Question:
“Hi Gary. We’re interested in a home that has an unpermitted family room and I have several questions: Can I go to city to investigate it? Who should I talk to find out the cost to get up to permit status? What happens if I can’t get it permitted? Can I get a permit during escrow? Can I get title insurance? How will an appraiser treat it?”
Answer:
Wow…LOTS of great questions.
I’ll answer them one at a time. Keep in mind that minor unpermitted work (e.g. patio cover) is rarely an issue:
1. Can I go to city to investigate it?
Yes. You’ll need the seller’s signature on a specific form authorizing you to have the city check permits for you.
2. Who should I talk to find out the cost to get up to permit status?
I know a great consultant who specializes is exactly that. Call me for his number.
3. What happens if I can’t get the addition permitted?
Not necessarily anything. It can be an issue if you do other work on the home requiring a permit or someone complains to the city about the addition (rare). Of course, you must disclose the lack of permits when you sell the home down the line.
4. Can I get a permit during escrow?
I’d plan on getting it after you own the home. Getting a permit can be a slow, painful process and few sellers would want to go through the time or trouble.
5. Can I get title insurance?
Unpermitted additions aren’t relevant to title insurance unless perhaps an addition is built over the property line.
6. How will an appraiser treat the unpermitted room?
Appraisers have shared varying opinions with me. Some say they give unpermitted additions no value, while others have said if the addition is built well they give it partial value. However, if the addition is substandard construction or appears unsafe, there could be issues.
Hope that helps!
