Falling in love with a home that boasts a fantastic addition, only to later discover that it was renovated without obtaining the necessary permits, can be a daunting prospect. It’s essential to understand the potential consequences of buying a home that has undergone unauthorized remodeling.
The Appraisal
When it comes to appraising a home, only the square footage that is properly permitted is considered. If an addition, such as a 10×10 living area, was built without obtaining the necessary permit, the appraiser will not account for that additional space in their estimate. This shortfall could impact your ability to secure a mortgage loan.
Insurance Coverage
If the renovation work was not performed correctly or up to the latest safety codes, a homeowner’s insurance policy may not cover damage costs in the event of an electrical fire or other disaster.
Obtaining a Permit Post-fact
In some cases, a seller may be able to obtain a permit for work that was done without proper approval, but this is not always possible. If the contractor who completed the work is no longer in business, the seller would need to hire an architect to draw up the plans and have them reviewed by the relevant municipality. This process can be both costly and time-consuming.
City Intervention
Even if a seller is able to obtain a permit post-facto, city codes in some locations may require inspections. For example, framing inspections are particularly common. In some cases, the homeowner may be forced by the city to tear down drywall for proper inspection, leading to costly repairs and additional materials.
In conclusion, buying a home that was renovated without proper permits can present challenges and unexpected issues. Carefully consider your level of commitment to the property and the time and money you are willing to invest before accepting these additional hurdles.
