Sadly, it isn’t uncommon to come across properties that, over the years, have work done without proper City or County building permits. Older homes that have had multiple owners lose the history of what has been done and when, so getting to the “real” facts about additions, changes, etc. becomes very difficult. And shudder to think, government records aren’t always accurate either! Even though an owner may think they got their worked signed off by the City or County, the jurisdiction has no record of it! Common improvements done without permits that we have seen in our years of real estate sales:
- Garage conversions
- Garage bathrooms
- Patio/sun room enclosures
- Electrical work (both indoor and outdoor)
- Window installations
- Hot water heaters
- Attic access improperly made
- Second dwelling units
So, what to do….
HOMEOWNERS: Please comply with your local building regulations regarding modifications to your home. If you want to ensure the work is done properly and up to code, hire a licensed contractor who knows what they are doing and acquires the appropriate permits and inspections. Ensure the permits are “finaled” meaning that they get the final sign off by the appropriate jurisdiction. Then and only then can you represent to a future buyer that the work was done with permits! Work done without permits must be disclosed to any potential buyers, and the value of your property can be severely impacted by not having work done to code. In some cases insurability may be impacted, as well as a property appraisal for a potential buyer’s lender.
Bottom line: get the necessary permits, use a licensed contractor, and add value to your property, not diminish it.
BUYERS: So, you see that dream house, with that added family room (used to be the back patio sunroom) and 1/2 bathroom in the garage…but were these building modifications done with permits? The Seller is required to disclose what they know about a property, but perhaps they bought the property with those “improvements” already there, so they don’t the status of any permits. We assist our Buyer clients in researching such matters at the appropriate governmental agency. If work has not been done with the necessary building permits, it may have been done unsafely. Worse yet, if the work results in some sort of other governmental code violation (such as a garage conversion), a Buyer may later be required to tear out the improvements either permanently or have them redone with permits. Both of these scenarios can be very expensive. Finally, a Buyer’s lender may not accept square footage that was added without building permits and where the public record does not reflect the additional square footage in the County Assessor’s tax records. With square footage excluded from an appraisal, the available loan amount may be severely impacted and the Buyer unable to finance the purchase.
Bottom line: review thoroughly all disclosures available regarding the property. If there is ANY discrepancy in the square footage being represented and the County Assessor official records, get to the bottom of it by checking on issued building permits. Have a general property inspection done to determine the overall safety and quality and condition of the property. Unfortunately, in this very hot real estate market, there are property investors/flippers that cut corners to get the property back on the market to make top dollar. Be wary, check the disclosures and the quality of the work that’s been done. As they say, you can’t judge a book by its cover: investigate the property thoroughly or risk years of disappointment.
So YIKES…be careful when a property has non-permitted improvements: for your own safety and physical and financial well being!