Buying a House Without Required Work Permits: What to Know

Searching for a home over the last few years has been challenging. With so few homes for sale, buyers were often caught in bidding wars to land their dream homes.

One of the challenges in this environment has been buyers purchasing homes that are sold as-is.

In a seller's market, buyers often purchase homes that have warts. The home inspection is often skipped, leading to problems not being discovered until buyers move into the property.

An additional problem is nobody checking whether the seller has pulled appropriate building permits. Buyers are often stuck with unpermitted work that was required.

Sometimes, a buyer will be caught with their pants down and dealing with shoddy workmanship.

What Buyers Should Know About Unpermitted Home Improvements

There are several things buyers should know about buying a home without required permits. Let's have a look.

What Home Improvements Require a Building Permit?

Most of the time, any home improvements that affect a property's safety or structural integrity will require an application with the local building department for permits.

Permits are typically required for electrical work, plumbing, foundations, roofs, and walls.

Any renovations that may lead to changes in the home’s footprint, such as additions, will also require permits.

In some cases, even minor projects such as replacing windows or installing a fence may require a permit.

It’s essential to speak to the local building authority to determine which projects require permits. Homeowners should also research the building codes in their area to ensure that the permit process is followed.

Reputable contractors will usually apply for permits without being asked. Those who don't typically don't have great reputations.

What Happens if You Don’t Have the Required Permits?

If a homeowner decides to skip the permit process, they may be subject to significant fines and other penalties.

Depending on the severity of the violation, a homeowner could face fines of up to $1000 or more.

In some cases, local governments may even force a homeowner to tear down structures built without permits. In one of the communities I service in Massachusetts, that's exactly what they will do.

Additionally, homeowners may find it difficult to sell their home if it has unpermitted work.

It’s vital to understand that permits are required for a reason—to protect the safety and integrity of the home. You may be liable for any damages due to this negligence without the proper permits.

Why Do Homeowners Skip Out on Permits, to Begin With?

Homeowners may decide to skip out on obtaining permits for a variety of reasons. The most common is to save time and money. The homeowner can start construction immediately without going through the permit process and avoid paying any permit fees.

Another reason is to avoid increased property taxes. Some municipalities will increase a property's assessed value after renovations are completed. This can result in higher taxes for the homeowner.

The taxes can increase significantly, especially when the owner is doing a significant renovation, such as finishing their basement or adding another bedroom.

Finally, some homeowners lack knowledge of the permitting process and are unaware of the risks of violating permits. Without the proper research and education, they may be unaware of the potential consequences they can face.

How Can Buyers Find Out if Appropriate Building Permits Were Pulled?

Buyers or real estate agents can visit the local building department to ensure permits are pulled.

The building department will maintain records of all issued permits for a specific property. Whether there were recent improvements, you can check whether permits were pulled.

Sometimes, a buyer can also review the seller’s disclosure documents to determine if permits were pulled. The disclosure documents should list any required permits and if they were obtained.

Of course, doing this is less reliable as the owner may not be honest when answering the question or intentionally leave it blank.

Before heading to the town hall, a buyer can request that the seller provide proof of permits for any work completed. This could include copies of the permit paperwork and any inspection reports.

Finally, the buyer can hire a home inspector to examine the property and check for potential violations. The inspector can provide an assessment of the work completed and make sure it was done in compliance with local regulations.

How to Deal With Unpermitted Work as a Buyer?

As a buyer, taking the necessary steps to address unpermitted work is crucial. The first step should be to request that the seller obtain all necessary permits for the work that has been done.

This should be done before closing, as permits may be required for the sale to be approved.

The process will be for the seller to have each construction phase inspected. For example, if the owner did electrical and plumbing work, each inspector employed by the city of the town must inspect these items.

A final check with be done by the primary town inspector who oversees everything. The town will also want the assessor to visit to ensure the owner pays their fair share of property taxes.

You can expect the property tax assessment to increase once the permitting has been completed.

Buyers should request a copy of the occupancy permit for the respective work.

When buyers do not ask the seller to get the required permits, they take on the risk of not having them.

Without proper permits, the buyer can potentially deal with the issue when selling the property.

Final Thoughts on Getting Permits as a Buyer

When they discover unpermitted work, the most prudent thing a buyer can do is ask a seller to remedy it. Without permits, buyers open themselves up to liability, shoddy workmanship, and potential issues in the future.