So you’ve found the home of your dreams – or you’re selling your home – and it has unpermitted work done on it. What to do?
First of all, unpermitted work is when construction has been done on a home that doesn’t have the necessary permits to make it legal. The work can include most components of the home—electrical, plumbing, structural, etc. Some of the most common examples of this can be found in additions to homes and finished basements.
My advice to buyers and sellers in my 30 years of experience in Real Estate?
Always get the proper permits and observe your local regulations when it comes to home improvements. Not obtaining the proper permissions and documentations can not only prove to be time-consuming, but it can also be dangerous, too!
Keep in mind that the rules for permits change based on location, too – so where you may require a permit for one job in one municipality, you may not require the same in another.
So why do people do work without permits?
Some homeowners simply may not be aware of the requirement for a permit, but the reality is, many will skip the step in order to save time and money. However – not so fast!
What they don’t realize is that by skipping this vital step, you can end up paying a lot more money down the road (not to mention, there is a possibility of putting yourself and others in danger).
This is short-term thinking – with long-term consequences!
You’re looking at a home, and it completely ‘fits the bill’ – except one catch. It has unpermitted work.
It can be tempting, as a home with unpermitted work will often end up selling cheaper than their equivalents with permits.
But – remember that there are a lot of risks associated with doing so. Here’s what you need to know!
It will now be your responsibility, and you can still be penalized
Local home inspectors will sometimes come down on homeowners who have unpermitted work done on their homes; and this could entail that they force you to remove your entire project, or even pay taxes on the difference. Your homeowner’s policy might not cover these additions, and mortgage companies can even require an immediate loan repayment!
Your Options as a Buyer
You have a few choices as a savvy buyer; ones I can help guide you through. You could request the seller fix the issue or simply take the deal, or move on.
Perhaps you have been aware of the unpermitted work in your home, or you might be one of the few who discover it when it’s time to sell.
First of all, you’ll want to determine if there is indeed unpermitted work in your home. Find the original blueprints and check them against your current one. If you can’t find these easily, you might be able to access them via the city. Questions about finding these in Greater Vancouver? Be sure to contact us!
Have unpermitted work? Decide if you’ll sell as-is, or get a permit.
If you decide to sell as-is, you’ll often have to offer quite a severe price reduction.
But most importantly – you must disclose the non-permitted work! Not disclosing it can put you in danger of a lawsuit and is unfair to the new buyers.
If you don’t want to take a price cut, it might be worth looking at applying for the permits and seeing what the costs are and what the timeline is. Depending on the area you live in, obtaining the quotes and processes (including the final inspections) will be a process – we can help point you in the right direction with this. Keep in mind that it’s possible that the ultimate costs of this could be even higher than your price reduction for the unpermitted work, too.
If you don’t want problems down the line – be sure to always obtain the proper permits for your home improvements. Before you make any changes to your property, you’ll always want to educate yourself on your local regulations, and be sure to only hire professionals with high-standing reputations who only work with the correct permits and documentation.
However, these instances of buying or selling a home with unpermitted home do occur – and there’s always a solution. We’re here to help you find the one that works for you!
Questions? Don't hesitate to get in touch!
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RE/MAX Michael Cowling & Associates