul

Truth-in-Housing Basics

If you’re planning on selling a home in the Minneapolis or Saint Paul area, there is a good chance you will need to have a home inspection done before you sell your house (possibly several).   There are two types of home inspections, private and city.  Today I’ll talk about city inspections.

City inspections are required in 14 metro cities, including Minneapolis and Saint Paul.  At the Truth in Housing page I have a full list of these cities with specific requirements for each city.  These are inspections that must be done by a city employee or sub-contractor for the city before the house is sold, and in many cities, before the house is even offered for sale.  Some cities, such as Saint Louis Park, do code compliance inspections and require repairs to be made on things that aren’t up to code.  Other cities, such as Maplewood, require only a disclosure report, and no repairs ever need to be done.

These reports are commonly referred to as Truth in Housing, Time of Sale, or Point of Sale inspections, among many other terms.  I am calling these ‘city inspections’ for lack of a better term – it would be nice if every city could call their inspections the same thing.  While on that topic, it would also be nice if every city had the same requirements!  In Minneapolis, you need a working smoke detector on every level of the home.  Bloomington requires the same, plus a working detector in every bedroom.  In Saint Paul, you only need one working smoke detector in the home, but it needs to be hardwired.

Even though each city has specific requirements, there are some items that are fairly universal to all the cities that have repair programs:

Vacuum Breaker

• Vacuum Breakers - aka backflow preventers.  This is a device that can be purchased at most hardware stores, and should be screwed on to the end of any exterior sillcocks, or indoor faucets that could accept a garden hose thread (typically the laundry faucet).   These are basically one-way valves that protect the city's water supply from potential contamination.  Note the set screw in the vacuum breaker pictured to the right - this set screw should be tightened down until broken off to make sure the vacuum breaker is permanently installed.
• Smoke Detectors are recommended in every bedroom and one in a common area on every level, such as a hallway.  Take time to test every detector in the house, install new batteries if needed, or replace the detector if defective.   Smoke detectors should ideally be located on the ceiling in the middle of the room, and never closer than four to six inches to a wall if mounted on the ceiling.  If mounted on a wall, follow manufactures instructions for location.
• Plumbing leaks and electrical hazards make up a large portion of the repair items.  Before having your inspection, take time to make sure there are no leaking plumbing fixtures.  To test the sink, fill the sink up with four inches of water, and then let it drain.  Look underneath with a flashlight to make sure there are no small drips, and also check the faucet handles for leaks - laundry faucets are the most common offenders.  To ensure no electrical issues, replace any missing cover plates at outlets and switches - check the outlet behind your fridge too!  Make sure there are no permanently installed appliances running on extension cords - the most common offenders are garage door openers and water softeners.

While these items make up only a small portion of what I look for during city inspections, these are certainly some of the most common repair items, and are often some of the easiest items to take care of ahead of time.  Feel free to contact me for any specific questions about these requirements.

Reuben Saltzman, Structure Tech Home Inspections – Email – Truth in Sale of Housing Evaluator