Buying a Property that has unpermitted work

2 Replies

I would like to get some feedback. We have a SF under contract that already has an addition added that is bringing in rental income. Great location with Cashflow looking to be about $650 per month after PITI. The problem that we are finding is that they have added a lot of work to the house that doesn't seem to be permitted (new kitchen, 2 bathrooms, and the addition). I am not worrying about paying higher taxes for this property, but I am concerned about any possible liabilities to the unpermitted construction and problem reselling in future. Has anyone ever had this problem? What are the steps to get permits after construction?

Aisha:

I bought a property once with an un-permitted garage conversion.  That community had a rental registration program which was when it was discovered. In my case, my contractor had a good relationship with the city so he retro-actively got a permit and made up drawings to make the city happy.

The problem is that you are at the mercy of a bureaucrat.  I have plenty of other examples where the city wants us to do something dumb, because a politician is pushing an agenda.  You get the wrong guy on the wrong day and you are tearing out the kitchen.

If you want to take a calculated risk, find a local contractor familiar with local ordinances and pay him to evaluate the work.  If it meets code but simply wasn't permitted, you can probably rectify it with a few hundred bucks to your local government. 

@gregscott Thank you for the advice. I got a similar answer from a real estate attorney as well