Buying a home with unpermitted addition

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JaceSpade
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Buying a home with unpermitted addition

Post by JaceSpade » Mon Sep 23, 2019 12:21 pm

My wife and I are interested in buying a home in an HOA. Two owners ago, the owner was a contractor who built an additional room without reporting it to the HOA or the county. The work was done over 10 years ago, and apparently there have been no issues. But it was done without permits, inspections or approvals.

The current owners are selling it as a 1700-square foot, four-bedroom home. But as far as the county and HOA are concerned, it's three bedrooms, 1600 square feet.

My wife and I love the home and want to make an offer. It's our chance to get the home we want for our family in a desirable community at a price we can afford.

The Realtor has been upfront about everything and said there's a possibility that there could be issues with county inspectors. But he said there's no need for us to report the unpermitted work and that this thing has happens all the time in our county with no issues.

What are the issues here and what should we be aware of if we make an offer? What do we need to do to fix things so that we don't run into situations in the future with the county?

123
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Re: Buying a home with unpermitted addition

Post by 123 » Mon Sep 23, 2019 1:01 pm

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
,,,What do we need to do to fix things so that we don't run into situations in the future with the county?
Depending on the city/county building inspection standards the best remedy may be to get a demolition permit and remove the offending portion of the house. Alternatively you could ask the building permits department what options might be available to legitimize the addition. To legitimize the addition you would have to likely file an approved set of plans for addition, get a building permit, and all the necessary inspections. Depending on the nature of the addition it might not be possible to do all the required inspections without removal of some portions of the addition. If there were things done like a slab over bare earth, pipes placed under a new slab or in walls, wiring placed in walls or ceiling, etc it may be necessary to remove some of the building materials to allow necessary inspections.

Simply adjust your offer to reflect the expected cost of demolition and reconstruction. You may also need to include costs of an alternative residence for you and your family while the property is legitimized.

Depending on regulations and local practices it may be difficult or impossible to get property/fire insurance or financing on property with non-permitted modifications, the potential insurer or lender has no guarantee that the property conforms to required building codes.
Last edited by 123 on Mon Sep 23, 2019 1:17 pm, edited 1 time in total.
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barnaclebob
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Re: Buying a home with unpermitted addition

Post by barnaclebob » Mon Sep 23, 2019 1:10 pm

If its been there for 10 years I wouldn't be too worried about the safety of the structure. The real concern is dealing with any possible govt red tape. Maybe give the county a call and see what the procedure is to have it legitimized. At the very least expect a new assessment and corresponding increase in taxes.

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unclescrooge
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Re: Buying a home with unpermitted addition

Post by unclescrooge » Mon Sep 23, 2019 1:15 pm

If I bought a house like that, I wouldn't pay full market price for 4 bed, 1700 sqft house. Illegally built structures do not command full market valuations.
I would look in to legalizing the structure. I don't think your insurance will cover any illegal structures either.

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Re: Buying a home with unpermitted addition

Post by fru-gal » Mon Sep 23, 2019 1:15 pm

barnaclebob wrote:
Mon Sep 23, 2019 1:10 pm
If its been there for 10 years I wouldn't be too worried about the safety of the structure. The real concern is dealing with any possible govt red tape. Maybe give the county a call and see what the procedure is to have it legitimized. At the very least expect a new assessment and corresponding increase in taxes.
That's what I would do. This will not make the current owners your friends, however, so you may lose the chance to buy the house. Any other course of action is financially risky plus you may have to have the addition, which may be part of why you are buying the house, removed. There may be no way to have the addition approved if it is too close to lot lines, etc.

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anon_investor
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Re: Buying a home with unpermitted addition

Post by anon_investor » Mon Sep 23, 2019 1:23 pm

Not sure if the jurisdiction allows it, but when I bought my house, during the title search and related due diligence by my attorney it was discovered that there was some renovations that did not have proper permitting, so at no cost to me the seller paid the fine and got the proper permits/inspection after-the-fact from the town, so everything was all proper and legal by the time of closing.

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greg24
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Re: Buying a home with unpermitted addition

Post by greg24 » Mon Sep 23, 2019 1:25 pm

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
The current owners are selling it as a 1700-square foot, four-bedroom home. But as far as the county and HOA are concerned, it's three bedrooms, 1600 square feet.
I would base the offer on a 3 BR 1600 square foot house.

Or I would walk away from a possible headache.

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FrugalInvestor
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Re: Buying a home with unpermitted addition

Post by FrugalInvestor » Mon Sep 23, 2019 1:28 pm

barnaclebob wrote:
Mon Sep 23, 2019 1:10 pm
If its been there for 10 years I wouldn't be too worried about the safety of the structure. The real concern is dealing with any possible govt red tape. Maybe give the county a call and see what the procedure is to have it legitimized. At the very least expect a new assessment and corresponding increase in taxes.
This may very well be the answer. I did some electrical, etc. to a house we lived in with no permits. When I went to sell it I wanted to make sure that there weren't any hitches so I called the county to 'confess' and ask what needed to be done to make it 'legal.' To my surprise the county sent out an inspector and I gave him the rundown on what I'd done, he took a cursory look, signed off on the changes and I paid the county's fees. That was it! Interestingly there were three separate jobs involved and since there was just one inspection for all three I paid 1/3 of what I would have paid to have the jobs inspected individually as they were completed. Oh, and I was on the county's blacklist for awhile but I was moving so no problem with that. The inspector himself was very nice about the whole thing.

I think it would be worth a call.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

Murgatroyd
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Re: Buying a home with unpermitted addition

Post by Murgatroyd » Mon Sep 23, 2019 1:29 pm

It’s time for BOTH realtors to earn their commissions. Simply tell them no dice until they have documentation that the addition is legal. It may require the current owner paying inspection and back taxes. Do you want to risk that? You may have to walk away.

WS1
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Re: Buying a home with unpermitted addition

Post by WS1 » Mon Sep 23, 2019 1:32 pm

If you want to contemplate legalization please have a architect or surveyor determine if the addition could legally be built. There’s a big difference between legalizing something built without permits and legalizing something that violates 3 sections of the zoning code.

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Re: Buying a home with unpermitted addition

Post by Vanguard Fan 1367 » Mon Sep 23, 2019 1:38 pm

You mention the HOA. I hope they don't have any issues with anything involving the sale. I just got an email from my HOA saying that three pallets of roof tiles left from when the house was built 2006 were in a neighbor's vacant wooded lot, well hidden, and would I like to go remove them. I bought the house in 2015. I don't know if I refused if they would word this more forcefully. I am having the project estimated and will make a decision as to how to proceed after I get the estimate.

Dave55
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Re: Buying a home with unpermitted addition

Post by Dave55 » Mon Sep 23, 2019 1:40 pm

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
My wife and I are interested in buying a home in an HOA. Two owners ago, the owner was a contractor who built an additional room without reporting it to the HOA or the county. The work was done over 10 years ago, and apparently there have been no issues. But it was done without permits, inspections or approvals.

The current owners are selling it as a 1700-square foot, four-bedroom home. But as far as the county and HOA are concerned, it's three bedrooms, 1600 square feet.

My wife and I love the home and want to make an offer. It's our chance to get the home we want for our family in a desirable community at a price we can afford.

The Realtor has been upfront about everything and said there's a possibility that there could be issues with county inspectors. But he said there's no need for us to report the unpermitted work and that this thing has happens all the time in our county with no issues.

What are the issues here and what should we be aware of if we make an offer? What do we need to do to fix things so that we don't run into situations in the future with the county?
Make an offer contingent on county approval/permit as structure is.

Dave

Thegame14
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Re: Buying a home with unpermitted addition

Post by Thegame14 » Mon Sep 23, 2019 1:40 pm

Id offer something below market price of 4 bedroom 1,700 SQ feet, and put contingent on addition being properly permitted by town, they can take it or leave it. All costs of getting permits, everything up to code, filing with town, etc... would be paid by seller.

FrugalConservative
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Re: Buying a home with unpermitted addition

Post by FrugalConservative » Mon Sep 23, 2019 1:56 pm

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
It's our chance to get the home we want for our family in a desirable community at a price we can afford.
If this home is in a hot market, the longer you drag your feet regarding permits, it is almost guaranteed another buyer will come in and look past this.

Two other people purchased this home without worrying about permits. I can guarantee if you press this issue, another buyer will come in that doesnt care.

barnaclebob
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Re: Buying a home with unpermitted addition

Post by barnaclebob » Mon Sep 23, 2019 2:12 pm

FrugalConservative wrote:
Mon Sep 23, 2019 1:56 pm
JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
It's our chance to get the home we want for our family in a desirable community at a price we can afford.
If this home is in a hot market, the longer you drag your feet regarding permits, it is almost guaranteed another buyer will come in and look past this.

Two other people purchased this home without worrying about permits. I can guarantee if you press this issue, another buyer will come in that doesnt care.
Yep. If its a hot market this will be on you (the OP) to deal with, any contingency stating it needs to be made legal will get your offer tossed pretty quick.

FI4LIFE
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Re: Buying a home with unpermitted addition

Post by FI4LIFE » Mon Sep 23, 2019 2:18 pm

WS1 wrote:
Mon Sep 23, 2019 1:32 pm
If you want to contemplate legalization please have a architect or surveyor determine if the addition could legally be built. There’s a big difference between legalizing something built without permits and legalizing something that violates 3 sections of the zoning code.
I agree, although your realtor should already be all over this if they are worth their commission. A simple trip to zoning might actually be enough. They can tell you if there is any encroachment on setbacks/wetlands etc.

delamer
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Re: Buying a home with unpermitted addition

Post by delamer » Mon Sep 23, 2019 2:26 pm

unclescrooge wrote:
Mon Sep 23, 2019 1:15 pm
If I bought a house like that, I wouldn't pay full market price for 4 bed, 1700 sqft house. Illegally built structures do not command full market valuations.
I would look in to legalizing the structure. I don't think your insurance will cover any illegal structures either.
I would be concerned about the homeowner’s insurance too.

The basement of our current home was finished by the previous owner without permits. We insisted that the permits be obtained as part of our purchase offer. It turned out not to be a problem.

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Re: Buying a home with unpermitted addition

Post by indexfundfan » Mon Sep 23, 2019 3:16 pm

FrugalConservative wrote:
Mon Sep 23, 2019 1:56 pm
JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
It's our chance to get the home we want for our family in a desirable community at a price we can afford.
If this home is in a hot market, the longer you drag your feet regarding permits, it is almost guaranteed another buyer will come in and look past this.

Two other people purchased this home without worrying about permits. I can guarantee if you press this issue, another buyer will come in that doesnt care.
Agree with this.
My signature has been deleted.

renue74
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Re: Buying a home with unpermitted addition

Post by renue74 » Mon Sep 23, 2019 3:23 pm

Depending on your city, remodel or additions without permits should be fine.

I built a new deck about 5 years ago. No permits. Looks fine and is structurally fine. If I sold the house, I'm not sure a buyer would say anything.

As long as a private party inspection was done and the addition is fine, I wouldn't worry about it.

I can tell you without a doubt that permits in my city are a joke. It depends on the inspector. I remodel/rehab rental property and flips. Inspectors will walk through my homes and not even open the breaker box and approve my rough in inspections. Then 2 houses later, a different inspector will make me add piers under the house for old work I didn't even do. It's a mixed bag at best.

Permits are designed to let the the county interfere in my personal business and then do property tax assessments after I finish so they can make more tax dollars. Just had a house go from $1700/year in taxes to $4900/year. Can you tell I'm bitter?!?

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JoeRetire
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Re: Buying a home with unpermitted addition

Post by JoeRetire » Mon Sep 23, 2019 3:26 pm

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
The current owners are selling it as a 1700-square foot, four-bedroom home. But as far as the county and HOA are concerned, it's three bedrooms, 1600 square feet.
... until some angry neighbor reports them to the local tax authorities.

BTW, if the HOA knowingly lets this happen, they could be in trouble down the road as well. That doesn't speak well for their governance.
What do we need to do to fix things so that we don't run into situations in the future with the county?
If you need to sell this house sometime in the future, you'll own the problem unless you get it fixed before purchasing.

Have the owner get all the required inspections, approvals, and permits before you buy. Otherwise walk away.
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Goal33
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Re: Buying a home with unpermitted addition

Post by Goal33 » Mon Sep 23, 2019 3:36 pm

typically HOAs have some type of clause that says something along the lines of "past non-enforcement of rules does not take away the HOA right to enforce rules now/later"

you'll probably never have a problem but personally, I am too detail oriented to take this type of chance.
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JaceSpade
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Re: Buying a home with unpermitted addition

Post by JaceSpade » Mon Sep 23, 2019 3:47 pm

Lots of good advice here and things to think about.

The addition didn't change the exterior of the house. They added a room where there was a lot of empty space due to vaulted ceilings. I would have never known the room wasn't originally part of the house if it weren't for all the homes in the HOA being three bedrooms. One or two others may have similarly added a room.

I spoke to the HOA and they said since the exterior wasn't changed, it's no issue with them.

I have a call out to a city planner and I'm hoping to hear back from him to get an idea of whether we should go forward.

iamlucky13
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Re: Buying a home with unpermitted addition

Post by iamlucky13 » Mon Sep 23, 2019 3:55 pm

If you are financing the purchase, you should expect the lender will observe the advertised square footage and room number does not match the city or county records. They may refuse to give you a mortgage with an permitted addition.

The two courses of action to normalize the situation are:

1) Remove the addition (may have to consult with local planning authority if a demolition permit could be required).

2) Permit the addition - this will require going through the permit request, inspection, and approval process. It may be difficult to get approval of the framing and electrical since it is presumably hidden by drywall, but I'm sure every permitting department in the country goes through this from time to time and should be able to provide guidance. Rework if anything is deficient may also be expensive

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Re: Buying a home with unpermitted addition

Post by 4nursebee » Mon Sep 23, 2019 4:03 pm

anon_investor wrote:
Mon Sep 23, 2019 1:23 pm
Not sure if the jurisdiction allows it, but when I bought my house, during the title search and related due diligence by my attorney it was discovered that there was some renovations that did not have proper permitting, so at no cost to me the seller paid the fine and got the proper permits/inspection after-the-fact from the town, so everything was all proper and legal by the time of closing.
This is the way to go

Our county lists permit fees as double for this stuff

Our area also allows some owner constructed work. Like 10 k jobs are ok

Relax
4nursebee

barnaclebob
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Re: Buying a home with unpermitted addition

Post by barnaclebob » Mon Sep 23, 2019 4:07 pm

JaceSpade wrote:
Mon Sep 23, 2019 3:47 pm
Lots of good advice here and things to think about.

The addition didn't change the exterior of the house. They added a room where there was a lot of empty space due to vaulted ceilings. I would have never known the room wasn't originally part of the house if it weren't for all the homes in the HOA being three bedrooms. One or two others may have similarly added a room.

I spoke to the HOA and they said since the exterior wasn't changed, it's no issue with them.

I have a call out to a city planner and I'm hoping to hear back from him to get an idea of whether we should go forward.
This is a really big bit of new info, your original post makes it sound like they added 100sq ft for the new bedroom. I woudn't call that an "addition", just remodeled. With this new info I personally wouldn't have any issues so long as nothing looks shoddy. Must have been a really weird layout if you can carve out an extra bedroom and not completely mess up the house.

Litfury
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Re: Buying a home with unpermitted addition

Post by Litfury » Mon Sep 23, 2019 4:43 pm

I agree with the above poster. This isn't as big a deal as it originally sounded. If you got an ok from the HOA I wouldn't hesitate to move forward if this is an ideal home for you.

delamer
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Re: Buying a home with unpermitted addition

Post by delamer » Mon Sep 23, 2019 6:11 pm

barnaclebob wrote:
Mon Sep 23, 2019 4:07 pm
JaceSpade wrote:
Mon Sep 23, 2019 3:47 pm
Lots of good advice here and things to think about.

The addition didn't change the exterior of the house. They added a room where there was a lot of empty space due to vaulted ceilings. I would have never known the room wasn't originally part of the house if it weren't for all the homes in the HOA being three bedrooms. One or two others may have similarly added a room.

I spoke to the HOA and they said since the exterior wasn't changed, it's no issue with them.

I have a call out to a city planner and I'm hoping to hear back from him to get an idea of whether we should go forward.
This is a really big bit of new info, your original post makes it sound like they added 100sq ft for the new bedroom. I woudn't call that an "addition", just remodeled. With this new info I personally wouldn't have any issues so long as nothing looks shoddy. Must have been a really weird layout if you can carve out an extra bedroom and not completely mess up the house.
I agree; not really an addition.

Not so odd though. In our previous house, which we bought new, there were two options — 3 bedrooms with a 2-story front foyer or 4 bedrooms with a standard height foyer.

123
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Re: Buying a home with unpermitted addition

Post by 123 » Mon Sep 23, 2019 7:13 pm

JaceSpade wrote:
Mon Sep 23, 2019 3:47 pm
...The addition didn't change the exterior of the house. They added a room where there was a lot of empty space due to vaulted ceilings...
The manner in which the units were initially permitted could be a key issue. Lots of condo developments maximize the use of allowed square footage to sell as many units of a permitted square footage as possible. There could be hard square footage limit for each particular lot to keep the units in conformance with city zoning standards.

One of my previous homes had a "Great Room" with high vaulted ceilings. Though we didn't need any more space I sometimes thought about the option of adding a couple of more rooms using that space. Since most property appraisals start with square footage if you boost that number your selling price can be higher.
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HomeStretch
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Re: Buying a home with unpermitted addition

Post by HomeStretch » Mon Sep 23, 2019 7:51 pm

In my area, unpermitted work is caught during the legal review as attorneys are asking for copies of all permits for work done in the home. Usually it is a surprise to the buyer. It’s interesting that this unpermitted space is included in the listing’s square footage, the seller’s agent is discussing it as no big deal and the seller isn’t proactively taking care of the issue by getting the permit retroactively. Must be a hot seller’s market.

No way would I close on the property until the seller took care of the permit/CO. I wouldn’t want to deal with it when it came time to resell.

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Re: Buying a home with unpermitted addition

Post by Beehave » Mon Sep 23, 2019 8:04 pm

My position would be I want to buy it as clean as possible of legal hassles. Someone above pointed out the possible need to demo some or all for proper inspection of footing, subterranean pipes, etc. That's a potential WW1 trench-warfare-level never-ending pain problem.

I would not call the authorities. That is the job of the seller - - to contact the authorities tofind out how to provide you with a clean title and a structure that has the blessings of the authorities. If this seller cannot provide this so that the level of risk is understood, spend the extra money to buy a home from another seller who can.

There may not be other problems, but given this tidbit of an evident and glaring issue that's been disclosed, what are the chances that there are other, non-disclosed issues here? To mix-metaphors, when the tide goes out there may be more than one cockroach in this kitchen sans bathing suit.

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Re: Buying a home with unpermitted addition

Post by AlohaJoe » Mon Sep 23, 2019 8:20 pm

barnaclebob wrote:
Mon Sep 23, 2019 1:10 pm
If its been there for 10 years I wouldn't be too worried about the safety of the structure. The real concern is dealing with any possible govt red tape. Maybe give the county a call and see what the procedure is to have it legitimized. At the very least expect a new assessment and corresponding increase in taxes.
There was a recent thread about someone who had bought a house that had unpermitted remodelling. They had been done in the 1980s. So they were "Safe". Except the new owner then discovered substantial structural inadequacy during their own remodelling that was going to cost $1 million to remedy.

viewtopic.php?t=286525

Momus
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Re: Buying a home with unpermitted addition

Post by Momus » Tue Sep 24, 2019 1:48 am

Buying non permit addition/construction means you are buying a future problem. Sooner or later you will have to fix that problem. The cost can be dirt cheap or $50k+. You can choose to ignore it now and deal with it later (could be tomorrow when an inspector finds out or could be 30 yrs when you decide to sell it).

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Re: Buying a home with unpermitted addition

Post by jharkin » Tue Sep 24, 2019 7:56 am

renue74 wrote:
Mon Sep 23, 2019 3:23 pm
Depending on your city, remodel or additions without permits should be fine.

I built a new deck about 5 years ago. No permits. Looks fine and is structurally fine. If I sold the house, I'm not sure a buyer would say anything.

As long as a private party inspection was done and the addition is fine, I wouldn't worry about it.

I can tell you without a doubt that permits in my city are a joke. It depends on the inspector. I remodel/rehab rental property and flips. Inspectors will walk through my homes and not even open the breaker box and approve my rough in inspections. Then 2 houses later, a different inspector will make me add piers under the house for old work I didn't even do. It's a mixed bag at best.

Permits are designed to let the the county interfere in my personal business and then do property tax assessments after I finish so they can make more tax dollars. Just had a house go from $1700/year in taxes to $4900/year. Can you tell I'm bitter?!?

I think that is a little drastic, and not necessarily representative of all areas.

Building codes and permitting rules exist to protect homeowners from shoddy workmanship that could endanger or injure residents. I have lost track of how much truly sloppy work done by hacks or homeowners in over their head on a DIY (especially electrical :oops: ) that I have found and fixed in homes Ive lived in. It amazing some of these properties didn't burn down.

Its true that enforcement is spotty, and some inspectors are a joke or just use the rules to play town politics and promote/deny their pet projects. But that doesn't mean building codes have no value. We dont want to go back to the days of people dying in structure collapses and heating boiler explosions....

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Re: Buying a home with unpermitted addition

Post by pindevil » Tue Sep 24, 2019 8:40 am

iamlucky13 wrote:
Mon Sep 23, 2019 3:55 pm
If you are financing the purchase, you should expect the lender will observe the advertised square footage and room number does not match the city or county records. They may refuse to give you a mortgage with an permitted addition.

The two courses of action to normalize the situation are:

1) Remove the addition (may have to consult with local planning authority if a demolition permit could be required).

2) Permit the addition - this will require going through the permit request, inspection, and approval process. It may be difficult to get approval of the framing and electrical since it is presumably hidden by drywall, but I'm sure every permitting department in the country goes through this from time to time and should be able to provide guidance. Rework if anything is deficient may also be expensive
Option 3 - Find a new lender.

This scenario happened to me after waiting a year for a short sale to be approved by the sellers bank. My lender at the last minute decided not to provide funding because of an unpermitted addition. So, we found a new lender who would work with us. Problem solved and we have never had any issues going on 8 years now.

Later on after buying the home with the unpermitted addition the county has used satellite technology to record the extra square footage and increase our property taxes accordingly.

Andyrunner
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Re: Buying a home with unpermitted addition

Post by Andyrunner » Tue Sep 24, 2019 8:46 am

Why not call the county inspector office and talk to them?

Truth be told this isn't all uncommon and they see this all of the time. If the owner at the time was a contractor, they should be able to pull up their license and see if the guy really knew what he was doing.

This might be able to be fixed without gutting out the walls but the current owner should pay for it.

Mr. Rumples
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Re: Buying a home with unpermitted addition

Post by Mr. Rumples » Tue Sep 24, 2019 8:52 am

In 2016 we had a huge wind sheer storm which downed trees and over 26 telephone poles in the line running behind my house (we were out of power for 5 days). The guy across the field from me had a tree fall on his house. The damage was visible from the street and the county declared the house not habitable. Turns out the county then saw the addition was not listed and back taxes, interest and penalties are now due. He is still fighting - three years later - his homeowners insurance about it (they are refusing to pay for damage to the unauthorized addition and the improvement / addition is not finished (there is still a door to be hung and siding to be put on).

Regarding HOA's, in Colorado, the statute on HOA's (CCIOA) requires boards to effect a remedy within one year from the date they become aware of a violation. Every state is different. But in Colorado, if the improvement is not visible and the board/management company was not aware, they could require its removal.

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Re: Buying a home with unpermitted addition

Post by barnaclebob » Tue Sep 24, 2019 8:58 am

AlohaJoe wrote:
Mon Sep 23, 2019 8:20 pm
barnaclebob wrote:
Mon Sep 23, 2019 1:10 pm
If its been there for 10 years I wouldn't be too worried about the safety of the structure. The real concern is dealing with any possible govt red tape. Maybe give the county a call and see what the procedure is to have it legitimized. At the very least expect a new assessment and corresponding increase in taxes.
There was a recent thread about someone who had bought a house that had unpermitted remodelling. They had been done in the 1980s. So they were "Safe". Except the new owner then discovered substantial structural inadequacy during their own remodelling that was going to cost $1 million to remedy.

viewtopic.php?t=286525
I remember that thread and his cost estimate was highly suspect. That was also a much more extensive renovation. Worst case OP has is to restore the house back to its old form.

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Re: Buying a home with unpermitted addition

Post by Sandtrap » Tue Sep 24, 2019 9:04 am

JaceSpade wrote:
Mon Sep 23, 2019 12:21 pm
My wife and I are interested in buying a home in an HOA. Two owners ago, the owner was a contractor who built an additional room without reporting it to the HOA or the county. The work was done over 10 years ago, and apparently there have been no issues. But it was done without permits, inspections or approvals.

The current owners are selling it as a 1700-square foot, four-bedroom home. But as far as the county and HOA are concerned, it's three bedrooms, 1600 square feet.

My wife and I love the home and want to make an offer. It's our chance to get the home we want for our family in a desirable community at a price we can afford.

The Realtor has been upfront about everything and said there's a possibility that there could be issues with county inspectors. But he said there's no need for us to report the unpermitted work and that this thing has happens all the time in our county with no issues.

What are the issues here and what should we be aware of if we make an offer? What do we need to do to fix things so that we don't run into situations in the future with the county?
Actionable Considerations:

1. Consult with an architect and an engineer on the cost and procedure to get "as built" building plans drawn up and certified for the home and if they can run the permit for you. The permit fee will likely be higher for "as built" permits. The inspectors will also be more critical in some ways and not so in others since the architect/engineer are certifying the "addition" thereby releasing the building dept from liability.

***Do this before you buy the home. Just get a consult.

2. If you proceed with "assumptions" (the salespeople will always have assurances, ignore that), it may bite you later in a big way if a neighbor or property tax inspector, etc, causes the property/addition to come into question. As stated earlier, though inspectors are normally reasonable and logical, they do indeed have the authority to compel you to remove the structure if, for example, the foundation is done incorrectly, etc, etc. Likely, the previous owner contractor did things up to code, even without a permit, and that would be fine. But, again, realize that if, for example, the wiring can't be inspected because it is closed up, they can get you to remove the drywall to see that the wiring was done properly, and so forth. It can get nasty and sometimes does.

3. Again, salespeople will have assurances because they want to make the sale and get their commisions. But, ultimately, you will be left "holding the bag".

4. There will be disclaimers on the sales docs that you are aware of the unpermitted structure and agree to the sale.

5. Also, homeowner's insurance will not cover damage from fire, etc, if the cause was due to the unpermitted structure. Ouch!

6. You could ask the sellers to get the "as built" building permits as a condition of sale and stand your ground on that. Nothing to lose by asking.

7. Realize that these types of situations can get so "dicey" because of the unknowns (what can't be seen) that many architects, engineers, and General Contractors, will not have anything to do with enabling a solution.

8. Now, knowing the above possibilites, decide if you want to buy the home or not.


I have had a little experience(s) in these situations and IMHO, I would not touch it with a 10 foot pole.
j :happy
Last edited by Sandtrap on Tue Sep 24, 2019 10:38 am, edited 1 time in total.
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Mr. Rumples
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Re: Buying a home with unpermitted addition

Post by Mr. Rumples » Tue Sep 24, 2019 9:22 am

When I moved back east from Colorado and bought my current home (not in an HOA) the inspector had an issue/s with how some floor joists were being supported under a crawlspace. Its an older house and it looked a bit jury-rigged even to my untrained eye. I paid the $350 fee to have an engineer come and give a report. That then caused the seller to fix the problem up to the current code.

I've owned four homes in my lifetime. Everyone had surprises that needed to be fixed, some major, some minor. Why go into a purchase with a big unknown starting off?

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Re: Buying a home with unpermitted addition

Post by iamlucky13 » Tue Sep 24, 2019 11:30 am

pindevil wrote:
Tue Sep 24, 2019 8:40 am
iamlucky13 wrote:
Mon Sep 23, 2019 3:55 pm
If you are financing the purchase, you should expect the lender will observe the advertised square footage and room number does not match the city or county records. They may refuse to give you a mortgage with an permitted addition.

The two courses of action to normalize the situation are:

1) Remove the addition (may have to consult with local planning authority if a demolition permit could be required).

2) Permit the addition - this will require going through the permit request, inspection, and approval process. It may be difficult to get approval of the framing and electrical since it is presumably hidden by drywall, but I'm sure every permitting department in the country goes through this from time to time and should be able to provide guidance. Rework if anything is deficient may also be expensive
Option 3 - Find a new lender.

This scenario happened to me after waiting a year for a short sale to be approved by the sellers bank. My lender at the last minute decided not to provide funding because of an unpermitted addition. So, we found a new lender who would work with us. Problem solved and we have never had any issues going on 8 years now.

Later on after buying the home with the unpermitted addition the county has used satellite technology to record the extra square footage and increase our property taxes accordingly.
Interesting to know.

In our county, the assessor actually sends their appraisers to every property in the county on a rotating 6 year schedule. They only do a "drive by" appraisal. I had to appeal their appraisal last time - they had really lofty ideas about how much value new siding adds to a house.

I'm surprised the county didn't seek new permits from you. I just happened to look up the permit records yesterday for a new house going up near me - permit fees alone were over $8,000.

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Re: Buying a home with unpermitted addition

Post by iamlucky13 » Tue Sep 24, 2019 12:02 pm

delamer wrote:
Mon Sep 23, 2019 6:11 pm
barnaclebob wrote:
Mon Sep 23, 2019 4:07 pm
JaceSpade wrote:
Mon Sep 23, 2019 3:47 pm
Lots of good advice here and things to think about.

The addition didn't change the exterior of the house. They added a room where there was a lot of empty space due to vaulted ceilings. I would have never known the room wasn't originally part of the house if it weren't for all the homes in the HOA being three bedrooms. One or two others may have similarly added a room.

I spoke to the HOA and they said since the exterior wasn't changed, it's no issue with them.

I have a call out to a city planner and I'm hoping to hear back from him to get an idea of whether we should go forward.
This is a really big bit of new info, your original post makes it sound like they added 100sq ft for the new bedroom. I woudn't call that an "addition", just remodeled. With this new info I personally wouldn't have any issues so long as nothing looks shoddy. Must have been a really weird layout if you can carve out an extra bedroom and not completely mess up the house.
I agree; not really an addition.

Not so odd though. In our previous house, which we bought new, there were two options — 3 bedrooms with a 2-story front foyer or 4 bedrooms with a standard height foyer.
If I'm understanding right, it sounds like they divided a vaulted space vertically into two stories by adding a floor. This would more significant than dividing a large room by adding a wall.

If so, the joist size and spacing, connections to the walls, and the framing of the supporting walls are all structurally significant. Not looking shoddy won't tell anything about how the joists are connected to the walls in particular, which is likely hidden behind drywall.

It needs to meet at least 30 psf load rating, possibly 40 psf if it doesn't meet the building code definition of a bedroom. That means it needs to be safe to have as much as 4000 pounds of stuff in there. If the joists don't rest on a framed wall or proper hangers, there could be an actual risk.

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Re: Buying a home with unpermitted addition

Post by baconavocado » Tue Sep 24, 2019 12:27 pm

You didn't mention how you found out about the unpermitted addition, but it makes me wonder how many home buyers check for building permits on homes they're considering buying. My guess is, not many.

And also, how much work is done on homes without the proper permits? My guess is, quite a bit.

By the way, I scrolled through this thread until I found Sandtrap's comments because I knew he would have good advice.

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Re: Buying a home with unpermitted addition

Post by JaceSpade » Tue Sep 24, 2019 9:26 pm

We originally looked at the home without having our own Realtor, only talking to the sellers' Realtor who disclosed the non-permitted room to us.

I called the city and the the building department said it would cost about $2,000 for an "as-built" permit, I think it was called, and that this situation wasn't uncommon. Before that, I would have to hire an architect or structural engineer to draw up plans. They didn't have any idea what that would cost, but said the process could take one to two months.

We have our own Realtor now who is researching the house. She doesn't understand how they can list it as a 1,700-square-foot, four-bedroom house because once an appraisal is done it will show that it was built as a three-bedroom, 1,600-square-foot home. She's saying if I make an offer it should be based on what three-bedroom, 1,600-square-foot homes there are going for, which is about $20,000 less that what they are asking. She talked to a contractor who estimated it would cost about $3,500 to $4,000 to get it up to code. He's going to take a look at it in a couple days for a more accurate estimate. Issues could be electrical, windows, structural, etc.

I asked that the sellers take care of getting everything legitimized with the city but their Realtor is saying they are unwilling to do this and want to sell it as is. After all, they bought it as is. They want to sell quickly because they're buying another house and don't want to deal with it. Apparently, they have no other offers, though.

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Re: Buying a home with unpermitted addition

Post by F150HD » Tue Sep 24, 2019 9:32 pm

how will this affect getting a homeowners policy? (haven't read whole thread if this was already mentioned). If its structurally questionable in any way.....

on that note, makes one wonder about the replacement value if there was a fire etc. if this wasn't permitted, it may diminish the value? personally, this is something I'd get way ahead of before moving forward.
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Re: Buying a home with unpermitted addition

Post by criticalmass » Tue Sep 24, 2019 9:50 pm

JaceSpade wrote:
Tue Sep 24, 2019 9:26 pm
We originally looked at the home without having our own Realtor, only talking to the sellers' Realtor who disclosed the non-permitted room to us.

I called the city and the the building department said it would cost about $2,000 for an "as-built" permit, I think it was called, and that this situation wasn't uncommon. Before that, I would have to hire an architect or structural engineer to draw up plans. They didn't have any idea what that would cost, but said the process could take one to two months.

We have our own Realtor now who is researching the house. She doesn't understand how they can list it as a 1,700-square-foot, four-bedroom house because once an appraisal is done it will show that it was built as a three-bedroom, 1,600-square-foot home. She's saying if I make an offer it should be based on what three-bedroom, 1,600-square-foot homes there are going for, which is about $20,000 less that what they are asking. She talked to a contractor who estimated it would cost about $3,500 to $4,000 to get it up to code. He's going to take a look at it in a couple days for a more accurate estimate. Issues could be electrical, windows, structural, etc.

I asked that the sellers take care of getting everything legitimized with the city but their Realtor is saying they are unwilling to do this and want to sell it as is. After all, they bought it as is. They want to sell quickly because they're buying another house and don't want to deal with it. Apparently, they have no other offers, though.
It sounds like you want this house, but you want a legitimate permitted house that is safe and sellable in the future. Here's what I would do, and have done similar in the past. Go back to the building office with photos/information about this specific house/address, and explain what the situation is, and ask for information about what is needed for that specific house. Now the building department knows what's going on AND you get a fix-it plan that will eventually make everyone happy.

Report back to the seller what the building office states they need for that house, hopefully in writing. The seller will no longer be motivated to find some unscrupulous buyer who doesn't care about getting a legally permitted structure, so you don't have to compete with such. Instead they have an informed buyer who is willing to buy the house, as soon as they take care of what they need to take care of anyway.

It shouldn't be too much of a big deal to get everything inspected and verified is up to code, unless it is unsafe anyway. And if it is unsafe or not up to safety code, you want that fixed BEFORE you buy the house. You really want that fixed.

If their Realtor insists on delivering a home that may not be safe and they are blocking making it safe before a sale can go through, ask for them to put in writing. Of course they aren't going to do that, but it puts them on notice about shady dealings--and gives them extra motivation to ensure that things are done on the up-and-up. Remind them that the building office has informed you of what is needed---which of course they are ethically bound to disclose to any future buyer.

One very important reason to get this taken care of before you buy, is that you don't want to be stuck down the road with an unpermitted structure that perspective future buyers may balk at. You don't want to be the one stuck trying to unload a house that isn't up to code in the future. You also don't want insurance nightmares in the meantime, and other cascading problems that you will be responsible for. Now is your chance to avoid all that.

The HOA is completely separate from government building office approval. HOAs typically just care about outside appearances, and make no judgements on safety or internal systems. If the home has sold since the renovation was done, it is safe to assume that the home passed the HOA architectural inspection done at selling time, so you should be good to go. If it is not good to go, it's up to the seller to make the HOA happy before the sale can go through anyway. But that has nothing to do with the serious matter of the safety code and permit issues.

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Re: Buying a home with unpermitted addition

Post by redrocker » Tue Sep 24, 2019 11:00 pm

JaceSpade wrote:
Tue Sep 24, 2019 9:26 pm
I asked that the sellers take care of getting everything legitimized with the city but their Realtor is saying they are unwilling to do this and want to sell it as is. After all, they bought it as is. They want to sell quickly because they're buying another house and don't want to deal with it. Apparently, they have no other offers, though.
What is being described here sounds like the seller's realtor isn't particularly concerned about potentially losing their license over unscrupulous conduct. Especially after listing the property as something that it isn't.

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Re: Buying a home with unpermitted addition

Post by zeal » Wed Sep 25, 2019 7:30 am

JaceSpade wrote:
Tue Sep 24, 2019 9:26 pm
We originally looked at the home without having our own Realtor, only talking to the sellers' Realtor who disclosed the non-permitted room to us.

I called the city and the the building department said it would cost about $2,000 for an "as-built" permit, I think it was called, and that this situation wasn't uncommon. Before that, I would have to hire an architect or structural engineer to draw up plans. They didn't have any idea what that would cost, but said the process could take one to two months.

We have our own Realtor now who is researching the house. She doesn't understand how they can list it as a 1,700-square-foot, four-bedroom house because once an appraisal is done it will show that it was built as a three-bedroom, 1,600-square-foot home. She's saying if I make an offer it should be based on what three-bedroom, 1,600-square-foot homes there are going for, which is about $20,000 less that what they are asking. She talked to a contractor who estimated it would cost about $3,500 to $4,000 to get it up to code. He's going to take a look at it in a couple days for a more accurate estimate. Issues could be electrical, windows, structural, etc.

I asked that the sellers take care of getting everything legitimized with the city but their Realtor is saying they are unwilling to do this and want to sell it as is. After all, they bought it as is. They want to sell quickly because they're buying another house and don't want to deal with it. Apparently, they have no other offers, though.
Offer based on the 3BR, 1600SF value. If they say no, they say no. There are always other homes, not one is perfect. I wouldn't worry too much about it. Chances are they'll say yes since they are in a rush.

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Re: Buying a home with unpermitted addition

Post by fru-gal » Wed Sep 25, 2019 8:10 am

criticalmass wrote:
Tue Sep 24, 2019 9:50 pm
Remind them that the building office has informed you of what is needed---which of course they are ethically bound to disclose to any future buyer.
There's ethically and there's legally. When I sold my house in California, I had to fill out a stack of forms about a foot high, including what types of wild animals were there in the area. Let's see, squirrels, do I have to list the birds by species.....

When a neighbor had his house for sale in RI, I informed him that he should tell potential buyers that I would object to plans for a house modification. Apparently this caused him and his agent some angst as to whether they should disclose this to buyers. Whether they were not legally required to or whether they were crooked, I have no idea.

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Re: Buying a home with unpermitted addition

Post by Watty » Wed Sep 25, 2019 8:23 am

I would also be concerned about what other problems the house may have that you don't know about.

One thing to keep in mind is that in a strong housing market a house with "issues" may not be that hard to sell but someday you might need to sell it in a soft housing market.

If you don't get the permits fixed now you may need to pay to take care of it when you eventually sell the house.

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Re: Buying a home with unpermitted addition

Post by Sandtrap » Wed Sep 25, 2019 9:11 am

JaceSpade wrote:
Tue Sep 24, 2019 9:26 pm
I asked that the sellers take care of getting everything legitimized with the city but their Realtor is saying they are unwilling to do this and want to sell it as is. After all, they bought it as is. They want to sell quickly because they're buying another house and don't want to deal with it. Apparently, they have no other offers, though.
Perhaps, seriously consider moving on from this home and looking for another.

also: watch the movie: "The Money Pit" with Tom Hanks. Comedy.

j
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