Home Buying in Sunnyvale>Question Details

Xyz, Home Buyer in Sunnyvale, CA

What happens if a home has un-permitted built area?

Asked by Xyz, Sunnyvale, CA Wed Aug 27, 2008

We are about to make an offer on a property that has 1/2 bathroom with no city permits on it.
Also, the sq footage /built area shows up in city records, but the city does not have any documentation of this sq. footage.
My question is:
1) What action can city take for the un-permitted bathroom?
2) What action can the city take , if there is no documents available on the city record?
3) Is it possible to get a letter from city officials about the above, before making an offer, that they will not red flag or tear down the property? The house is in bay area.
The seller agent has put these as the condition in our contract, that we the buyer are aware of un permitted bathroom built and also that the city records show the built area, but has no documents.
4) Can the city red flag this property?

Thanks

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BEST ANSWER
Xyz,

The reason the agent and seller disclosed the fact that the bath is non-permitted is it directly effects the value and usability of the home. In essence, you are paying for a 1/2 bath that legally doesn't exist. It is possible that there is a possibility with the e-permit information (assuming you're buying in Sunnyvale). So I would go to the building department and ask for a copy of the permits. If the city can't find them, I would then look to the construction of the 1/2 bath. Does it look like it was done correctly (check with the property inspector (and his/her report). If the construction is good and appears to be code complying, then I would try to get a permit retroactively through the city, but do not close escrow until you receive the permit and have verifed that it has been signed-off.

Can the city make you take out the bathroom or rebuild it to current building code? Yes, Are they likely to do it? Who knows. The city would need to be made aware of the situation.
If the home was damaged (fire, earthquake etc.) it is highly likely your insurance company would not pay to have the half bath rebuilt (remember it isn't legally there). To take it one step further...let's say you buy the house , then down the line, you move and rent it out. If something were to happen to the tenants because the 1/2 bath wasn't constructed correctly (ie.bad wiring), you just increased your liability 10-fold.
I would talk to your agent and get their take on it (and if they say its no big deal...fire him/her). I would also talk to a real estate attorney should you wish to proceed.
Solution, put a contingency in the offer stipulating that the seller get the permit on the bathroom or credit you back XXXX amount for you doing the same. Note: if the seller is smart, they will give you money as a credit versus trying to get the work done because once they start tearing things apart, the work can get more expensive. Good luck.
1 vote Thank Flag Link Tue Sep 2, 2008
Usually your home casualty insurance will not replace that portion of your home. The city that the property is in might force you to upgrade the unpermited portion of the home. Usually the city finds out about it when some one or a neighbor reports to them that you have some unpermitted rooms.

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1 vote Thank Flag Link Sun Aug 31, 2008
It really isn't that unusual for a home to have had work done without the correct permits. Since the lack of permits affect the value, taxes, and insurance coverage on the property, the seller should correct this prior to selling the home. That doesn't mean you shouldn't buy the home if you really like it and it suits you. However, you should not buy it until the situation is corrected.
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0 votes Thank Flag Link Fri Dec 12, 2008
Xyz,

It is not difficult to get a permit (especially in Sunnyvale), but it does trigger a re-assessment of the property for tax purposes. Also, sometimes the contractor (handyman) who did the remodel doesn't pull permits on the work being done. The homeowner thinks that the work has been permitted, but it hasn't. Lastly, homeowners look to cheap solutions, versus what makes sense in the long run.
0 votes Thank Flag Link Fri Dec 12, 2008
Thanks for all the responses. We finally withdrew the offer. Seller/seller agent were not ready for any city official notification and we really did not want to take a chance with our money.
I wonder, why people make additions to the house, with no legal permits. Is it that difficult to get permits??? I see on campbell, santa clara city websites and it looks very easy to get the permits - so why would anyone go for non-permitted addition and take such a risk?

Thanks.
0 votes Thank Flag Link Wed Dec 10, 2008
XYZ,

This is an issue best referred to the city/town code enforcement office. They will be able to provide the direction you require.
0 votes Thank Flag Link Tue Sep 2, 2008
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