Unpermitted Additions: Here’s What You Need to Know Before Buying a Home with DIY Renovations
Discovering your dream home has unpermitted additions can be a headache for buyers, but it doesn’t always have to be a home sale killer.
Disclaimer: This article is meant to be used for educational purposes only and is not intended to be construed as financial or legal advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.
Imagine you’ve found your dream home — it has the perfect amount of space for your family, large windows that let in morning light, and a backyard patio with plenty of space for entertaining on warm summer evenings.
But, when your inspector goes through the home, they notice that the siding in the back is a slightly different shade than the rest of the house. They check the property records with the city and tell you that they suspect one of the rooms is an unpermitted addition.
What should I do now? Is it safe to buy a home with unpermitted work?
Unpermitted additions are a fairly common, and slightly alarming, hiccup when it comes to buying a home. If you’ve encountered one in your home search, you might be wondering what your next steps should be. We’ve talked to an expert real estate agent and home inspectors to better understand what an unpermitted addition is and what it means for homebuyers. Let’s dive in.
Find A Buyer’s Agent To Navigate Buying a Home With Unpermitted Additions
If you are considering buying a home that has unpermitted additions, an expert buyer’s agent can help you navigate the risks to protect both yourself and your budget.
What is an unpermitted addition?
Unpermitted additions include any form of remodel or renovation on a home where the owners did not obtain the proper permits from the city’s building department, even though a permit was required to begin work.
Little projects like painting or updating flooring don’t require permits, but most larger-scale projects do.
A wide range of home features could be considered unpermitted additions. Large-scale remodels, like adding a bathroom or another bedroom, are examples of projects that could be unpermitted additions if the owners completed this work without obtaining permits. As a general rule, any project that makes a change to the electrical and plumbing systems or the structure of the home needs a permit.
However, smaller projects like replacing gutters or adding a fence could also be considered unpermitted additions if your area’s zoning or building boards require owners to acquire a permit before beginning construction.
“It can be as little a thing as someone building a barbecue area in the backyard, to a full room addition,” says Edward Kaminsky, a top real estate agent who sells 66% more single family homes than the average agent in Manhattan Beach, California.
“I have seen numerous unpermitted additions,” added Mike Powell, P.E., CPI, a home inspector and structural engineer with the Tampa Bay-based Red Flag Home Inspection, LLC.
In some areas, unpermitted work is a bigger deal than in others. Homes built in earthquake zones, or in areas where hurricanes are common, likely have to conform to higher local building code standards to ensure that they can withstand natural disasters.
“The topic of unpermitted construction plays a pretty heavy role here in Florida, due to our wind-code requirements,” Powell says. “Building codes are minimum standards that ensure public health and safety. In construction, they also uphold the integrity of the installation and ensure items will hold up to the regional environment.”
Why would a home have unpermitted work?
Usually, homeowners think about the additions they make to their home as adding value, and therefore don’t think through the consequences of carrying out unpermitted work. If the seller is a confident DIY-er or a contractor, they may forgo pulling permits before updating a bathroom or putting up a fence.
“Some homeowners think that they’re going to keep their home forever and therefore doing work without a permit doesn’t seem like a big issue, but problems can arise for them later when they eventually decide to sell,” says home inspector Danny Smith, CEO of Semper Fi Home Inspections.
In other cases, a homeowner might not have known that they needed a permit to complete the work. What seems like a simple DIY project that could be completed in a weekend may require a permit in some municipalities.
Take window replacements as an example — it may seem like an easy project, but area zoning and building codes may consider it a structural change, especially if you plan on replacing more than one.
Common unpermitted additions
Anything from adding a deck or patio space to increasing the number of bedrooms or bathrooms in a home could be an unpermitted addition. Let’s take a look at some of the most common ones.
- Finishing a basement
- Finishing or converting a garage
- Adding a bedroom or home office
- Adding additional bathrooms
- Turning a partially-screened porch into a sunroom
- Some window replacements
Risks of buying a home with unpermitted additions
Buying a home with unpermitted additions can come with a number of risks. Kaminsky advises buyers to carefully think through whether they feel comfortable purchasing a home with unpermitted additions.
Before you jump in and make an offer, it’s important to consider the following scenarios:
You might have to tear the structure down
Having to tear down the addition and build a new, up-to-code replacement is by far the biggest risk buyers face when buying a house with unpermitted additions. Buyers can often apply for a permit for the addition after it’s completed. However, if the city inspects the new room and finds it’s not up to code, they will likely ask the buyer to tear it down.
“Worst case scenario, the city says no on the permit and you must have it removed,” Kaminsky says.
Tearing down and rebuilding a new addition can come with a hefty price tag. Though costs will vary based on the scope of the project, rebuilding a whole room can cost as much as $21,946 to $83,320.
Mortgage troubles
In some cases, mortgage companies will agree to finance a home with unpermitted additions so long as there’s a plan to bring the home up to code either before or after closing, according to Smith. But if the addition was so poorly constructed that it’s a safety hazard, or if it can’t be easily fixed, then your lender may refuse to finance the purchase.
Don’t think about trying to hide the unpermitted addition from your lender, either. If you knowingly purchase a home with unpermitted work and hide it from them, they could “call” your loan or demand payment in full. These situations are rare, but they’re not worth the risk in any scenario.
