Buying property and previous owner renovated with no permits
Franklin, MA · Member since 2018 · 7 posts · 5 votes
Buying property and previous owner renovated with no permits
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Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
8yDepends on the violation.
I had banks providing the mortgage coming by to do inspections, and they check room counts. I had insurance companies come by to check if an illegal converted basements has proper egresses. This is aside from the permit issues, so the illegally converted basement can be insured without permits, but done correctly.
Other things which I'm aware of in my rentals that I acquired with renovations without permits includes an enclosed breezeway. There were many such renovations done in my town which requires a zoning approval after a public meeting. I hired an architect to check things out and he pointed this out to me. So I told him to do the paperwork to get the zoning approval. But he advised most such renovations without permits usually does not include footings below the concrete slabs. Told me it's doable but it's one of a few things I'll have to take care of when I sell.
So you'll have banking, insurance and zoning issues. Do you know what all the issues are and how much it would cost to correct? In NYC, if you did a job without a permit, have to get a permit to have the violation corrected, you'll have to pay a fine in addition to fees for the new permit.
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- Providence, RI · Member since 2017 · 33 posts · 6 votes8yChanging the property drastically without the proper consent from the municipality could either be a huge problem or completely insignificant. My thoughts would be because the real property was effectively altered from what the previous deed represented, then that would make the title not clear and marketable. Which would defiantly be a problem, however if you build in costs of fixing said problem , getting proper paperwork etc, into your offer price , depending on the location , the property could be a good buy. Just make sure you adjust your numbers accordingly. And don’t be afraid to walk away. This sounds like your dealing with a dishonest owner or contractor, I would walk away an never look back, only because what else have they been dishonest about that’s going to bite you in the butt down the road. Also, consult a title attorney, good luck.
- Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes8y
Depends on the violation.
I had banks providing the mortgage coming by to do inspections, and they check room counts. I had insurance companies come by to check if an illegal converted basements has proper egresses. This is aside from the permit issues, so the illegally converted basement can be insured without permits, but done correctly.
Other things which I'm aware of in my rentals that I acquired with renovations without permits includes an enclosed breezeway. There were many such renovations done in my town which requires a zoning approval after a public meeting. I hired an architect to check things out and he pointed this out to me. So I told him to do the paperwork to get the zoning approval. But he advised most such renovations without permits usually does not include footings below the concrete slabs. Told me it's doable but it's one of a few things I'll have to take care of when I sell.
So you'll have banking, insurance and zoning issues. Do you know what all the issues are and how much it would cost to correct? In NYC, if you did a job without a permit, have to get a permit to have the violation corrected, you'll have to pay a fine in addition to fees for the new permit.
- Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes8y
A lot of it depends on your local situation, so, check with other investors in your area. In some areas it's considered 'grandfathered' in, in others you can get into a heap of trouble.
- 8yJared W SmithBusiness MemberArchitect · Westchester County, NY · Member since 2018 · 682 posts · 476 votes
Originally posted by @Evan Renaud:
A question about buying a house that the previous owner began and nearly finished renovating without acquiring building permits. If I were to purchase this property does that fall onto me or what challenges would face a potential buyer? Thank you for your time and any knowledge on this.
Being an architect, when I recently purchased a home for my family I was closely watching any modifications and renovations that occurred and if they were legal. Ultimately the home I purchased had a 200 SF addition. It was permitted but was not yet "closed out" (finalized) with the City's building department. Prior to closing on the home owner had to legalize everything with City and include revised Certificate of Occupancy (CO).
My advice would be to find out what work was done. The extent of renovations should greatly affect the sale. How open has the owner been? Were licensed contractor(s) used? How is the quality of their work? Have your own contractor walk the property with you. If it's internal plumbing revisions, electrical upgrades and/or wall removal/additions, then unless you have pre-renovation floor plans showing what changed, you may be at a lost. However, if it's an exterior modification (an addition, deck, dormer, accessory building, etc.) it should be apparent on current CO. Definitely ask for this to be legalized prior to closing.
Whatever becomes yours after closing becomes your problem.
Architect Owl PLLC521 Reviews - Franklin, MA · Member since 2018 · 7 posts · 5 votes8y
Thanks for all the great advice. This property is a family owned but nothing tied to myself. The work was all done by a licensed contractor which is my septic father who was renovating for my mom. The electric,plumbing, new windows, kitchen and floor plan has all been upgraded. I was under the impression he wouldn't be stupid enough not to get permits but as far as work quality it is top notch. The building department has given him huge problems because when he submitted for permits,after being exposed, his renovation costs were more than 50 percent of the houses value. If I could drive the fees or whatever other costs into the offer price, I would hold the property as a rental as it has water views and short walk to the beach in the Cape of Massachusetts. I hope this clears up a little more information and may help narrow down my options going forward. Thanks again for any and all feedback it is greatly appreciated.
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