Renovations without permits can seriously affect both property value and salability.
Youâ€™ve probably seen the ads: â€œGorgeous doll house â€“ totally remodeled â€“ spectacular family room addition.â€ You look at the pictures and, sure enough, it looks awesome! So wonderful that you want to rush over, see it and possibly write an offer before some other lucky person grabs it. And then you notice the fine print, â€œremodeled without permits.â€ What do you do?
My advice? Move on.
As both a professional REALTOR and licensed general contractor, Iâ€™ve encountered many homes with varying degrees of â€œimprovementsâ€ without permits. For whatever reason, some homeowners canâ€™t be bothered to obtain permits to work on their homes. This opens them up to serious liability for violating local municipal codes. â€œThese codes exist to protect homeowners,â€ states Allen Lang, Building Official for Alameda County. Every year, improper installations and renovations cause deaths from fires, carbon monoxide poisoning, structural failure and more.
Even if the seller claims the work was done by a licensed contractor, you have no way of verifying the quality of work once the walls are closed with sheetrock. The only way to know for sure is to pull a building permit, remove large amounts of sheetrock as required and have the home inspected by local building officials. Extensive work may be required to bring the home up to code. Fines may also be applicable.
â€œUnpermitted renovations can be a ticking time bomb,â€ asserts William Schock, Building Official for the City of San Leandro. â€œYou have no way of knowing if the work was done properly. Once the buyer accepts the sellerâ€™s renovations, takes ownership and moves in, they are now completely liable for any code violations by the previous owner. In some cases, the work cannot be brought up to code, and the new homeowner can be faced with the prospect of tearing apart the home they just purchased. There is no grandfather clause for work done without permits. If rooms or structures have been added that do not conform to zoning ordinances, those structures will need to be removed at the buyerâ€™s expense.â€
Our recommendation to sellers: if youâ€™re aware of work done without permits, steps should be taken to get the work permitted and signed off by local building officials BEFORE going on the market. Even if unpermitted work is fully disclosed, it could be a lawsuit waiting to happen. Itâ€™s best to play by the rules so you donâ€™t get burned.