After an exhaustive search viewing home after home, you’ve finally stumbled across the one. This is your dream home. It’s in your favorite neighborhood, nearby the best schools, has an open kitchen with gorgeous granite countertops and that third bathroom. It completely embodies your lifestyle. You want it. You need it. You’ve got to live there! Exciting right? There’s no argument that buying a house is thrilling. So thrilling in fact that you might forget to consider all the, what I like to call, “details”. One such detail that many new homeowners overlook are these pesky pieces of paperwork known as permits. More specifically, permits for any additions or construction made to a home. But why are permits important for buyers to consider? And what are the repercussions of buying a home without them? Well, let’s take a closer look.
One fact you should know is that sellers are required by law to disclose all information about permitted or unpermitted additions and construction made to a home. However, not all sellers are created equal and some may not divulge this information upfront. Why don’t they you ask? The most common reason is due to property tax implications. In other words, procuring permits from the county means paying more to the taxman. So, what happens if you’ve already purchased your home and then found out about these unpermitted additions? Hypothetically, you could do nothing. Who’s going to know? Answer: a real estate agent. This route is ill advised because it will come back to bite you when it’s time for resale. The details of your home are included in the county records and MLS listing. And an agent will know something’s up if there’s a distinct difference between what they see and what they read. You may advertise your home as having 3 bedrooms and 2 bathrooms on 2,200 square feet but if one of those bedrooms is unpermitted, the MLS listing will say otherwise. The outcome will be a decrease in value on your home and no one wants that.
Avoid the Lawyers:
This leads us to the second reason permits are important: avoiding legal troubles. If you’ve already bought your house and realize you have unpermitted additions, your first question is probably “Who’s responsible for incurring the cost of the permit?” This depends on your disclosure statement. Did the previous owners make note of the lack of permits? If so, and if you can prove the property is as it was when you first bought it, you can plea “innocent purchaser”. This can be difficult to prove and requires the cooperation of the previous owner, which might not be easy to obtain seeing as they’re now responsible for the permit costs (plus any other penalties and interest). If they are unwilling to assist, you may still be required to pay the fee yourself. It’s definitely in your best interest to go over the disclosure statement with a fine toothcomb before buying to avoid any future legal woes!
Legal issues aside, the exclusion of construction permits is also a potential safety hazard. If the previous owners never bothered to get permits, they also might not have cared who did the work. Construction codes are updated all the time and your home’s additions may not be up to date. Additionally, if a county inspector drops by and sees your home is not up to code, they can come in like a wrecking ball and demolish the unpermitted additions. No one wants to say goodbye to that beautiful third bathroom! Not to sound like a recording on repeat but… make sure you have those permits. Demolitions are heart achingly costly.
Are there any upsides to not double, triple, quadruple checking for permits? I mean sure, no permits means you can always negotiate a lower price for your home, but after reading all the above, is it really worth it? Thankfully most agents take it upon themselves to check the county records for permits but it never hurts for you to be aware as well!