Added second bathroom without a permit, am I screwed?

26 Replies

Hey BP community,

My gf bought a condo 3 years ago. The condo is 900 sqft 1bd 1 bath with a loft. We added a full bathroom to the loft area so now the condo is 1bd 2bath with a loft. The next step is to enclose the loft area so that we have a full 2 bed 2bath which will be worth as much as the other 2bd 2bath in the area.

On the new bath we did not get it permitted, will that hurt us when we go to the bank to have it appraised? will we have to gut the place to have it permitted? Some of my friends have said the appraiser wont need to get into the walls or anything and we should be fine. And some have said we may have to rip everything up.

On the loft conversion, my GF was to enclose the area in glass as opposed to using drywall. I have seen the room w/glass enclosure done in a lot of pictures and it does look a lot nicer than just the drywall. But this does not seem to code as there is no window Egress. There also might not be enough space for a closet but I think we can find space somewhere. What are your thoughts on using the glass and still getting it classified as a second bedroom. Do people just do the glass enclosure and not worry about it being considered a bedroom? 

Code says fully enclosed with a closet, door, and window.

It appears that you are going to find there are another 20 or 30 code violations e.g. proper drain & sewer vent pipes, minimum space for fixtures, ventilation, etc.. There are many buyers who don't care if additions are legal and won't get the city involved when buying. When we purchase or sell properties with illegal additions we sell 'as-is' or many times we will rip the bathroom out and make everything original.

@Dale K Poyser

Overall the whole thing should have been permitted unless you’re out in the middle of North Dakota where’s there’s no building codes. Building the walls without framing inspection is 1 issue, the plumbing and electrical work is the bigger issue if those Plumber and Electrician did not get permits.

Thanks Jack,  in worse case scenarios how much do u estimate it would cost to rip the bathroom out. Thanks for the "as is" suggestion as well.

Originally posted by @Jack Orthman :

It appears that you are going to find there are another 20 or 30 code violations e.g. proper drain & sewer vent pipes, minimum space for fixtures, ventilation, etc.. There are many buyers who don't care if additions are legal and won't get the city involved when buying. When we purchase or sell properties with illegal additions we sell 'as-is' or many times we will rip the bathroom out and make everything original.

True, but hindsight is 20/20. Now Im just trying to see what the most practical path is short of ripping everything out. Thanks for the comment.

Originally posted by @Frank Hinck :

@Dale K Poyser

Overall the whole thing should have been permitted unless you’re out in the middle of North Dakota where’s there’s no building codes. Building the walls without framing inspection is 1 issue, the plumbing and electrical work is the bigger issue if those Plumber and Electrician did not get permits.

The appraiser probably won't care about permits. The appraiser's focus is on value.

Your local municipality will be interested in permits, but they need to have a reason to find fault. So far, you got away with the bathroom as is. You may be able to do the same with the loft. Then, you incur an event that requires a sale. That's when you ultimately get caught at a very inopportune time. Your municipality may also have rental inspection requirements that may uncover the violations. Alternatively, your tenant might report you if you rent it.

Your municipality may let you off with just a fine for doing work without a permit and pass on inspection. You will have to open walls if they want to inspect.

A loft bedroom is a higher risk place for fire since the only egress is out the window or down towards the smoke and fire. You have a higher risk death if there is no window. Glass walls seem like a good idea until you need to do anything with them. Electrical outlets? Hang a picture? Add a shelf? Would you mirror them or do you have a glass all view of roof joists, depending on the design? I've never experienced them, so my opinion isn't worth much. I see a lot of negatives.

You will need to expose all of the pipes, etc to get a C of O when you sell or if you try to permit the job now, which you will have to do to sell it. It's possible the appraiser will not consider the bath since it is not legal and not documented on the town card. The only real way to fix this is to hire a plumber who will sign off on the job and get the permits, but they would have to rip the walls to confirm. From your comments, I agree with many other commenters that you will have several violations. The last thing you want to do without permits is a bathroom because of all of the important necessities involved - sewer connection, GFCI electric near water, pipe connectivity between levels, potential leaks, proper venting.

Crazy idea, why don't you call your local building / permit office and ask them these questions? You should not be doing work on your property without permits and proper inspection. Show your plans to the office before you do the work and they will tell you if it meets code. As far as the work that is done, see what they need to do to properly inspect it. It may require opening walls, but who cares. Repairing a wall or two isn't very difficult.

@Dale K Poyser from the comments here and my own experience, I would say this what I would do:

Pay for a GC, plumber, or electrician to come out and inspect your situation. Have them pull the permits and re-do/fix and sign off on the room to get it permitted. It's just drywall to open up and check. A few hundred bucks now may save you thousands at closing.

Heck, even just calling a couple GCs in your area to get their opinion is well worth your time.

Depending on your city, you may get away with it, but it'll still be a pain and worry of yours if you don't do anything. Heaven forbid something catastrophic happens because you guys missed one simple electrical thing that an electrician or GC would catch.

You can sell it as is. I bought a place with a conventional loan and they still lent me money with 2x unpermitted bathrooms. Only thing was they didnt count it towards the value on appraisal. 

Alternatively you can contact the local building department. Usually when that happens they make you pull permits and if you're really unlucky they'll also give you a fine. 

I once seen someone add a side door and finish their basement without permits. The township came in and made them pull permits. Only problem is how do you get footing inspections on something buried under a driveway. Answer was to have a structural engineer sign off on it and it was not cheap. 

When it comes to permits you're better asking for permission than forgiveness. 

The plumbing getting inspected gets a little more involved. Requires air testing or water testing drain lines. Which could mean tearing up floors or taking ceiling down below. Appraisers will sometimes catch the new bath due to the fact that your original home on the assessors site shows a 1bed 1 bath. The other thing we hear in my area, is if you end up having an electrical fire that started in an Un-permitted space, your homeowners insurance may not cover to repair damage. Easier to do permits in the first place.

@Dale K Poyser I wouldn’t say you’re screwed necessarily at this point, you’ve just created some grey area and a situation where you may be screwed later. Appraisers probably aren’t going to consider it an actual 2/2 if the 2nd bedroom and bathroom are unpermitted. They technically aren’t supposed to include unpermitted additions for added value, but some do as it might be valuable to a certain buyer anyway, so it depends on the appraiser pretty much but there’s no guarantee that the money you’ve spent on this improvement will be considered as adding value. I guess to get really technical, since appraisers work off of comps, they would need to find a recent sale with similar unpermitted work to use as an accurate comp. It’s unlikely they will find a comp like that so you’ve just made the appraisal process more of a pain. Same with a sale. Technically you can’t consider the 2nd bath as part of the value of the property, so it should probably be listed as a 1/1 with a note somewhere in the listing that there is a second bathroom/bedroom that is non-conforming. You will of course have to sign a seller’s disclosure stating whether or not you know of any unpermitted work during a sale. Some buyers won’t care, others will so maybe it adds value to some and maybe it turns away others. It’s unlikely that you will be able to fetch the same price as a true conforming 2/2, and a savvy buyer may use the unpermitted work as a negotiating chip to get you to lower the price or make other concessions. If you lie on the seller’s disclosure and fail to disclose the unpermitted work, then you may be screwed as that would be fraud. Personally, I’d call the permitting office (don’t give them an address) and try to figure out how hard it will be to get the work permitted retroactively. Depending on what you find out, make your decision on what to do next. It may be easy or it may be impossible. In the future I’d just get permits for stuff like this, it’s usually a lot less hassle in the long run and worth the couple hundred bucks extra for the permits.

Some things to think about the glass walls are: 

1.  Adults do not like the lack of privacy if others are in the house.

2.  Parents are not comfortable with young children downstairs by entry doors when the parents are upstairs.

3.  Parents do not like their kids by glass walls they may fall on.

@Dale K Poyser Where are you located? Really in places that do not do point of sale inspections, your odds of getting "in trouble" with authorities for lack of permits is low. Some buyers will care some won't.

@Dale K Poyser

I assume you’re keeping it? And you’re getting it appraised to do a cash out refi? I think you’re fine. If anyone asks, just tell them you bought it like that. Nobody will know or care. The appraiser probably won’t know or care either. Don’t sweat it.

I did a BRRRR on a house that already had a garage converted to a room before I bought it. No permit was used. The appraiser that came out after the rehab didn't care and counted the sq ft of the garage bedroom in the appraisal. I bought another house that had a garage converted to a bedroom also and had a bathroom added. The appraisal came in fine and they counted the bathroom and bedroom. You'll be fine.

@Dale K Poyser A condo on the Austin, TX mls said it was remodeled to the studs with new wiring, etc. I looked on the city permit site and nope, no permits. (I looked because curious). Sold in days. You just need to wait for a buyer who doesn't care. Permitting is not expensive but ripping out drywall and flooring to get an inspection is...so next time get a permit.

@Dale K Poyser the best answer is always get permits for work that requires a permit.  Many people can get by without pulling them, but it's a gamble.  Especially if anything happened and it got traced back to you as the one who performed the work or paid for the work to be done.  As @Jon Shoop mentioned, tearing out drywall to allow for a GC to sign off and inspection to pass is much easier than tearing out bathrooms, tiles, etc.  And even less than a lawsuit.  

An appraiser is likely not going to be able to determine if you ran new wiring, installed new lights, changed fixtures, put up new drywall, etc.   It is hard to verify that was ever done.  But they will almost certainly will see that you are selling a property as a 2/2 and it was previously a 1/2 per county or tax records.  That's an easier catch.  

@Dale K Poyser As @Marian Smith said sometimes it doesn't matter. There are multiple instances in Austin that I have seen add-ons built without permits. Did it really have a material affect upon pricing? Yes, in some instances and no in others. It depends upon the work.

I have seen a house in south austin that was carved up with multiple rooms. One was a sound room/studio. There were multiple rooms created. I presume that they were built to allow for more folks to stay there. I have really no idea as I never got to the bottom of it. The seller had to sell and it wasn't pretty. I bid on it and lost. I am not going to over pay. All the work was done without permits and the property sold at a big discount relative to market pricing in the area for a decent house.

 I have a property that has a humongous deck that was built decades ago. Its cool and over engineered. It has steel beams as support which cost the builder a pretty penny. The story is that the city told the previous owners to tear it down and they refused. And after awhile the city dropped it. Did I have finance issues when I bought it? Nope. The proper thing to do is disclose disclose disclose. 


I have come across houses that had add-ons where it didn't matter and it was sold like a normal house. No biggie.
 

Thanks everyone for the thorough responses, it has been an eye opener and greatly appreciated.

After reading all the comments and suggestions I think what I will do is call the city and also call a few general contractors after the fact to get estimates on what it would cost to get things properly permitted.

The goal was to do an appraisal and get the PMI taken off and then look into HELOC for the posssibility of future investments. If not having permitting could cause issues with insurance and tenants then it definitely sounds like something I should make a priority.

It's good to know I may not have to gut everything, but also good to know what my risks and options are.


As for the glass around the loft I think the points on this are valid and therefore, I will pass on the glass walls.

@Jill F. The property is in Southern California

Thanks again everyone!

Dale

@Dale K Poyser

I would try to make it under code. Maybe a good lawyer will give you a light. A decent appraisal if not going to your house, wont count that bathroom. Then you plan to have another room, it wont count as well. And in order to sell it you will probably need to have it regular... so maybe it the time to do it ...

I would definitely talk to a lawyer

@Dale K Poyser

A lawyer can help clear the issues, negotiating with town to have it approved. Should not be an ordinary lawyer, more those who could handle RE matters.

I have a friend that had issue similar to yours, and was able to partially solve it ( he actually bought the unit that later he figure out was out of the ordinance and with issues in codes ).

I meant partially cause it was a negotiation, and part of the addition out of the city ordinance had to be tear down.. but he didnt lose all of it.

@Jon Shoop Have not done anything on this yet. I did discuss it with my GF so it is on the list of things to do. Fortunately we are both pretty busy with work, and the place is not rented so we are the only ones that need to worry about whether it is permitted or not. 

She is pretty set on wanting to do the full glass enclosure of the loft area despite the possibility of it not being appraised as a room. One consideration is that if we get it properly permitted and appraised, our property taxes will be higher. There is a 1bed 1bath that sold for slightly less than what we would expect for the 2bed 2 bath. So I think if we disclose the bathroom and sell it as is, we might absolve ourselves from that risk. And then she can go nuts and do whatever she wants. Like someone else said the buyer might not care if it is on record as a 1 bed 1 bath, but has a working second bathroom. So the buyer might also appreciate and pay more for the loft with glass enclosure with a curtain  even if it is not an official room.

This is all brainstorming and my preference is to get it permitted but I'll cross that bridge as I get closer to the point (selling or renting) of having to make a decision.

Dale