4 Things to Do After Discovering Unpermitted Work as a Home Seller

Posted by Lauren Schneider on Tuesday, April 27th, 2021 at 10:20am.

What to Know About Remediating Unpermitted Work Before You SellMunicipalities require homeowners to obtain permits for certain home improvement projects. Sometimes, homeowners go ahead without securing permits, only to realize they must take significant remediation steps when it comes time to sell. Others may have purchased their homes years ago without realizing previous owners hadn't secured permits. Homeowners should always disclose unpermitted work, but unfortunately, this isn't always the case.

Not all unpermitted work is bad. However, permit requirements are in place for a reason, and some improvements might not be up to safety codes. Homeowners who find unpermitted work must typically take steps to resolve the problem(s) before they can sell their properties. Here are four things to do after discovering unpermitted work in the home.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

Document the Details of the Home Upgrades

To start, homeowners should look at the original blueprints and evaluate any upgrades performed since the home was built. If blueprints aren't available, homeowners should check with their city or county and ask for a copy on file. Next, do a public search for any permits issued for the property. If there are no records, then the upgrades were likely unpermitted.

Over the years, safety codes or legal requirements change. Even if a permit was secured under older standards, it must be documented. If records aren't saved, this could result in problems if a homeowner cannot prove the work was done when it was legal.

Look Up Current Building Permit Laws

Learning current laws can shed some light on the home improvements to see if they were installed or built up to current standards. If work looks like it wasn't done legally, homeowners may want to pursue a retroactive permit. If the work was done correctly and up to code, inspectors may grant one. On the other hand, if the work is determined to be subpar and/or a safety hazard, more significant remediation steps will likely be necessary.

Bring Unpermitted Upgrades Up to Date

Depending on the renovation or upgrade, the best thing to do might be to hire an architect, get properly permitted, and perform remediation to legalize the situation. This can get costly, but it's usually worth the investment in the long run rather than risk fines, penalties, and back taxes.

Other Remediation Options for Unpermitted Work

Homeowners who don't want to bear the responsibility of fixing work they didn't pursue permits for or unpermitted work that was never disclosed to them have a couple of other options.

  • Contact an attorney to contact original sellers; they may be liable for the work if they knew about it when they sold the property.
  • Sell the home at a lower price and list it “as-is.” If purchased under these terms, buyers agree they're willing to purchase the property regardless of flaws. However, this may make prospective buyers hesitant, or the buyer may not be approved for a loan.

Homeowners should never sell without disclosing unpermitted work, even if previous owners were at fault. They could ultimately be held liable for the costs of any repairs, permits, or remediations. Nor should a home be advertised in a way that highlights unpermitted rooms, features, or other additions.

Having unpermitted work not only creates hassles when trying to sell, but insurance companies may not cover accidents or damages in unpermitted areas of the home, or mortgage companies may require immediate loan repayments. Unpermitted work can sometimes be resolved easily before putting a home on the market, but other times it can be a significant hurdle. Whatever the case, the best way to approach the conflict is with complete honesty.

For informational purposes only. Always consult with an attorney, tax, or financial advisor before proceeding with any real estate transaction.

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