Thanks to the bonus rooms and the finished basement, we found a home to check out almost every box, with great location, perfect size and even a bit of extra space. But then the agent removes the news. These additions are not permitted.
Now you’re wondering, is buying an additional house that is not permitted to be a contract breaker or just a road bump?
You are not alone in asking this. Unauthorized jobs are more common than you think, and although it’s not necessarily a red flag, you can get some headaches. Let’s walk through what it really means and how you can move forward smartly.
What are unauthorized additions?
An unauthorized addition is any type of renovation, modification, or structural change made without approval from the local building department. This could mean that the homeowner pulls permission for the building, didn’t schedule an inspection, or didn’t know that they needed permission in the first place.
Even if the work appears beautiful and professional, there is no official confirmation that it meets safety or local building standards without permission.
Conversely, not all projects require permission. Cosmetic updates, such as painting, replacing flooring, installing new cabinets, and replacing lighting fixtures, typically do not require approval.
The key difference is whether the work involves structural changes or systems such as electricity and plumbing. When a project impacts these core components, it is usually time to call your local permitting office.
Why does the house have an unauthorized addition?
That’s a fair question. Why does someone skip the permission process in the first place?
In many situations, it’s not about cutting corners in the shade. Many homeowners simply don’t realize that certain projects require permission.
For example, moving out the outlet or replacing the water heater may seem like a basic upgrade, but in many cases it requires official approval from the city or county.
Sometimes, homeowners hire unlicensed contractors who do not obtain the necessary permits. In other cases, the work was done several years ago, and building regulations could be less strict or less implemented.
In addition, homeowners may intentionally skip permissions to save time or money. It could be a quick DIY project you want to complete before selling, avoiding delays and fees from inspections and documents. This may seem convenient at first, but it can lead to major issues in the future, especially for buyers.
General raw additions
When you’re a home hunt, we recommend keeping an eye on some of these often unauthorized additions:
Garage Conversion: Where space has been transformed into a bedroom, office, or small apartment. Completed Basement or Attic: Convert these spaces into living areas or rental units, especially if they include bathrooms and kitchens. Extra room or bump out: Think of something like a sunroom or an extended kitchen. Decks and Patio: Build a large outdoor living space without city inspection, especially if wired for electricity. Electrical or plumbing work: Upgrades or relocations not signed off by licensed professionals. Accessory Residential Unit (ADU): A guesthouse or in-law suite constructed in violation of zoning or permitting laws.
Knowing the risk of buying a house with unauthorized additional
Here it is important to really think about whether it is comfortable to buy an additional home that is not permitted. Unauthorized work can affect everything from your finances to your home’s future plans.
Before making your offer, be aware of these potential risks associated with unauthorized additions.
Legal and Financial Risks
When you buy a home, you also take on the history. That includes additions and changes that are not officially approved. If a city or county discovers work that is not permitted later, they may be fined or required to completely remove the structure. In some cases, you may be forced to bring the work into the code, which can be expensive and time-consuming.
Even if the addition looks good, failing to have proper record approval can affect the legality of the structure. Additionally, what you can do with the property in the future may be limited, especially when expanding or modifying.
Insurance and Financing Challenges
Before you close your home, your lender will probably send an appraiser to confirm the value of your home. If they notice any unauthorized additions, it may undermine the value of the home or deny the loan. Lenders don’t like uncertainty and unapproved jobs add risk.
Insurance can also be a problem. If something goes wrong, like a fire that begins with an unauthorized electrical system, your insurance provider may deny your claim, even if you have fire insurance. Even if they cover the case, they can raise your premiums or exclude certain areas of your home from future coverage.
3. Resale Issues
Fast forward when you’re ready to sell. That same unauthorized space can make it difficult to attract buyers. Many people don’t want to deal with the extra steps and risks involved. Even if they are open to it, the value of your home can be affected.
Unauthorized additions can raise concerns about sellers’ disclosure. If you don’t talk about it to the next buyer and find out later, you may face legal consequences of not being transparent.
4. Safety concerns
One of the most important things to consider with unauthorized additions is whether the work was done safely. Without a license and a home inspection, there is no guarantee that the construction meets local building or safety standards. This can make you vulnerable to hidden dangers that are not obvious during your walkthrough.
It may be addressing false wiring that can increase the risk of fire, plumbing that is not properly vented, or framing that cannot support the weight of the structure. These types of problems often occur unnoticed until you start living in the space and something goes wrong. At that point, repairs are expensive and destructive.
Safety must always be a top priority when buying a home, and unauthorized jobs add a layer of uncertainty that is worth thoroughly researching before making a decision.
How to determine if there are unauthorized additions in your home
Finding unauthorized additions is not always easy, especially when the work appears to be clean and professionally finished. However, there are some indications and steps to determine whether a space may have been added or changed without proper approval.
Compare the list with public records
Start by checking the area and number of rooms listed online against your local property records. If the house is advertised as having a completed basement, bonus rooms, or extra bathroom that doesn’t appear in official records, it could be a red flag.
Property records are generally accessible online or via the city or county assessor’s office.
Please check disclosure
Most sellers should legally provide a disclosure form that outlines known issues with the property, including work that is not permitted. Look for mentions of additions, structural changes or modifications. If this section is left blank or ambiguous, that may be the reason for asking more questions.
Find visual clues
Sometimes you can find clues just by walking around the house. Please note:
Rooms that feel floor or ceiling height that does not match the rest of the windows and doors of the house that appear strangely shaped or have different floors
These can be indications of a do-it-yourself structure that may not follow the code.
Ask the seller and agent directly
There’s no problem asking in advance. A good listing agent needs to know if an addition has been made and if the permit has been pulled. If the seller is unsure, that’s another reason to do a little extra drilling.
Ask me to see the blueprint
If the seller has an original blueprint or architectural drawing, reviewing them will help you clarify what was originally approved for the property. The big difference between these plans and current layouts may indicate changes made later, perhaps without permission.
Ask the appraiser
Appraisers often notice changes to homes that do not match or appear to be unusual with official records. If you flag something that appears to have been added or changed without proper documentation, it’s worth investigating further. Although the appraiser cannot determine the status of the permit, their observations will help guide you on your next step.
Request a license record
The local building department maintains records of permits submitted at each address. You can contact them directly and ask for a history of permissions related to your home. If you don’t have a major job permit, but the home has obviously recent upgrades, it may confirm your suspicions.
I’ll take the inspector of the house
A proper home inspector is trained to notice what others have overlooked. If they suspect jobs that are not permitted, they can let you know and recommend the next step. In some cases, they may even advise bringing in a licensed contractor or structural engineer for a second opinion.
How to protect yourself if your home has unauthorized additions
So you love the house and want to see if it’s still a smart purchase. Before you make an offer, here are a few steps.
Negotiate with the seller
Seller:
By obtaining permission, we will disclose any unprocessed work that has been remedied or altered the issue before closing.
Please consult a real estate lawyer
Legal advice is invaluable when assessing your liability for purchasing a home with unauthorized additional items. A real estate attorney will help you understand your liability and whether the risk is worth taking.
Please contact your insurance provider
Make sure your home insurance covers all areas of your home, including any unenrolled additions.
I’m off the sale
If the seller refuses to address the issue or adjust the price, walking away may be the best option. To do this smoothly, check your purchase agreement for inspections or emergency clauses that can be backed out without penalty. Communicate clearly with your agents and sellers about your concerns.
That’s a shame, but you can stay apart and focus on finding a home that will protect you from unexpected costs and legal risks and suit your needs and budget.
Should I buy an additional home that is not permitted?
Not all unauthorized additions are deal breakers. Here are some cases where it could still be a good investment:
The addition is professional and easily brought into code that either passes the inspection or plans to modify or remove the addition.
If you own the right team and understand what you’re into, even buying an additional home that isn’t allowed may work in your favour.
Buying a house with unauthorized additional: Please proceed with caution
Buying a home with an unauthorized addition is not necessarily a bad idea, but it requires additional hard work. Be prepared to investigate, negotiate, and potentially spend money to correct past mistakes.
Using the right team of experts, such as real estate agents, home inspectors, and lawyers, you can make informed decisions and avoid surprises.
FAQ for buying additional homes that are not permitted
Can I get a permit after construction?
Yes, this is called retroactive permission. The city may need to inspect work and require changes if it does not meet the code as well as paying fines or fees.
Can I sue a seller for work that is not permitted?
Perhaps if the seller intentionally fails to disclose it. Talk to a real estate attorney to explore your options.
Is the house inspector looking for jobs that are not permitted?
The home inspector can find signs of work that are not permitted, but will not confirm the permit. They flag anything that has been abnormal or inadequately done and recommend further investigation.
How can a homeowner disclose jobs that are not permitted?
They should list it on the seller’s disclosure form and pay attention to what is done and it is not permitted.
