Featuring America's Home Inspector: Nationally Syndicated Columnist, Barry Stone

Another House With An Unpermitted Addition

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:   You’ve written before about additions that are not permitted, and now we’ve bought a house that has that problem. No one told us about this before we bought the property, and now we’re stuck. Realistically, what can we do? Should we tear down the addition and rebuilt is with a permit? If so, who is liable for the costs, the seller, the agent, or home inspector, or all of the above?  Joanna

Dear Joanna:  If the quality of the unpermitted construction is reasonably good, an as-built permit is probably the best course. An as-built permit can be obtained from the building department. A municipal inspector will come to your home to evaluate the work. If the additions are approved, you can try to recover the permit costs from the sellers. If the work is not approved, the inspector will provide a list of improvements to be made to obtain approval. Worst case scenario would be that the work is so substandard that the building authority orders demolition of the addition.

Regardless of the outcome, the sellers should have disclosed that the additions were not permitted. However, it is also possible that the additions were built before the sellers owned the property and that they were unaware of the lack of permits. Therefore, it is important to determine when the additions were built. If the sellers were aware of the unpermitted additions, they should be liable for the costs to remedy the situation. Unfortunately, you might have to hire an attorney to enforce that liability.

In most cases, Realtors are not qualified to identify which portions of a building are original and which are added, unless they are given that information by the sellers.

Whether your home inspector is liable for professional negligence depends on whether pertinent defects involving the additions were visible and accessible at the time of the inspection. 

Buyer Worried About Nonpermitted Fixtures

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry:The home I am buying has fixtures that were installed by the sellers themselves, without permits. These include the 8-year-old heating and air conditioning system and the 10-year-old water heater. Should I accept these fixtures as they are or should I insist that they be permitted?  Susan

Dear Susan:  If the HVAC system and water heater were installed without permits, and particularly if they were installed by nonprofessionals, it is almost certain that they are not installed to code, and this could involve significant safety violations. The fixtures should be evaluated by a licensed plumbing and HVAC contractor, as well as by your home inspector, to verify the safety and integrity of these systems. If problems are found, you should request that the sellers make all necessary repairs.

The 10-year-old water heater is already past its expected useful life and will probably need replacement soon. Therefore, obtaining a permit at this late date is not a critical issue. The 8-year-old HVAC system, on the other hand, should still have years of remaining useful life. Therefore, it is recommended that an as-built permit be obtained for this system to enable the building department to inspect and approve the installation.

Buyers Dismayed By Unsigned Building Permit

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: We bought our home about four months ago, and now have a big, undisclosed problem. The house is very old and was completely renovated; not by the person who sold us the property, but two owners previous to them. Our Realtor advised us to check for permits at the city hall, which we did. The city showed us copies of permits for the electrical, plumbing, and mechanical work. But we did not notice the absence of signatures on the permit records. We didn’t know that people could apply for permits and never call for inspections. Our second mistake was buying the property without hiring a home inspector. We’d like to blame someone for this mess, but I suppose the lesson here is “buyer beware”. What should we do to get all of this straightened out?  Alison

Dear Alison: Some home inspectors routinely advise buyers to verify the sign-off on building permits. This is because many people have taken out permits for additions, renovations, remodels, and even new construction, without ever calling for an inspection. Municipal building departments don’t check up on every property that has an outstanding permit because many permits are issued without work ever being done. This makes covert work, without inspections or signoffs, an easy sleight of hand. Unfortunately, the victims are the unsuspecting buyers who are easily fooled by the display of an unsigned permit.

At this point, you need to know what is right or wrong with the work that was done. A qualified home inspector can help you find those answers. This, of course, should have been done before you purchased the property. Unfortunately, too many buyers find reasons not to hire a home inspector.

After you review the findings of the home inspection, arrange for the building department to inspect and approve the renovations. But be prepared for anything. This process could be quick and easy, or it could be complicated and expensive, depending on the style and approach of the municipal inspector. For example, the inspector could order you to remove drywall to expose the piping and wiring within the walls. Hopefully, the corrective work, if any, will not be too costly or involved.

After the corrections are completed and signed off, you’ll know that the renovations are safe and in compliance with code. When you eventually sell the property, you can do so without fear of undisclosed defects.

How to Disclose “No Building Permits”

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: We just listed our home for sale and are worried about disclosure liability. In the past year, our home has been completely remodeled without building permits. Some of your articles have stressed the importance of disclosing non-permitted work. We plan to follow your advice but are worried that this may not eliminate our liability. What can we do to sell our home without problems turning up later?  Eugene

Dear Eugene: You are wise to approach this issue with caution and concern. In today’s business world, liability lurks around every corner. We can be sued for doing something wrong or doing nothing wrong, and in either case, attorneys are waiting to be hired. Liability can never be fully eliminated, but it can definitely be reduced, and real estate disclosure is a sure way to practice this principle.

When selling a home, every defect you disclose is removed from the list of potential liabilities. But beware: With non-permitted additions and alterations, the ways that you frame your disclosures can make a critical difference. Many sellers make a fatal mistake at this point in their transaction. Instead of simply declaring that the work was done without permits, they state or infer that the work was all done “according to code.” Disclosures of that kind are often made with utmost sincerity, but with little or no actual knowledge of building codes.

Sellers who are not professional contractors, building inspectors, or architects have no idea whether improvements were done according to code. The code books are voluminous, exhaustively complicated, and not easily understood by persons outside of the construction professions.

When you disclose that work was done without permits, you should state that “no guaranty is made regarding compliance with building codes.” You should also recommend that buyers hire a qualified home inspector to evaluate the condition of the improvements, as well as the rest of the property. With that kind of disclosure, you should be reasonably safe from complaints after the close of escrow.

As-Built Permits for Sellers

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: In past articles you’ve mentioned “as-built permits” for additions and alterations that were done without building permits. I have a property that was totally renovated — new electrical, plumbing, heating, and roof — all done without permits. I’m going to list the property for sale and want to know if an as-built permit is a good idea before I sell. Could you explain how this works?  Lou

Dear Lou: When you sell a home with non-permitted alterations, you have two choices: You can sell it “as is”, but with full disclosure of non-permitted work, or you can get an as-built permit and, hopefully, make everything legal. But before you apply for an as-built permit, you should be aware of the pros and cons.

Most building departments offer as-built permits as a way to bring maverick additions and alterations into legal conformity. On its face, the concept is quite simple: You submit a set of plans to the building official with an application for a building permit. With a normal building permit, you obtain permission to perform work. With an as-built permit, you seek approval for work that was already completed, to be sure that it complies with the building code. If the proposed plans conform with municipal standards, they are accepted, and a building inspection is scheduled. If the scope of work is not acceptable, the permit is denied, and the building official may order restoration of the building to its original state.

Examples of unacceptable changes would be additions that are too close to property lines, a garage conversion where enclosed parking is required, or a second living unit where single-family occupancy is the limit.

If the plans are approved, the next hurtle is the building inspection. In the best of cases, the building inspector performs a visual, walk-through inspection of the project area. If no building violations are found, the work is officially approved, and the completed work is given the same status as construction that was permitted in advance. In most cases, some code violations are cited, and a correction notice is given to the property owner. When faulty conditions are corrected, the property is reinspected, and final approval is given. But “cakewalk” approval of this kind is not always the case.

If the building inspector finds significant defects that warrant further evaluation, or if the inspector is overly committed to hardcore scrutiny, or if the inspector just happens to be having a bad-hair-day, you could incur demands that would make your head and pocketbook spin. For example, the inspector might order partial or total removal of drywall and other finish materials so that wiring, plumbing, and framing components can be inspected. Excavation of foundations or of buried utility lines might be ordered so that code compliance can be verified. If concealed deficiencies are found, the inspector could demand numerous upgrades and improvements or demolition of all completed work.

To prepare for this process, you should hire a qualified home inspector to perform a preliminary inspection. This will alert you to defects likely to be cited by the municipal inspector. With that information, you can make an educated choice between an as-built permit or disclosure of defects and of non-permitted work.