Question:
“Hi Gary. My wife and I looked at a house that was perfect for us, but the family room didn’t have a city permit. What’s the risk of not having a permit?
Answer:
Four factors determine how concerned you should be about un-permitted work:
- What is it?
- Workmanship & code compliance
- Effect on resale
- Possible future requirement to permit or remove
1. What is it?
I wouldn’t sweat an un-permitted patio cover, small deck, or even a professionally done kitchen remodel. Few people pull permits for them. But a family room addition or extensive electrical work is more significant and cause for concern.
2. Workmanship & Code Compliance
As always, hire a professional home inspector. Ask him to look extra closely at un-permitted items. Many are fine, but others are weekend projects by unskilled parties. If well-built but not code-compliant, you could still face problems in #4 below.
3. Effect on Resale
If you know about it, you must disclose un-permitted work when you sell. There’s no guideline, but my rough rule of thumb is: if it’s well-built, an un-permitted room is worth 50% of a permitted room. Obviously, that means it should have the same impact on what price you’ll pay now.
4. Possible Future Requirement to Permit or Remove
The city rarely hears about un-permitted additions unless a neighbor complains or a city inspector notices it (usually when checking other work you ARE permitting). Once aware, they make you remove or permit the work. Permitting means you’ll pay penalties (I know YOU didn’t build it, but the city doesn’t care!) and bring it up to current code, which could be easy or costly.
…After reading what I just wrote, you might accuse me of being just a tad wordy, so let me simplify:
When buying…
- Don’t sweat minor un-permitted items (provided they’re to code).
- Decrease your offer by about 50% of the added value of an un-permitted room.
- Have it inspected. If poorly built, ask the seller to credit you the cost of bringing it up to standard.
