Unpermitted work is construction on a home that does not carry the necessary permits to make it legal per local ordinances or any modifications made to the home that should have been permitted but were not. This can include electrical, plumbing, structural modifications, etc. Most unpermitted work is done without permits to save money and time.
Most owners don’t pull permits so that their assessed real estate value remains low. The property tax assessment will be much lower when the city or county doesn’t know. Just know, this could have long-term consequences.
When an owner decides to sell, they will need to accurately and honestly fill out a seller’s disclosure form in most states. This disclosure gives the buyer information that could influence their purchase decision. All unpermitted work must be disclosed to the buyers.
A city or county inspection by drive by or overhead could show unpermitted work The inspectors could come down hard on homeowners with unpermitted work. They could require the current homeowner to get the work permitted. This can also include costs of an architect, contractor or even having to make changes to meet current codes. Some can even make you tear it down.
A homeowners policy may also not cover the unpermitted additions. If getting a loan, there is a possibility that the lender may not lend on the unpermitted work. If a lender finds out later than you knowingly purchased a home with an unpermitted addition, they could demand full repayment of the loan immediately.
As buyer, what are your options when buying a home with unpermitted work:
- Ask the seller to get permits
- Take the property without permits
- Find Another home to buy
Make sure you investigate thoroughly before purchasing a home. Weight the pros and cons of buying the home. Are you in a position to correct things if requested. Discuss resell with an experience Realtor before you buy. What obstacles may you come across. Be educated.