Here's a blog post I wrote earlier this year on the subject:
The Ins & Outs of Unwarranted Rooms, Repairs & Remodels
Bottom line is that you want to do thorough inspections on any property you consider purchasing and go from there.
Paragon Real Estate Group
CA DRE 01844627
From my experience, and having seen a lot of unwarranted units...its very rare the city or county will ask you to tear it down. However, that's not to say it has not happened. If you plan to rent it, you run many many risks, too many to count here so best advice is to keep everything legal.
Unwarranted rooms are not a problem if the house isn't going to be used as a rental, howver, if that is the intent, then you run a risk of getting cited and fined and required to correct or remove the unwarranted room(s).
In my view there are two main issues with unwarranted space:
1. Someone complains/notifies the building department, then an inspector comes out and forces you to remove the unwarranted work, permit it retroactively, and/or fines you. Keep in mind that even if the work was done to code when it was done, albeit without permits, codes change so it may not be up to current codes.
2. It will likely hurt you on resale as most people will not value the space the same as warranted space, unless your broker has negotiated the price accordingly.
In the end, I think you have to evaluate each property on its own merits. I have personally bought and sold a number of buildings for my own account in addition to ones for clients and have extensive experience dealing with the building department and unwarranted space. If you'd like to talk about how to approach this contact info is below.
Lance King/Owner-Managing Broker
What do you value, living space, location, condition, permitted work, etc
Problems arise when you are not
properly informed and making decision not based on the facts.
Home values are likely discounted
when living space is added without permit. Based on your needs, values
and price point you may be very happy
with a property partially improved without permits. As long as you are informed and possess clarity of your values, the decision to buy or pass becomes easy
If the unit is vacant you can hire a contractor to pull a permit to remove the illegal part of unit. You will incur a cost to have floor plans drawn in addition to the cost of the contractor. If there is no internal access between the house and the unit you will most likely be required to remove the shower or bath tub, the kitchen stove will need to be removed and in some cases you might have to remove the kitchen sink and install a smaller bar sink. There are many other variables dependent on the property.
Please let me know if I can help you with you search.