Haha, that's classic, carpetbaggertil718!

That's great!

It usually varies by cultural and ethnic values. Persons of Asian Indian/Pakistani descent will often restrict the occuancy of a basement to 3 occupants per mattress with each mattress afforded a level of privacy that would rival that of a five star Emergency Room, often through the creative use of old shower curtains or bed sheets. Sociologists believe that the group of 3 is the result of their employment in all night 7/11s so that one person may rest while the others work and attend prayer services etc. However the number of mattresses is only restricted by the square footage of said basement. If theres a spot on the floor you can be sure theres another mattress. Moving on.
People hailing from central and south American countries have no restrictions on occupancy and are far more industrious, often partitioning off seperate living quarters with plywood walls and sometimes actual doors. Noone is sure of the procurement process for these building materials and these accomidations can be a bit tricky to navigate leaving you feeling like a mouse in a high school science experiment. I understand the Fire department has an especially strong dislike for these structures. I've personally witnessed 27 people residing in a 600 sq.ft. cellar and they couldn't have been happier, drinking traditional beverages and singing and dancing until the wee hours of the morning. I swear there was a maternity ward in there but one of the village elders told me that it was just an altar used for religious ceremonies. The chicken bones arranged in peculiar patterns on the altar looked suspicious but hey this is America right. Freedom baby, it's a beautiful thing. Live and let live. Peace to all.

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And doesn't the landlord have to pay back the tenant all the rent as well ?

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Bingo !

A couple years ago my friend was living in an illegal basement apartment. He did not know it was illegal and got kicked out of the apartment because somone reported it as an illegal apartment. The guy had to leave the apartment in a couple days. The owner of the building got fined $10K for having an illegal apartment.

If you are purchasing this house ask your real estate agent if the apartment is legal. I may be wrong but the tax records should indicate what kind of property this is. A quick rule of thumb is to count the electric or gas meters as the property should have one meter for each unit. The only issue here is that sometimes people install a meter for common utilities so this may not be 100% accurate in determining how many legal units there are but its a good rule of thumb for quick analysis.

It's illegal because you do not have adequate egress in case of a fire. If there is a fire and someone dies you will most likely be serving jail time.

Banks will not lend to you with illegal apartments unless the appraiser overlooks it but I wouldn't hold my breath since the implementation of HVCC aka the Home Value Code of Conduct.

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It becomes a problem if the tenant applies for the Homestead Rebate for renters. I have had landlords in the past who explicitly asked that I not apply for the rebate for this reason.

The problem with illegal apartments is that some have been getting the wink from JC for a looooong time. As was noted recently when the mayor was contemplating legalizing the ones that could be legal and putting them on the tax rolls, there are thousands of them. There's tons of listings for 2 & 3 families with a "bonus" apt. Apparently some banks will count the rent as income when weighing a mortgage, and some won't. Maybe some of that has changed recently....

Who do you call to report illegal apartments here in Jersey City? Zoning dept?

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What, exactly, would the tenant be reporting on their taxes?

It's illegal here in Jersey City unless it is approved by the Housing Code Authority (201) 547-4825. If you illegaly rent it out and the tenants report in on their taxes you can be discovered and will have to pay back all the rent they gave you. Plus a lot of time and costs in the court room.

There's 2 issues present here.

1st, whether the space is a basement or a cellar. A basement is more than 50% above curb level and can be habitable as an apartment with not much other requirements other than the usual that apply to any space like windows in the bedrooms. A cellar can never be a legal apartment.

2nd is whether he's running a rooming house. There are regulations about that. Shading whether it's a roommate situation or a rooming house is the trick I guess.

Unless that business has a high stoop to it I'm guessing the basement is totally illegal. And if it's downtown, probably pretty damp.

From NYC, but likely most applies http://www.nyc.gov/html/hpd/html/owners/illegal-conversions.shtml

The building currently is split with business on the street level and two apartments on top.. The current owner occupies one section and the other is rented out.. They also rented out the basement and have 3 people living there now. My understanding is you can rent out the basement to one person as per super for the building.. I can be wrong

none, unless you - the homeowner- are living there as an extension of your apartment on another floor (i believe). for example, i dont know if it's legal for you to just occupy the basement and rent out the top 2 floors, but it should be legal for you to live on the 1st fl and the basement.

If it?s a 2 family home and has a basement which is split into 3 bedrooms. Can you rent out all 3 rooms or does Jersey City permit one tenant?