You can get the city involved, but in most cases they will want to see into the walls. In some cases, if there are photos as the work progressed they may "sign-off" the work and have you/owner pay the fees for a permit. Permits are not that expensive, but they do escalate based on the amount of work being done. You can go to the City and ask for permit cost info. The city dosen't inspect properties during a transaction to see if non-permitted work was done. You can buy the property "as built" and not worry about the permits; however, that doesen't mean your worries are over...
1.) Given the uncertainty of unpermitted work, an appraiser will not be able to place any value on such work. For example, say a Buyer places a $500K offer on a home that has $50K in unpermitted remodeling. In this simple case the appraiser would assign a $450K value, which would require the Buyer to come to the escrow table with an additional $50K as the lender would only provide financing on the appraised value of $450K.
2.) Another issue is that of safety. How can you really know that the work was done properly without tearing into a the walls? You may want to bring in individual trades to confirm how "stable" the electrical, plumbing and basic structure is.
In short, buying a home with unpermitted remodeling is gambling with your financial and potentially your personal safety. With so much supply out there it may be a smarter move to just find a property that does not have such issues.
Best Regards, -Steve
Some cities in South Bay is not difficult to bring it into compliance. In fact the additional sf sometimes
is added in the living sf.
You may have issues with lender getting FHA or low downpayment mortgage.
Building without permits is never a good idea. No NO! As a seller it is a big liability! Buyers are taking the liabilities and the only way to purchase a property that has unpermitted structure is on a cash transaction. Keep in mind that if the City decides to enforce the law. You are to comply! And there is no time limit. I sold one property in South San Francisco and the City informed us that even if the structure was built 30 year or so. They can come in and enforce the law. And request that the property go back to the original structure!
it all depends on the City too and on the way the work was done. there are many factors and in any case is always best to be safe and investigate the cost in many cases the cost of pulling permits is minimum.
The answer depends on what you want to do.
Do you want to keep the "extra units" as income producers for you?
If so, there will no way to "legalize" the extra units if property is in an R1 zone.
Permit cost will not amount ot more than a couple thousand.
Have a contractor look at the property to get a rough esitmate of repair costs.
The county does not ordinarily inspect properties upon sale.
This is a classic risk reward scenario and Trulia Voices is not the best forum to discuss in great detail.
Let me know if I can help.
31 years of experience will prove very helpful to you as you consider your options.
As for any property with code or compliance issues, it is always best to do your due diligence at the building department. Good luck and make sure to investigate thoroughly before you release your inspection contingency.
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