Property inspection and repairs policy for BMR Resales

MOHCD requires owners of Below Market Rate (BMR) units to maintain the quality of their BMRs. Owners of BMR units must keep their BMR units in compliance with all applicable laws and regulations. If an owner desires to sell their BMR unit, the owner is required to ensure the BMR unit is in a good and clean condition for the subsequent owner. In addition, all appliances, finishes and fixtures must be fully operable and free of deficiencies or any damage. No BMR units may be sold as-is, and any damage by abnormal or excessive wear and tear or because of neglect, abuse, or insufficient maintenance, must be repaired as a condition of resale, including components that are not damaged but have reached the end of their useful lives have to be replaced.

The Property Inspection and Repairs Policy outlines the obligations of an owner regarding property inspection requirements and policies and procedures for repairs when selling a BMR unit.

To determine a BMR unit’s condition and identify repair needs, MOHCD requires that all of the following property inspection and disclosure documents be submitted as part of the owner’s request for pricing of a BMR unit. Each property inspection document must be dated no earlier than ninety (90) days prior to submission to MOHCD.

• Home/Property Inspection Report which should include but without limitation the electrical system, wiring, heating and air conditioning, insulation, plumbing, window and door operation, and functional condition of appliances and finishes. 
• Agent Visual Inspection Disclosure (California Association of Realtors Form AVID)
• Real Estate Transfer Disclosure Statement (TDS)
• Seller Disclosure Statement (entitled as San Francisco Seller Disclosure)

Damage that must be repaired include but is not limited to:

1. Violations under the San Francisco Building Code either through visual inspection or notice from the City;

2. Defects in electrical system, wiring, heating and air conditioning, insulation, plumbing, and functional condition of finishes.

3. Appearance of toxic substances (such as asbestos, lead, and/or mold);

4. Needed repair to appliances furnished to owner upon purchase of the property;

5. Holes and other defects (except for holes from picture hangers) in walls, ceilings, floors, doors, windows, screens, carpets, countertops and similar appurtenances; and

6. Repairs needed, as determined by MOHCD, to put the property into a good and clean condition, including without limitation cleaning and painting.

In order to document completion of the repairs, owners must submit a written list of each repair and cost along with full documentation, such as after-repair pictures, invoices and receipts. Unless waived by MOHCD, correction of any reported repairs that pose immediate health and safety hazard or San Francisco Building Code violation must be verified with a certificate of completion or clearance report showing that the home is free and clear of such damage or hazard.

Violations or corrections may be referred to MOHCD's Rehabilitation Department for evaluation and program qualification. Please contact MOHCD for more information.

Certain improvements and repairs for the BMR unit that has been occupied for ten (10) or more years may qualify for capital improvement credits. For more information, please see MOHCD’s Capital Improvements Policy.

Tip: to avoid any delay in selling your BMR unit, please follow the attached Home Inspection and Cleaning Checklist (Attachment A) to ensure a smooth selling process.

In the event any repair is noted, MOHCD will deliver written notice to the owner specifying the repairs and requesting the repairs be completed as a condition of resale. The owner must complete the repairs at the owner’s cost prior to listing the BMR unit for sale. In very limited cases, MOHCD may permit the owner to commence the resale process while completing the documented repairing, but all documented repairs must be completed to the satisfaction of MOHCD before closing escrow. For detailed procedures, please view the Property Inspection and Repairs Policy.