Buying A House With Unpermitted Work: A Complete Guide

When house shopping, you may see homes with significant upgrades or repairs. You want to make sure the work done on the house was permitted. If it wasn’t, know that it can come with significant risks. Here we’ll cover what unpermitted work means, the risks it poses and what to do if you find unpermitted work in a house you want to buy.

What Does Unpermitted Work On A House Mean?

Unpermitted work means any work that was done on a house without pulling proper permits. For most significant additions, local municipalities require paperwork to be filed, a permit to be paid and the work to be inspected after completion. Depending on the type of construction or installation, the local government may require it to be done by a licensed contractor.

Unpermitted work is often done to skirt around ordinances and permits. Applying for a permit comes with a cost, and all work must be done up to a local building code. Houses with unpermitted work have gone under the radar to avoid adhering to local laws and ordinances.

To find whether an addition or renovation has been permitted, start by asking the seller for the permits and the blueprints. If they can’t supply you with these, your next option is to go to the local municipality. You’ll need to look at their records, assuring that the proper permits were filed. You may need to make this trip in person, as many local governments don’t have this info online.

If you suspect a major addition was made to a home you’re buying, it’s important to make sure it was permitted and up to code. The last thing you want is a hazardous house due to a DIYer gone rogue or a contractor cutting some corners.

Should You Buy A House With Unpermitted Work?

Purchasing a house with unpermitted work comes with risk. Ultimately, whether you buy a house with unpermitted work depends on you, the house and the amount of work. For instance, if you find the house you love in the right location, you may be able to look past an unpermitted deck install. However, if there’s an added unpermitted room, the cost to make it right could be prohibitive to buying the house.

What Happens If You Buy A House With Unpermitted Work?

If you decide to buy a house with unpermitted work, things could go sideways. Not only could the work be shoddy or faulty, but you could be held liable if something goes awry. You should be aware of certain situations you could end up in due to unpermitted work before making the decision to buy.

Unpermitted Addition Risks

Here’s a list of things that could happen if unpermitted work is found during or after you buy a house. They’re listed in order of severity, with the least severe first. Note that the likelihood of these happening, as well as potential costs, has a lot to do with the amount of unpermitted work.

You should be aware that an unpermitted addition could lead to any of the following:

• The sale of the home may stall or fall through
• The buyer could be responsible for paying fines due to the unpermitted work
• Homeowners insurance may not cover expenses from damages to unpermitted work
• Mortgage lenders can require immediate loan repayment if you knowingly buy a house with an undisclosed unpermitted addition
• You may be liable for injuries or property damage due to a failure of unpermitted work

As you can see, consciously buying a house with unpermitted work can come with a lot of risk. That makes it important to do your due diligence before closing on a new place.

How To Protect Yourself As A Buyer With Unpermitted Additions

If you’re buying a house there are many things you can do to keep yourself safe from unpermitted additions. Remember that knowledge is power, and as a buyer, you have the ability to bargain with the seller if anything suspicious turns up.

1. Work With A Real Estate Agent

It’s vital to work with an experienced real estate agent when buying a home. Not only will they help you write an offer and negotiate your contract, but they often know how to spot an addition. If they suspect an unpermitted addition, or something turns up on the inspection, an experienced real estate agent will know the right questions to ask. They may even help you get the seller to pay for required permitting.

2. Get A Home Inspection

If your real estate agent doesn’t spot unpermitted work, there’s a good chance a home inspector will. A home inspection is a very important part of the home buying process. Some buyers in competitive markets waive a home inspection in the hopes that their offer may be more likely to get accepted. But this is a terrible idea. If there are major issues with the home, including work that’s not up to building code, the home inspector will be able to catch it.

3. Have The Seller Fix The Problem

Once you’ve had the inspection and something pops up, you can work with your real estate agent to negotiate a solution. If there’s an unpermitted addition to the home, have the seller fix the problem. This could mean they have a city inspector approve the work, pay fines or have the addition redone. If they’re unable or unwilling to fix the problem, you can see if they’ll come down in price. Otherwise, you may need to back out of the sale.

The Bottom Line

Buying a house can be an intense process. But don’t let that cause you to make a bad decision. Buying a home with major unpermitted work is a bad idea. If anything were to happen due to the unpermitted work, chances are that you’d be liable. Knowingly buying a home with an unpermitted addition and not disclosing it to your lender could also lead to you having to repay your mortgage in full.

All of this is why it’s important to work with an experienced real estate agent. Having a pro in your corner will help you find the right house, get an offer accepted and work through the process as things arise. If unpermitted work becomes an issue, they’ll be able to advise you on what to do.

If you’re ready to start your home buying journey, work with an agent partner of Rocket Homes^SM today.