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Homeowners often do work without permits to save money. However, this can end up costing more in the long run. For example, one couple that had outgrown their home hired a contractor to do a major addition that virtually doubled the size of the house. To save on the permit application fees, the homeowners asked the contractor to skip the permit process.
Later, when the home was sold, the appraiser for the buyer’s lender refused to give full value to the addition because the work was done without permits. To save the sale transaction, the sellers had to apply for permits after the fact, which meant paying penalties in addition to the permit application fees. HOUSE HUNTING TIP: You may have to visit the municipal building or planning department to search the permit record of a home you want to buy. But, even though this takes time, it should be included in your due diligence investigations of the property. It’s particularly important to check the permit history if you’re buying a property that’s advertised as having a rental unit that generates income. If you find out later that the rental unit wasn’t done with permits and in compliance with building code requirements, you might lose an income stream that you were depending on. |
If you’re buying a home that has been remodeled over time, there’s a good chance that some of the work was done without permits. It’s a good idea to ask sellers if all work was done with permits.
However, in some cases, the sellers may not be aware that work was done without permits. Sometimes contractors don’t take out permits to save time. So, it’s important to check this. Before you buy a home where work was been done without permits, make sure you understand what the future consequences might be. If you search the permit record during your inspection contingency time period, there’s an opportunity to negotiate a satisfactory resolution to permit issues before you close. THE CLOSING: Otherwise, you may be stuck with fixing a problem at your own expense. Dian Hymer is author of “House Hunting: The Take-Along Workbook for Home Buyers,” and “Starting Out: The Complete Home Buyer’s Guide,” Chronicle Books. |
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