What should you do if you purchased a home that was remodeled without permits? This is not an easy question to answer, and if you're really interested in a property, it pays to go into negotiations with your eyes wide open to the possible repercussions.
5 Reasons Why Homeowners Do Remodels Without Permits
There are several reasons for homeowners not to secure permits for their home improvements.
Remodeling permits can cost too much: Permits are typically based on the price of the project. Say you've built a new garage, estimated the cost to be about $6,000, and although your permit was only about $200, all of the costs add up and you decided to skip getting it.
Possible additional and unreasonable requirements: Some home owners say they've never met two township inspectors who agree on anything. Or worse, the building code is open to interpretation. For example, if a homeowner is planning to remodel a kitchen, the local code might require that the homeowner replaces an electrical box or makes some other type of improvement that could add hundreds of dollars to the job.
Remodeling permits can cause delays: Perhaps you are working on your new garage project, and you can't finish building it until the inspector comes out to sign off on the permit. In many townships the inspectors only work part time on specific days. If the inspector is running behind all of your work will have to come to a halt while you wait.
Permits are too much trouble to obtain: True, you have to go down to the township and apply, bring your building plans and get them approved. It's a hassle for some people, and many homeowners rather would just do the work and forget about a permit.
5 Problems Associated With Remodeling a Home Without a Permit
In general it’s a good idea to get a permit. Not just because it’s the right thing to do: here are some of the problems that could come back to haunt a homeowner who moves forward on a renovation or installation without a permit:
Non-permitted work might not be done correctly or to code: Just because a homeowner hires a contractor doesn't mean the contractor will do the job correctly. In addition, there is typically more than one way to do a job, and all of them could be wrong. What if your beautiful new deck, built incorrectly without permits, collapsed causing injury to your guests?
Homeowner's insurance might not cover a defect for non-permitted remodeling: If a remodel was done incorrectly and something happens; the damage caused by that fire might not be covered by a homeowner's insurance policy if the improvement was finished without a permit.
The township might require you to tear it out: Building code often requires that framing is inspected by the city prior to hanging drywall. To determine if studs were installed in a bathroom 16-inches on center, for example, an inspector might make a homeowner tear out the walls or at least cut the drywall to a allow the inspector to see behind the walls.
You might be assessed a penalty: If a permit seems expensive, wait until you get a bill for the fines and penalties for failure to obtain a permit. The job permit could cost you double the amount of the original permit fee or more.
Can the Seller Obtain a Building Permit After the Fact?
Yes! For instance a seller in Bedminster Township who had paid a contractor to obtain a permit for finishing their basement insisted there was a permit for the work, even though the County records obtained by the seller did not show any permits.
The Seller was able to work with the contractor to make the necessary adjustments like cutting drywall and exposing wiring and then come back to make the repairs after permitting was completed.
Luckily the original work had recently been done. Imagine the same scenario if the contractor was no longer in business! The homeowner would have had to pay for the work to get the permit and then again to make the repairs.
Maybe I just shouldn’t disclose the lack of permits!No. Bad Idea. As with all issues when you are selling your home: Disclose Disclose Disclose! If it is discovered that you did not disclose the lack of renovation permit you are opening yourself up to a possible lawsuit. Remember: You can be held liable for any work done without permits.