Permits are essential to ensure all work is up to code and meets safety requirements. Without the necessary permits, the homeowner risks facing various legal, financial, and structural problems.
Examples of unpermitted work can range from adding a new room or converting a garage into a living space. Some homeowners have also installed an unpermitted electrical system.
Although it may seem like a minor issue, unpermitted work can cause significant problems for homeowners and potential buyers.
Knowing the issues that can arise from selling a property with unpermitted modifications is the first step toward a successful sale.
Risks of Selling a House with Unpermitted Work
Selling a home with unpermitted work can be risky for various reasons, including legal, financial, and structural issues.
Legal Risks
Selling a home with unpermitted work can lead to legal risks for the homeowner.
A buyer may file a lawsuit against the seller, claiming they misrepresented the property’s condition. The local government may also issue a stop-work order or require the seller to remove the unpermitted work. Both are costly and time-consuming.
To mitigate these risks, homeowners must be transparent about unpermitted work when selling their homes.
Offering full disclosure and the potential risks can protect the seller from legal action and ensure a successful sale.
Working with a real estate agent or lawyer can be beneficial. They should have experience in unpermitted work cases. This will provide guidance and protection throughout the selling process.
Financial Risks
Before doing any unpermitted work on your home, sellers should understand there are financial risks as well.
The presence of unpermitted work can decrease the home’s value and make it more challenging to sell. Buyers may offer a lower price to compensate for those risks or request that the seller makes necessary repairs. If the seller must make those repairs, this is usually a contingency prior to closing.
These contingencies can affect the seller’s ability to sell the property, leading to a longer selling process.
If the unpermitted work must be removed, it can be expensive and time-consuming.
The seller may have to pay to remove the work or make costly repairs to bring the home up to code. This can further decrease the home’s value and lead to additional financial risks.
Homeowners must be aware of the financial risks associated with selling a home with unpermitted work. It is important to weigh out those prior to starting any work on your home.
Structural Risks
Not all contractors are the same. Licensed and insured contractors tend to be more expensive than someone who cannot offer those same guarantees.
Unpermitted work can also pose structural risks to your home. The work may not have been done to code, making it unsafe and potentially causing damage.
For example, an unpermitted electrical system can be a fire hazard. The same could be said about an unpermitted addition without the proper foundation, which may cause it to settle or collapse.
Solutions to Selling a House with Unpermitted Work
If you sell a home with unpermitted work, you have several options to mitigate the risks.
Get Permits Retroactively
One solution is to get permits retroactively for the unpermitted work. This involves applying for permits and inspecting the work to ensure it meets all safety requirements. While this can be time-consuming and costly, it can provide peace of mind and increase the value of your home.
Offer Disclosure
Another solution is to fully disclose the unpermitted work to potential buyers. Disclose the work in writing, including any potential risks, and have the buyer sign a disclosure form acknowledging the work’s existence.
While this option may deter some buyers, it can protect you from legal action and provide transparency and honesty.
Price the Home Accordingly
Pricing the home accordingly is another solution to selling a house with unpermitted work.
You can consult with a real estate agent to determine the fair market value of your home. They may take into account the unpermitted work’s potential risks and issues. This can attract buyers willing to make the necessary repairs.
Conclusion
Selling a house with unpermitted work can be challenging, but there are solutions to mitigate the risks involved.
Getting permits retroactively, offering disclosure, and pricing the home accordingly are all viable options. It is essential to be transparent and honest about the unpermitted work to avoid legal and financial issues down the road.
FAQs
- Can I sell my house without permits?
Selling a house without permits is possible, but it is not recommended. Unpermitted work can lead to legal and financial issues affecting the sale.
- What happens if unpermitted work is found during a home inspection?
If unpermitted work is found during a home inspection, the buyer may request that you make the necessary repairs or offer a lower price.
- Can a buyer sue the seller for unpermitted work?
Yes, a buyer can sue the seller for unpermitted work if they feel the seller misrepresented the property’s condition.
- What is the cost of obtaining retroactive permits?
The cost of obtaining retroactive permits can vary depending on the scope of the work involved and the local government’s fees.
- How can I find out if my house has unpermitted work?
You can check with the local government to see if any permits are on file for the work done on your home. Additionally, a home inspection can uncover any unpermitted work that may exist.
Note: This guide is for informational purposes only. Meridian Trust does not make any guarantees about the sufficiency of the content in or linked to from this blog post or that it is compliant with current law. The content within this blog post is not a substitute for legal advice or legal services. You should not rely on this information for any purpose without consulting a licensed lawyer in your area.
