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Penalties For Not Getting A Building Permit All Locations : Nationwide Real Estate Advice

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Showing results for Penalties For Not Getting A Building Permit [Clear search]
Mon Apr 14, 2014
William M "Mack" Perry answered:
Anon you question should not be how many, but what percentage of properties they list do they sell?
0 votes 51 answers Share Flag
Fri Oct 2, 2009
Roland Barcos answered:
Hi Homebuyer9,
There are a number of risks in buying a home with unpermitted additions or renovations. At the least, there could be fees and penalties to bring the home into compliance and in some cases the county can force the addition to be demolished. Another risk is that a lender may deny financing if this is disclosed to them. Even if none of those things affect you and you buy the home, it will affect the value and your ability to sell it in the future. I would encourage you to engage the services of a professional Realtor to assist and advise you in any transaction.

Good luck,
Roland
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0 votes 7 answers Share Flag
Tue Apr 10, 2012
Pacita Dimacali answered:
It is always a big issue whenever work is done without permits.

And yes, the onus is upon the buyer to do due diligence and research the property.

There have been several questions and blogs about the dangers in buying a home that had work done without permit. Of paramount importance is knowing the work was done according to cod because of safety and hazard issues.

During home inspections, we've seen where some remodeling was done in kitchens, new appliances were installed without upgrading the electric, or they were wired wrong --- just think of electric fires, gas leaks, etc.

Structurally, if a wall was installed, or a room was built out without permits, how confident would you be that the the roof won't fall in, that the wall will stay up, etc.

Regardless of whether or not the work was done before the current owner bought it, it was their decision to buy at that time. Don't make the same mistake this time.
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0 votes 9 answers Share Flag
Mon Aug 3, 2009
Nicholas Welsh, Realtor in NJ answered:
I doubt that the bank would be aware of the history of work done to the house (unless that type of look back is normal in your market). The appraisal therefore should be based on what the house is worth today. Your local township building department is another matter. Depending on their policies and the type of records they keep there may well be penalties (at minimum) to pay for the unpermitted work. Check what the policies are of your local building department before you make any offer, including who is responsible for any penalties etc. ... more
0 votes 7 answers Share Flag
Sat Aug 15, 2009
Lance King answered:
Rick,

Based upon your rendition of the situation, it sounds like it could be classified as a roommate situation, but you want to make sure that you don't inadvertently do something that could cause you trouble later. You should check with an attorney before doing it and to make sure your lease is written properly. We can recommend some good ones with expertise in this area.

Best Regards,

Lance King/Managing Broker
415.722.5549
lance@fixedrateproperties.com
... more
0 votes 9 answers Share Flag
Tue Jun 26, 2012
Rob Saxe answered:
Hmm..can you legally breach the contract? I cannot advise you there as I'm a Realtor not an attorney. However, if I had a client in your position in my market, I would create an addendum to rectify the condition per city or township ordinances or cancel the sale. In addition, I would have them get a repair permit if permits were actually required if you did decide to go ahead and purchase.
Could you renegotiate the price based on this condition? You could renegotiate the price with any condition at any time. If you really like the house and the backyard, try to see past your emotions, get realistic and see that even if they don't rectify it that you could do it yourself at minimal cost to you.
I would probably, if I were to advise my clients to go that route, to get a credit back for the amount it would cost to make the backyard and deck comply with ordinances.
Hope that helps!
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0 votes 8 answers Share Flag
Sun Mar 29, 2009
Emmanuel Scanlan answered:
Hello jmb,

You might have trouble insuring the home to begin with if there are unpermitted additions. I would first speak honestly with your insurance agent and ask them.

I would think that another large concern would be your loan and title insurance in the event they (mortgage provider and title company) discovered there are additions not properly permitted. If the permits were not obtained and correctly executed (including approriate inspections by the Authority Having Jurisdiction) then your Certificate Of Occupancy for the home could be in jeopardy. If you were able to make it past the insurance company, mortgage provider, title company and the AHJ controlling permits, then you could potentially run into costly issues down the road once it is all discovered.

If you are interested in the home I would at least perform the following checks:

1. Speak with your insurance agent and see if they will even insure the home

2. Speak with the local AHJ that issues permits for additions. Ask them what would need to be done to correct the lack of permits.

3. Speak to the local property tax office. Ask them if you would be responsible for any back taxes and penalties from an addition that was made prior to your purchase and not properly permitted.

4. Speak with a title company and ask what they would require in the form of documentation to provide a valid title policy.

Good luck!

Emmanuel J. Scanlan
PS Inspection & Property Services LLC http://www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
... more
0 votes 2 answers Share Flag
Sun Mar 29, 2009
Emmanuel Scanlan answered:
Hello jmb,

You might have trouble insuring the home to begin with if there are unpermitted additions. I would first speak honestly with your insurance agent and ask them.

I would think that another large concern would be your loan and title insurance in the event they (mortgage provider and title company) discovered there are additions not properly permitted. If the permits were not obtained and correctly executed (including approriate inspections by the Authority Having Jurisdiction) then your Certificate Of Occupancy for the home could be in jeopardy. If you were able to make it past the insurance company, mortgage provider, title company and the AHJ controlling permits, then you could potentially run into costly issues down the road once it is all discovered.

If you are interested in the home I would at least perform the following checks:

1. Speak with your insurance agent and see if they will even insure the home

2. Speak with the local AHJ that issues permits for additions. Ask them what would need to be done to correct the lack of permits.

3. Speak to the local property tax office. Ask them if you would be responsible for any back taxes and penalties from an addition that was made prior to your purchase and not properly permitted.

4. Speak with a title company and ask what they would require in the form of documentation to provide a valid title policy.

Good luck!

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
www.psinspection.com
214-418-4366 (cell)
TREC License # 7593
International Code Council, Residential Combination Inspector #5247015-R5 (Electrical, Mechanical, Plumbing and Building)
Texas Residential Construction Commission, Third Party Warranty Inspector #1593
Texas Residential Construction Commission, Inspector, County Inspection Program
Texas Department Of Insurance, VIP Inspector # 08507061016
Hayman Residential Engineering Services, Field Technician
CMC Energy - Certified Energy Auditor

Knowledge is power, but sharing knowledge brings peace!!
... more
0 votes 1 answer Share Flag
Tue Jul 14, 2015
William Leigh Holt answered:
David: Any home construction requiring permits REQUIRES PERMITS. If the Municipal authority discovers that work has been done without approval, perhaps during the CO inspection or at some subsquent time, there will be only two alternitives: One: Tear it out Two: Get all the inspections done, which may include tearing out major portions to see things such as plumbing and wiring behind walls. It will also entail paying the permit fees, which are usually based on current construction costs.

Bottom line: No permit, no purchase.
... more
0 votes 11 answers Share Flag
Mon Feb 9, 2015
Jaira (Ventura County Realtor) answered:
The reason building a new home can initially seem so complicated is because there are so many details that you have to put together. Here are the things you will need.

Steps 1. Buy land if you don't already own some. You will need to either pay cash for the land, get a land loan from a bank, buy land from the seller with owner financing, or find a seller willing to wait for you to get house plans a building permit and a realtor willing to wait months for their commission (highly unlikely). Buying the land with a land loan first allows you to take the land off the market so others cannot buy it before you do. It also allows you plenty of time to pick out house plans, submit the plans to the county for approval and obtain a building permit all while obtaining the best construction loan. Construction loans can include the land into the construction loan only if you already own the land with a land balance to add into the construction loan.
Pick out a house plan. There are some great house plan resources on the internet. Just go to Google and type in "house plans" or "architect" for your local area and you will have more sources than you can handle. Once you pick out a house plan that fits your needs and expected budget, simply buy a few sets and start getting estimated bids from builders.
Decide whether to hire a builder or be an owner-builder. The goal of being an owner builder is mainly to save money. Some people can save quite a bit of money if done correctly. However, some people are not meant to be owner-builders, as it takes a strong personality to manage contractors. Possible problems when acting as owner builder:
Construction cost overruns
The best banks with the best rates require a builder or supervisor
Managing contractors to finish on time or to show up for work
Depleting your personal savings
The need to borrow more money
Loan extension penalties
Being taken by unscrupulous contractors
The need to refinance your construction loan
Foreclosure.

If you have never built a home before and absolutely need to act as owner-builder, hire a reputable builder to supervise you and the building of your new home, for a much smaller fee than their normal fee. The builder/supervisor will help you with the cost breakdown and manage the subcontracting on an as needed basis. If one of your contractors gets out of hand or you need help of any kind, you can call the supervisor for assistance.
If you decide on hiring a builder to do everything, make sure you hire a reputable builder or supervisor with a good reputation and plenty of references. Ask your friends if they know of good builders, and when you start to hear the same name over and over you know you've found a good one. Ask the building inspector for a list of reputable builders. The most important point is shop around until you find a builder with the most reputable and honest background.
Know what goes into the Estimated Cost Breakdown of your home. This is the breakdown of each particular cost of construction of the home. The foundation, lumber, framing, plumbing, heating, electrical, painting, and builder's profit, etc. The builder usually completes this form to show you exactly what it will cost to build your new home. The most important thing to remember here is that you do not want to underbid any line item and you do not want to overbid any line item. You want accurate numbers from real bids (not guesses) and a 5% contingency for cost overruns. Most banks add a 5% contingency over and above the builder's contingency for added protection. Good builders will send out the house plans to their contractors for specific bidding on each main item or can estimate the home themselves. The builder will send one set of plans to the foundation contractor, one set of plans to the framer, one set of plans to the plumber, etc, etc. When all the numbers come in, the builder will fill out the cost breakdown and come up with a total cost to build your new home. Bad builders will use a method of estimating the cost of building your new home. The WAG method stands for "Wild A. Guesses". This method is the most dangerous since it can lead to under and over bidding. The last method of bidding is simply to over inflate every single line item on the cost breakdown. This is the most profitable method for the builder and the most expensive to the customer. This is why you want to find an honest, reputable builder with a good reputation in your community. Once the cost breakdown is completed and you plan on hiring this builder to build you new home you will need to type up a contract. The contract needs to equal the added total of the cost breakdown.
Read the contract carefully. There are two types of contracts:
Fixed Contract: This contract is simple and straightforward. Take the total of the cost breakdown and put that fixed number into the contract. Continued...
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