Council Moves Forward with Major Change to Way Homes, Condos in Pasadena Are Sold

Published : Tuesday, May 8, 2018 | 5:11 AM

Before dozens of local realtors and agents gathered in Council chambers, the Pasadena City Council, deftly sidestepping a staff recommendation, instead agreed upon a slightly different approach for the City’s long-standing and controversial Residential Occupancy Inspection Program.

The Occupancy Inspection Program involves the city-mandated inspection of homes as they are being sold in order to ensure up-to-date compliance with city building codes. The process results in the issuance of a Certificate of Inspection, without which the sale cannot be completed.

As Podley Company realtor Adam Bray-Ali explained at a previous meeting, “There is a city occupancy inspection, and it costs roughly $180. Typically the homeowner pays for it, but it’s negotiable, and it’s required in Pasadena.”

According to Bray-Ali, the City also looks at sidewalks and health and safety issues.

“Whatever they say needs to be repaired, you need to pay for it and repair it,” Bray-Ali added.

But as numerous realtors and brokers told the Council Monday, the current home-buying dynamic in the city already requires a host of reports and inspections, rendering the City’s program “redundant,” a word, ironically, used often in the evening’s discussion.

The new recommendation, which is still to be formalized, would require private inspectors to submit a form to the City stating any major problems with properties. The compromise would eliminate City inspectors visiting homes, and perhaps delaying the sale, in the process. The new proposal is set to return to the Council in 30 days for further consideration.

A number of Councilmembers — including John Kennedy, Margaret McAustin, and Tyron Hampton — appeared ready to vote to eliminate the program immediately, but Mayor Terry Tornek said in response, “The program is not well-managed, but its objectives are valid. Not efficient, but effective. We should not be looking the other way. If we abandon the program, there will be more bootlegs in the city.”

“The recommendation to the staff tonight seeks to balance the need of the City to ensure a safe housing stock, against the need of the buyer and seller to close the transaction,” said Councilmember Victor Gordo, who crafted the compromise consensus decision.

Continued Gordo, “What it does, is say to the private parties, ‘You are to have the property inspected by an independent third-party inspector, and certify to the City that there are no known life-threatening issues.’ If there are none, then everyone’s happy, and if there are, then the parties are expected to work it out in escrow.

“It’s a little more formalized now,” he continued, “and it also gets the City out of the inspection business,” in effect, eliminating the City’s current point-of sale-inspection ROI program.

Much of the controversy around the ordinance had to do with the idea that the inspections were, in fact, unconstitutional, as Laura Ohlasso, government affairs representative for the Pasadena-Foothills Association of Realtors (PFAR), asserted.

Ohlasso called the inspections a “violation of the Fourth Amendment and an illegal search.”

City Attorney Michelle Bagneris, however, countered that assertion, saying that homeowners could, in fact, refuse the inspection, and the City would then be required to obtain a warrant in order to inspect a home. Bagneris could not recall such an occurrence, however, in her experience with the City.

The Occupancy Inspection Program was first adopted by the City’s then-Board of Directors in 1973. The last significant revisions to the program were approved in 1991.

The majority of cities in Los Angeles County do not require point-of-sale inspections, but 16 of the 88 cities in Los Angeles County require an inspection of some type at the point of sale.

Most cities direct housing inspection resources towards rental stock to ensure property owners are providing tenants safe, well-maintained housing. In lieu of proactively inspecting homes at the point of sale, other cities have opted to shift the onus to the prospective buyer. This is accomplished by requiring a property records report be disclosed to the buyer prior to the sale or transfer of the property, according to the staff report from the Planning and Community Development Department,

The report also noted that the needs need for the program has changed significantly in the past 27 years. New factors include improved conditions of the City’s housing stock, along with changes in the real estate environment, the way code violation complaints are received and addressed, and “material deficiencies in the OIP identified by the California State Auditor’s Office.”

City staff had originally recommended to the Council that the scope of the OIP program be streamlined to direct staff resources to only major violations. The inspection categories would be reduced to just five categories, some of which would allow for self-certification that the violation has been addressed, while others would require re-inspection by the Code Officer.

Major violations would include illegal additions, alterations, conversions and utilized as a habitable space, as well as any unpermitted electrical panel replacement or upgrade, according to the staff report.

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