If you are buying the house " AS IS " and your contract states that you are responsible for getting all the necessary approvals, permits and inspections to close then you would typically be required to get COs , permits and pay all inspections. However, if it does not you should definitely request that the seller get the needed permits on any alterations to the house and pay for all required township inspections.Getting a permit is a simple process , does require application and inspection fees and may take several weeks to obtain, especially if the town requires any changes after their inspection so plan ahead of time before you schedule your move
Joan Congilose CRS,GRI, e-Pro
Having more bedrooms definitely has tax implications. If the town doesn't make the owner return the space to a garage (and even, perhaps, pay a fine), they would probably want to charge for the permits that weren't taken out and re-classify your house for tax purposes as having an additional bedroom.
More than likely, however, they'll require the seller restore the space to its original purpose.