There is a lot more to this than the City finding out that you have unpermitted additions.
Here's some food for thought on unpermitted additions/construction.
Additions that have not been properly permitted have also, most likely, not been properly inspected to ensure the addition was built to local codes and requirements. Additionally the homes size (square footage) has been changed and not properly reported to local property tax authorities. If the mortgage company does not discover this through the appraisal process then the insurance company might. If neither catches the "illegal additions" and the mortgage does complete these are the possibilities at a later date:
1. If you ever experience a claim on the home with your insurance carrier, especially if it deals with the illegal addition, then your insurance carrier may refuse to cover the claim as the home has had improperly permitted additions, changes, modifications to it.
2. If the local taxing authority discovers the changes and determines when they were made they might assess you retroactively for the amount of taxes, penalties and interest they could have collected.
3. If the local building department discovers the illegal additions (the taxing authority will advise them if they find it) then you may be subject to penalties, potentially have to remove it or at least parts of it for inspections, etc., etc.
4. If in the future your mortgage company discovers that you have illegal additions, and that you were aware of them, they might also have methods of redress to prevent any issues with the loan such as prematurely calling in your loan with an immediate payoff demand. The mortgage company is not going to want to expose themselves to potential future liabilities and have many avenues of redress to prevent them of which this is one.
5. If the illegal additions violate local zoning ordinances, setback requirements and/or extends onto your neighborâ€™s property then your title insurance company is most likely not going to cover this situation either. It can result in you bearing the full cost of rectifying the problem.
6. If your illegal addition causes your neighbors any problems, or your relationships with your neighbors sour, then they can "drop a dime" on you to the local building department and get the ball rolling for any/all of the above to occur.
7. If you are lucky to not experience any of the above and try to sell the home later it may then be discovered and cause you significant grief in the sales process. First off you know it is an illegal addition and will have to disclose that. Even if you don't and the new buyer discovers it prior to closing and backs out you now cannot avoid disclosure. Also when it is discovered any of the above actions can again be started.
If you know or suspect a home has illegal additions to it then you should perform additional due diligence before your option period expires. It is a simple thing to visit the local building department and check the history of the home for its original build size and ANY permits that may have been requested for additions, major upgrades, modifications, etc.
Sellers are required to disclose these things but Seller Agents are not required to research a home to make sure the seller tells them the truth.
The onus of performing due diligence and its consequences is solely on the buyer. Your agent will assist you where he/she legally can but ultimately it will be your call.
Then again, like Ron pointed out, who's going to tell the city? The most likely time anybody would do that is right now, when the house is on the market and others, like you, know about the non-permitted changes. If there's any lingering concern, have your Realtor pull up some comps of homes without the non-permitted additions and adjust your offer accordingly.
Just kidding. We live and work in Whittier. It's an old town and many of the properties have extra, un-permitted rooms. If the addition was done in a workman-like manner, and it is not a danger to yourself or your neighbors you should be fine. However, if a neighbor complains and a city inspector comes out you may have to tear it down or bring it up to current building codes.
In any case, remember that a bank will not loan on the un-permitted square footage of the house. If the addition was done well and is livable, you're basically getting more living space for a lot less.
You will be required to disclose anything you know about the home when you decide to sell. If you are comfortable with the quality of the work, your perspective buyers may not be. I've heard of cities finding out about situations like this and requiring the current owner to pay for permits and bringing the work up to current standards.
if the city finds out you may have to get it inspected and will have to make sure it passes code,
if not worst case they can make you tear it down,
so factor that in when making an offer,
I would be happy to work you. Please feel free to contact me anytime
if you have questions.
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
The Investor's Broker
It may or may not be a problem pruchasing a home with an unpermitted addition. You just need to understand what that might mean to you in the future, when you go to sell the home or possibly refiance it.
Again, the Tax Assessot infor will be the most accurate. Go do your investigations and descover what is on record and what you are getting yourself into.
Fell free to shoot me an email or call me at 714-747-1912 and I can explain in detial. I am an experienced investor and Realtor.
Second Q: How's the quality of work?
Third Q: Do you think was done up to Code?
Assuming that you answered: "Long Time", "Good", and "Probably", then I would ask:
Fourth Q: Who's going to tell the County?
Assuming that 1 thru 3 were negative: I wouldn't purchase the house; it could be a Pandora's Box.
Good luck and may God bless