It happens more often than you probably think; and now, it’s happening to you, just when you’re trying to sell your property. You’ve found there’s an “open permit” or improvements have been done without a building permit. It does occur periodically, the last owners had some work done in the home and did not get a remodeling permit or you had a contractor put in some upgrades and the contractor did not “close” the permit; worse yet, did not get one at all.
Of course, not having the necessary legal documentation, makes selling your home practically impossible. If you conveniently forget to disclose this information to the buyer, you could very well be looking at a cumbersome lawsuit. Conversely, if you disclose the fact there’s an open permit or unpermitted work, otherwise interested parties will expect you to take care of the problem, not them.
Practically any way you slice it, it will be your responsibility to clean up this mess. The cost to get a backdated permit will be far less than the price you pay to try and get around the situation.
Getting a Backdated Building Permit
First of all, you’ll have to determine which entities are responsible for issuing such documents. Depending on the city you live in, it could be just the municipality. Other areas might require a work permit from both the city and the county. Expect not only to pay the price for the necessary documents, but fees as well. You also might be required to pay a civil penalty for unauthorized work.
“When homeowners take on a remodeling project, they’re often far more focused on choosing glistening fixtures for a new bathroom or debating the type of granite to use on a kitchen countertop than, say, navigating the intricacies of the building permit process. That could be a huge mistake, however, and it may not even come to light until the house is put up for sale. Ignoring local approval requirements not only poses safety and legal problems but also can potentially derail an otherwise smooth sale.” —Realtor Magazine
However, money isn’t going to be the entire solution. The entities which issue these documents might want to have them inspected. Should there be a problem, you’ll also be on the hook for making it right. For instance, if there’s a problem with electrical wiring, you’ll have to hire a licensed electrician to redo the work in an acceptable way.
After any problems are discovered, and corrected, the work will be re inspected to pass for approval. Unfortunately, this process could take several weeks to finally resolve. Meaning of course, you won’t be able to actively market your property during this time.
Who’s Responsible for Unpermitted Work
The time and effort might be more than you bargained for, that is, if you purchased the home from a previous owner who failed to disclose the unauthorized improvements. The city and/or county departments might go so far as to order the features be completely removed. Though this is rare, it does happen.
The real question comes down to who will pay for the necessary costs to make everything legal so you can sell your home? Unfortunately, there’s not a clear-cut answer, but there are options:
- Dig-up the old sales contract and review it carefully. If the work was not included in the disclosure statement, the previous owners might be liable to pay the costs. Of course, this will mean hiring an attorney, but depending on the amount, it might be worth it.
- Look at your title insurance documents. While standard title insurance does not protect you against unpermitted work, if you have a premium policy or special endorsements, you might be protected.
- Cover the associated costs yourself. Though this is probably the last thing you’ll want to do, it will resolve the issue so you can sell the home without taking a huge risk.