Cris, Other/Just Looking in Redwood City, CA

Extra units without permits

Asked by Cris, Redwood City, CA Mon Jan 19, 2009

When a listing says something like, "garage has been converted without permits" or "property has extra units, permits unknown." What does a buyer needs to do in order to be in full compliance? Is it expensive to get the permits? How can you find out how much will it cost before you buy the property?
Can you buy the property and not worry about the permits or is it something that the county is going to find out anyways because of the sale transaction?

Thank you very much,

Help the community by answering this question:


Hi Cris,

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
1 vote Thank Flag Link Mon Jan 19, 2009
Needing to meet today's code. Electrical, mechanical.
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.
0 votes Thank Flag Link Thu Dec 11, 2014
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.
0 votes Thank Flag Link Thu Dec 11, 2014

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.
0 votes Thank Flag Link Mon Jan 19, 2009
This is a great question. Many times with garage conversions you will not have the ability to make it compliant unless you bring it back to its original form. We always advise our clients that a garage conversion does not add value to the property, but it also tends not to be a deal killer since it is very easy to remedy. Just put the cost to convert back, into the price.

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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0 votes Thank Flag Link Mon Jan 19, 2009
If any work is done to a property, you always want to make sure it is currently zoned for the current use (use the owner has modified it for) and if permits were obtained. You may not have a problem come up but what happens when you go to sell the property?
0 votes Thank Flag Link Mon Jan 19, 2009
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