'A problem': City of Austin has no incentive for sellers to disclose active code violations

KXAN discovered that whether a seller discloses active code violations to a potential buyer is simply an honor system right now.

AUSTIN (KXAN) -- Stephanie Cuestas said she wouldn't have purchased the property her flooring business runs out of now if she had known what was to come. Years later, Cuestas is still fighting a city battle over code violations that stemmed from the previous owner.

"It jeopardizes our business and our livelihood and we’ve been operating and servicing south Austin and west Austin clients for almost 30 years -- so this process is making us question if we can continue," she said.

Cuestas said she was shocked to receive a code violation from the city in 2022, a year after she moved her flooring business to a property near Manchaca Road and Stassney Lane in south Austin.

Turns out, the previous owner had done work that was not up to code -- most notably, adding a room to the building that doesn't meet setback requirements.

Getting that problem fixed has already cost Cuestas tens of thousands of dollars and she's far from finished even years later, she told KXAN.

"It has been a tedious and unfriendly process. Costly and time consuming," Cuesta put it.

Even the City of Austin's Development Services Department will tell you, this isn't just a one off problem. In fact, Robert Alvarado, a code compliance division manager for the south side of town, said they're seeing it happen "more and more."

"They [sellers] have to take that ownership and be a good citizen to do that type of stuff. The City of Austin at this point doesn't have any incentive process for that," Alvarado said.

Which means it's entirely up to you, the buyer, to find active code violations. The city does have online tools for you to do that. The Development Services Department recommends its property profile map, Austin Build + Connect portal and Citizen Connect to look for those violations. You can find them all here.

"One of the best things for someone to do is to take a look at any of these online resources if they have an interest in purchasing property to have a really good knowledge base of what's really going on on their property prior to their purchase," Alvarado said.

But Cuestas doesn't think people know to look -- she didn't and neither did the "more and more" people experiencing this problem. She doesn't think it's enough. Neither does her city council member, Ryan Alter.

"This example shows that there is a problem and even if it's just an occasional problem I want to avoid this for any future Austin resident and so I think it is worthy of us taking that next step," Alter said.

That could mean authoring a resolution in the fall to direct the city to find ways to force bad actors, like the one who sold the property to Cuestas, to disclose potentially costly violations.

That solution may not be within the city itself, Alter said he also thinks the city should look at reaching out to the Austin Board of Realtors, look at possibly making county real estate records more robust and even looking at state rules.

"There should be no property buyer that inherits an existing violation and all the cost to fix the violation and all the city fees that are involved with that violation," Cuestas said.