Selling a House With Work Without Permits

Selling a home can be hard enough at the best of times, but it can be even tougher when something pops up to interfere with the sale. Unpermitted construction is one such barrier to selling and one you’re going to have to deal with properly.

The term refers to a vast range of things. If you’ve had minor electrical work done without the permits, that will count. So would entire extensions on the house. So, it’s a broad area, going from the very minor to the really serious.

Getting building permits is not something that should be avoided. When it comes time to sell your home, you’ll regret it.

It’s the law right across the country that all structural and utility alterations on any property must abide by the codes and permits of the state. There’s no general exception to this law, so it must be abided by in all instances.

Selling a Home Without Building Permits

The Smaller Stuff

For the minor repairs or additions, things are usually not too arduous. You can often get a licensed professional to assess the additional electrical installations, or whatever the case may be, and bring them to code in this way.

Provided these changes are not poorly installed or severely lacking in safety measures, the process is a relatively simple one in most cases. There will be the standard call-out fees, along with the costs of any new materials and labor.

Besides the inspection costs, there may be some additional costs incurred in terms of the city codes. These will take administrative fees and the like and are not likely to be very onerous for smaller code violations.

According to local ordinances and codes, much of this will also depend on where you are since some of the requirements will differ from place to place. When making improvements, it’s well worth finding out what the specifics are for your area.

Ultimately, the minor code and permit problems can be managed without too much financial loss and can be fixed up relatively speedily.

Most contractors will handle the work involved while they’re completing other tasks on the property.

The Bigger Stuff

If you have a case in which significant changes have been made without the city permits, you have a substantially larger problem. In this case, there are no workarounds that will save you money. Pretty much every option open to you will cost real dollars.

Quite often when there are no permits taken for significant work there are also bulding code violations.

The standard way of dealing with this is to accept the high cost and go from there. In this regard, there are two basic approaches. The first of these is to bring in a contractor to do the assessment and provide some guidance.

The contractor will, in all likelihood, suggest some particular areas to be brought to code or may even insist that major repairs and alterations need to be made. It depends very much on the quality of the work and what is required in each particular case.

Your second option is to take a financial hit on the property itself. In this case, you affect no changes yourself, but declare the unpermitted work and bear the costs for this on your end of the real estate deal. It isn’t optimal in either case.

One thing you definitely do not want to do is attempt to pass the property over without disclosure of the facts. The laws differ from state to state, but failure to disclose things like substantial unpermitted work could potentially see you criminally charged in court.

Some people think that selling as-is relieves them of not having to disclose things about their home – in many states that is not the case.

Your Retroactive Options

There are ways to bring the repairs, or additions, up to code. Depending on the extent of the unpermitted work, this could be very expensive indeed. There is just no way to avoid the costs involved while remaining within the law.

One route might be to lay the responsibility for the repairs on the home’s previous owner if you didn’t actually do the additions or repairs yourself. In some cases, this can actually work, although it depends very much on the terms of that agreement.

If the previous owner didn’t disclose the alterations, this is against the law and breaches some aspects of the deed transfer itself. In this case, the previous owner may very well be liable for the repairs.

It might be very worth your while to investigate here. If you discover that work was done on the property before you purchased it and that this work is unpermitted, dig a little deeper. If you weren’t informed of the unpermitted additions, you might have a good case.

Speaking to someone in real estate law is a must because these kinds of things can be rather murky. While the law states that certain things have to be disclosed in any sale, there will be some gray areas regarding what exactly qualifies in specific cases.

Another way to go around the issue might be to market your property as an investment, although clearly, this won’t work for all cases and will likely result in a substantial loss of revenue from the sale.

No matter how you slice it, it’s going to cost you.

Thoughts From Real Estate Agents

We reached out to a couple of agents from around the country on their thoughts on the sellers not getting permits. Vicki Moore an agent from Pacifica California says it’s happening quite a bit in her market.

“Buyers are accepting of it because of how heavily skewed the market is towards sellers. Nearly every home has a bidding war so if a buyer wants the home they can’t complain about the owner not pulling permits”.

Kevin Vitali a Massachusetts-based real estate agent mentions the same thing. “Some buyer’s agents will do the research for their clients to find out if permits were taken for required work. In the end, many of them don’t ask the seller to do anything for fear of losing out to another buyer who doesn’t have this requirement”.

It’s hard to write a winning offer when you are making demands of a seller they don’t need to accept. Sellers have the luxury of being choosy with buyer’s offers in today’s real estate market.

Final Thoughts

It’s an annoying problem, but then the codes are there for a reason. There’s also an excellent reason why it’s a legal requirement to openly acknowledge these things in any deed of sale.

Homes should have a baseline of quality and safety built into them as standard.

In the final reckoning, it is doubtful that you will be able to escape a severe financial hit due to unpermitted work on the home. Whether you pay up to get things coded before the sale or take a loss on the deal itself, you’ll be paying for it.

It may sound quite obvious, but the best solution is prevention in these cases. It will always cost less than the cure, and in terms of stress, it’s by far the easier route to take for all concerned.

Get the correct coding and permits before you end up in this situation. It’s just not worth the hassle and cost once everything is counted up and could ultimately end up wrecking your investment completely.

Wendy DesslerAbout the author: The above article on how to sell a house with unpermitted construction was written by Wendy Dessler. Wendy is a super-connector who helps businesses find their audience online through outreach, partnerships, and networking. She frequently writes about the latest advancements in digital marketing and focuses her efforts on developing customized blogger outreach plans depending on the industry and competition.