If you did the work....
depending on the inspector, treat him good he's the one that post the fine or adjust it from only a few bucks up to about $500.00
DON'T USE IGNORANCE OF THE LAW THAT YOU DID NOT KNOW YOU NEEDED A PERMIT IT WILL ONLY ANGER HIM, AND THAT IS A LINE THEY HEAR ALL DAY LONG. IT RANKS UP THERE TO I ONLY HAD TWO BEERS OFFICER.
Were you cited??????
1- If so then be honest. and apologize, do not try to BS THEM in any manner.
2- if you were not cited go to the B&S tell them you want to pay for a garage conversion permit and request an immediate inspection that you want to know what it will take to bring it up to code.
I would not tell them what you did at first, or give your adress because they may make you tear it all down.
It is easy to do a garage conversion for a rec room, the inspector will probably fine you $400.00 take out a permit and have you make some small holes to see the framing and insulation, etc. unless it was done by the Three Stooges I would not worry too much we do this kind repair all the time.
If the improvements are substantial in cost and time, it could be a significant loss of value, like a room addition.
If the garage can be returned to it's original status, without major demo, it will not damage the rest of the property value. If not, not only will you lose the contributory value, but you could incur a reduction in value of the rest of the improvements.
Permitting penalties vary from jurisdiction to jurisdiction, some agencies get vindicative.
Good luck and let me know if you have any questions.
Keller Williams Realty
Understand that permits are required because when you change the livable square footage the taxes change, that is besides the health and safety issues of construction methods and materials. When you sell you can't legally claim that finished garage as part of the square footage because it isn't permitted and the problem may turn away prospective buyers.