New homebuyer must fix old illegal work

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Dear Real Estate Adviser,
I bought a home six years ago. Now, I’m told certain additions were made without building permits and I must either have the work removed or get permits after the fact. This construction was done well before I purchased the house, yet no one told me about it before I bought. What can I do?
— Sylvia

Dear Sylvia,
Unfortunately, laws do not favor homeowners who were victimized in such a manner. Fairly or unfairly, municipalities and counties place the responsibility for unpermitted work directly on a property’s present owner. This is true even when it’s obvious the illegal work was done years ago by a different owner.

Why is this? It’s all about money and leverage, not surprisingly. As you can imagine, the odds of getting the present and more fearful occupants of a home to pay the permit piper are far greater.

I’ve received an inordinate number of letters like yours over the past few years, which indicates revenue-starved taxing authorities are aggressively scraping for every possible dime of income.

In fact, the act of “checking for unpermitted construction” will go on my next list of the most commonly overlooked due diligence “musts” in evaluating a residential property, right behind “conducting neighborhood sex-offender search.”

The permit issue is just one reason serious homebuyers should hire a home inspector and/or appraiser in addition to enlisting a buyer’s agent. One of the three should, at least hypothetically, be able to spot such unpermitted work, particularly if the square footage doesn’t match the tax assessor records.

Of course, by not noting the work in the “disclosure” section of your sales contract six years ago, the seller deceived you. So, you could try to seek civil redress. However, in most states there’s a limit of one or two years after closing in which a seller can be held liable for intentionally incomplete or misleading disclosure. Check with a real estate attorney or similarly qualified professional on this.

It’s always interesting to see how unpermitted work is discovered. From my days of prowling city halls as a daily beat reporter, I learned that many, if not most, of these tips come from angry real estate agents whose interests were not served in a transaction.

Other tips come from a contractor who lost out on a job bid to a cheaper rival contractor, or neighbors who had an ax to grind with the current residents — even if they got along fine with the previous residents. By the way, these days just about every tip (“complaint”) gets investigated by city or county code enforcers.

In many cases, some higher-quality below-board work is done to quicken the construction process — or in the case of California, to prevent property taxes from spiking disproportionately well beyond the actual value of a new addition.

None of this is to downplay the importance of safety in permitted work. Poor wiring, inadequate ventilation, and additions with poor support or without exits or windows can pose fire and safety threats. Poor work also can led to a potential homeowners insurance snafu, as well as legal and resale challenges, which in this case have been passed on to you.

As you noted, the work on your place will have to be brought up to present code standards. But unlike permitted work, which is typically grandfathered in after codes are updated, the illegal additions to your place will have to be done to 2010 code, which could add even more cost.

Homebuyers, check for illegal additions, please!

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