Ignore Home Permits and Pay….Big Time

Ignore Home Permits and Pay….Big Time

Often people do work on their home (add a room; change the garage into a family room or TV room) without getting a permit for the work.  When the property is put on the market to sell, the seller must inform the buyer that the expansion and other home improvements were done with or without a permit(s). 

If there is no permit this can create a problem for the buyer because:

 (a) if they accept and purchase the property knowing about the absence of permits, they in turn become responsible for the lack of a permit if one is needed in the future;

 (b) and when the property is appraised the un-permitted work will not be included in the appraisal.

If the buyer insists on purchasing the property without the required permits than they should negotiate a significant purchase discount for the risk they will undertake.

Expensive and Difficult

The resolution to the problem can be expensive and difficult.  The City/County planning department can:

Have the un-permitted work torn down and have you re-do the improvements.

Or the City/County inspectors can have you tear down part of the improvements (ie., some walls) to view the electrical and other utility items for inspection.

Or the City/County can accept everything as is and have you apply for a permit but hit you with a fine (maybe upward of 2-5 times the original permit feed) and other costs for failing to get a permit.

Being Quiet Will Not Help

Should the seller be mute on the subject (ie., not tell the buyer of the un-permitted work) they expose themselves to a possible (future) law suit.  If the lending company is unaware of the un-permitted work (which should not occur), they too can take legal action against both the buyer, seller and possibly the appraiser and it could extend to the listing/selling real estate broker/agent and title company.

When it becomes a legal situation the old adage rules:  “Throw mud against the wall and see what sticks” knowing full well that someone has to pay.

Big Brother

Orange Man Detective with Magnifying GlassOf course when the assessor is made aware of the increased floor space the home owner will be exposed to an adjusted property tax increase and possibly the assessor may seek payment of back taxes.

By not obtaining the permits one can face severe and costly remedial consequences to resolve the situation.  One may save a penny upfront but it could be costly in the future.

I think it is safe to say that getting the permits upfront is far cheaper than the added headaches incurred by not having them.

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