When is a three-family house a one-family home? When it’s a one-family house with three residential units. Get it?

This real estate riddle is frequently played out in the New York metro area where one or more illegal apartments are created in a house to help the property owners generate income from their home. The problem comes when that homeowner/landlord attempts to sell their illegally divided house with or without tenants. Banks don’t make loans to buyers of houses when an appraiser’s report description does not conform to the property’s legal status.

What defines an illegal unit? Another kitchen with a working stove is the “tell” even though there are certain situations where an appraiser will accept two kitchens in a one-family house. But three kitchens in a legal single-family home are pushing it; I’ve had one of those. Four kitchens in a legal two-family house are pushing it exponentially; I’ve seen one of those.

The solution involves removing the offending kitchen(s). This needn’t mean major renovation. Usually the removal of a stove and capping of the gas line will do the trick. Think of it not as loosing a kitchen, but gaining a wet bar – and there are no restrictions on that.

You can’t make this stuff up.