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Looking at houses, we have found one that has been completely redone (footings to rafters in many places) but without permits for the most part. The original house was from 1908, it was redone and added onto in the 1970s, and the current owner redid nearly everything in the 2000s-2010s. I know the owner so I'm not personally worried about the work (he also had plumbers/electricians out for work outside his expertise).

We like the house, but I'm worried about the future implications of trying to sell a house of entirely un-permitted work. Has anyone had experience with this type of situation? Here are some sub-questions related to things I'm most concerned about, but any related experience is welcome.

  1. Are there any legal implications with a lot of un-permitted work on a home?
    • i.e. would I be responsible for permits/fines if any?
  2. Will not having permits be a "non-starter" for any processes? I.e. mortgage, insurance, valuation, etc.?
  3. Will not having permits reduce the value of my home?
  4. Will having lots of unpermitted work make it harder for me to sell the home at a later date?
  5. If I want to ger a permit for work I want to do on the home, will there be complications?
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  • upnest.com/1/post/unpermitted-work
    – abelenky
    Feb 23 at 22:08
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    The first approach should probably be to try to get the work retro-actively inspected and permitted, which depends very much on the attitude of the city (and the particular city-worker you encounter). A retro-active permit would solve all the issues. But if the work was extensive ("owner redid nearly everything..."), that might be difficult.
    – abelenky
    Feb 23 at 22:10
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    If it were me, I'd get the permitting done as part of the sales agreement - no permit, no sale.
    – Jon Custer
    Feb 23 at 22:22
  • copy/pasted from this DIY post which was closed as unfocused. diy.stackexchange.com/questions/267552/…
    – Harper - Reinstate Monica
    Feb 23 at 22:52

1 Answer 1

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Consult a lawyer

These issues are quite common and their impact depends on your jurisdiction (usually local governments handle this) and the attitude of your potential lenders/buyers.

In most cases, local governments have the power, in extremis, of ordering the demolition of unpermitted work. However, this is normally done only when the work is irredeemably unsafe or adversely affects the amenity of neighbours. More common might be an order to make good any defective work, possibly to current rather than historical codes after which they will retroactively grant the permissions.

Some lenders will refuse to lend if there are unpermitted works. Others will only lend against the unimproved land value less the cost of demolition. The same is true of insurers.

As for buyers, well, its making you stop and think, isn't it?

Common solutions are to make your offer contingent on the current owner cleaning all this up before you close or offering less to cover the risks you are assuming. This may cause you to miss the property but that's the risk you run.

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  • Great answer thank you! As one point of clarification. What would precipitate local government enforcing the work be brought to code and permitted? Is this something that typically is brought to light during a sale?
    – cam.b
    Feb 24 at 18:42
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    Could be anything. A new mayor elected on a fix the council drive. A complaint from a neighbour. A sale. Just drawing attention, perhaps by being late paying rates.
    – Dale M ♦
    Feb 24 at 20:39

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