Disclosure Question - No Permit

Asked by Arther Williams, Portland, OR Thu Jan 31, 2013

I have owned a 1920 home in Portland for 9 years that was a real "fixer". I have made numerous updates to it over the years with proper permits
When I bought the home one area of concern was a 12x25 addition that was attached to the back of the home. There was a definitive "slant" to this part of the house. I had the home inspected by a professional recommended to me by my agent. He signed off on the house as being in good shape, but said he could not verify the condition of the "addition" as he could not access this area. (there was an access door under deck)
I bought the home later to find post & pier construction on bare dirt, with extensive dry rot.
This summer I worked with my uncle to tear out all of the supports, jacked the house up, poured a foundation, built a stem wall, added 6 large beams, new support wall, anchors, everything. No permit.
Question: What happens if I fail to disclose? Can I go back on the previous owner for failing to disclose if I am forced to permit now?

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Garett Chadn…, Agent, Gresham, OR
Thu Jan 31, 2013
The down an dirty answer is this: no one gets sued for disclosing too much...only for disclosing too little. Regardless of what the other seller did or did not disclose, you are required to disclose everything you know about the home, even the fact that there were no permits issued for the work you did. The Seller's Property Disclosure asks that very questions (about permits).

You should speak with a competent real estate attorney regarding going back on the previous owner for failure to disclose a material fact. If you would like a referral to one or more real estate attorneys, I would be happy to help.
2 votes
Diane Moreau, , Portland, OR
Thu Jan 31, 2013
There are a couple different issues here. The first is your current situation - unpermitted work. You shouldn't be forced to permit unless a neighbor or other person turns you in for doing unpermitted work. I assume that is unlikely. The only concern for permitting would be if you are going to sell the house. If the area where the work was done is accessible, you could get it inspected and properly permitted. If the work was done to code the cost should be minimal. If you decide to sell, I would suggest getting it inspected and permitted prior to listing. Once a home is listed, Sellers must hire a licensed contractor to do work requiring permits. By law, a Seller is not allowed to perform this type of work on a house involved in a transaction. I do know a person who works with home owners to get permits after the fact. He used to work for City of Portland and is very knowledgable of the process.

Second - previous owner's liability. You can always attempt to sue another person for just about anything. In this situation I don't know that it will do you any good. The previous owner will probably claim they didn't know there was a problem and you would have a difficult time proving what they knew or didn't know 9 years ago. Also, the Residential Sales Agreement that I am assuming you used to write the offer states the Buyer will do their due dilligence to inspect the home completely prior to purchasing. You could take a look at the Property Disclosures the previous Owner should have provided to you when you purchased. If this area was addressed and the Seller indicated something that he knowingly knew was untrue (your burden of proof) then you might have a case. Even at that, since you have already corrected the problem it might be difficult to go after them unless you have photos and documentation.

That said - if you are considering Selling this is a great time. Inventory is low and Buyers are eager to purchase. I'm happy to talk with regarding the possibility of selling and/or connecting you with the Permit Guy who can help you thru that process.

1 vote
Melina Tomson, Agent, Salem, OR
Thu Jan 31, 2013
No one here can give you legal advice, which is what you are asking for. I believe it is three years from the time you discover the defect to take legal action. A local real estate attorney can verify that. I know there is a time limit.

Since you poured a foundation you would be required to get a permit anyway. You did structural work. Since the area was inaccessible it is very reasonable the previous owner was unaware that it was pier and post. What are you wanting to have the previous owner be responsible for? If you fail to disclose the new owner can seek damages if they discover your fraudulent omission after they take ownership.
1 vote
Let's say I choose to disclose. I'm assuming the prospective buyer will want to have the proper permits paid for and have the city inspect the job. A: I will be responsible for paying the permit fee (no big deal) B: If for whatever reason, the inspector finds what he deems flaws, mistakes, etc...I will be required to fox those. I've heard of homeowners having to "rip out" something they fix and do it over. That would ruin me financially I fear.
Flag Thu Jan 31, 2013
Janice Pesta…, Agent, Portland, OR
Tue Mar 31, 2015
I highly recommend that you get it permitted. Chances are if everything is accessible to the inspector and done properly it will pass muster and they will provide you with the permit. I would never recommend being dishonest on the disclosures. It sounds like the first seller sold the home as a fixer, and you bought it with the awareness that there were some concerns with the "addition".

The market is great, and buyers are savvy. It is well worth the small expense of getting it permitted so that you have no issues down the road.
Let me know if you have any more questions.
0 votes
Tom Inglesby, Agent, Portland, OR
Tue May 7, 2013
Lenders are getting tough on homes that show major new work with out permits and I have heard of homes getting turned down also fire insurance is starting to become an issue. With doing what you did why didn't you get a permit it costs money and it will in the end raise your taxes but you are not going to live there? Go get a permit many times you can get a permit if the work looks like it was done correctly. Disclose everything you know as they have said before. Good luck to you. Tom Inglesby, Broker RE/MAX
0 votes
oregonreohom…, Home Buyer, Portland, OR
Thu Jan 31, 2013
Sometimes if it''s done in a workman like order banks will not force you to get permits. Buyers can get permits after closing or sellers can also. Maybe this is more of a legal question and seeking the advice of an attorney is my recommendation.
0 votes
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