Selling a House with Unpermitted Work: A Guide for Homeowners

It’s not uncommon for homeowners in California to encounter unpermitted work when it comes time to sell their property.

There can be several reasons why construction ends up without proper permits…

Building regulations vary from one neighborhood to another, and navigating through the complex rules can be daunting for those who lack the time to decipher legal intricacies. Some property owners embark on construction projects without obtaining permits simply because they prefer to avoid the hassle, even if they are aware of the requirement to consult with the local municipality beforehand.

If you uncover unpermitted work as you prepare to sell, it’s essential to learn more about the permit requirements, explore options for addressing unauthorized construction, and determine responsibility for rectifying the situation.

Understanding Permit Requirements

When purchasing a new home in California, buyers should have access to all the necessary information to make informed decisions about the property. Ideally, previous owners would provide receipts, permits, and official documentation to assure buyers that all work done on the property was conducted legally.

However, some sellers either fail to disclose this information to buyers or are unaware of the requirement for notarized approval. In various neighborhoods, regulations regarding DIY renovations and improvements vary: some permit extensive DIY projects without requiring a permit, while others mandate permits for certain repairs, and some necessitate licensed contractors for all home repair work.

Getting Ready to Sell

Sell Quick California understands the importance of being fully informed before listing your home. We know that sellers often find themselves in the position of having to do additional research and legwork to gather all the necessary information. Despite the circumstances not being their fault, they might still need to cover additional expenses or dedicate time to uncovering historical documents related to their property. Sometimes, sellers come across open permits left unresolved by previous homeowners.

Property records are typically stored at city/town hall, the county courthouse, or the county recorder’s office. While visiting these locations in person can yield better results than making phone calls, the responsiveness may vary depending on the area. It’s essential to look for the Certificate of Occupancy inspector’s report, which contains records of completed or outstanding permits. During this inspection, any improvements that seem to require a permit but lack one at the time of assessment will be scrutinized. If sellers are unaware of past improvements, they may need a home inspector’s assistance in identifying any non-compliant features. While home inspectors cannot prescribe specific actions for sellers or buyers, they can provide referrals to appropriate specialists.

Furthermore, sellers may wish to review the original blueprints of their home to understand the alterations made to the original structure. In cases of significant renovations, the involvement of an architect may be necessary to draft new plans for the property. Despite the additional effort involved, sellers may still find it challenging to obtain all the necessary information. At Sell Quick California, we aim to streamline this process and empower sellers with the knowledge they need to make informed decisions.

Selling a House with Unpermitted Work

Discovering the Unseen

Deciphering the regulations of each locality can prove challenging, compounded by the ever-changing legal landscape.

Home sellers often grapple with identifying breaches in regulations concerning unpermitted alterations, lacking documented evidence. While they might stumble upon concrete details (e.g., the previous owner employed improper fasteners for a fixture), assessing the safety compliance of the work or its adherence to past statutes remains elusive. Without delving into walls or floors extensively, sellers may fail to grasp the full scope of the modifications. When faced with knowledge of or suspicion about illicit modifications, sellers confront two possible courses of action.

Option 1: Understanding Retroactive Permits in California

Home sellers aiming to assure buyers of their property’s compliance with building codes can opt for a retroactive permit. Similar to conventional permits, the regulations governing retroactive permits vary depending on the property’s location within California. Securing a retroactive permit entails inviting city inspectors to assess the property and endorse the work. Inspectors may approve the work outright or recommend additional enhancements that require permits. Retroactive permits prove beneficial for sellers discovering unpermitted work, offering them the assurance needed to sell their property confidently.

Option 2: Selling Your California Property As-Is

For sellers encountering unpermitted construction work, selling the property as-is presents a viable option. Sellers are not obligated to disclose unpermitted work unless directly asked by the buyer, though they must respond honestly to any inquiries. However, listing a property as-is often raises red flags for prospective buyers, hinting at potential structural issues. This route is advisable primarily for sellers seeking a swift sale without the time to navigate negotiations with city authorities.

Local Authorities’ Response in California

In general, local authorities in California understand that homeowners may not thoroughly review every building code before undertaking renovations. Therefore, disclosing unpermitted work may prove less daunting for sellers than anticipated. Provided sellers can offer some information after conducting their due diligence, authorities may be open to negotiation.

Nevertheless, it’s essential to acknowledge that authorities might opt for a more challenging stance if inclined to do so. In certain areas, authorities might increase fees for sellers, particularly if the city requires additional revenue, albeit this isn’t standard practice. Typically, authorities prioritize safety and may permit the work to remain unless it poses a hazard to residents or neighbors.

Who Bears the Financial Burden in California

Sellers bear the financial responsibility for the property, but understandably, they’re displeased when they must foot the bill for others’ oversights. Sellers are advised to meticulously review their initial buyer disclosure statement. If the unpermitted work was undisclosed, they can seek reimbursement from the previous owner. Additionally, the real estate agent and home inspector may share legal liability if they overlooked the unpermitted work.

Alternatively, if the seller holds a comprehensive title insurance policy covering unpermitted construction, they can approach their title insurance company for assistance. However, as sellers may anticipate, proving what individuals knew or should have known at the time can entail significant hassle.

Although permit regulations can be vexing, they serve a crucial purpose. While homeowners may own their property, they exist within a community and must ensure their property’s infrastructure—such as plumbing, tree roots, and gas lines—doesn’t inadvertently harm their own or their neighbors’ homes. Opting to sell the property as-is carries substantial risks. Not only might it attract bargain-hunters who drive down the price, but it could also endanger safety if the work poses a threat to future homeowners or neighbors.

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Marc Afzal- Real Estate Investor

Marc Afzal is a full time Real Estate Investor and has well over 21+ years in the Real Estate Industry. Marc is a Licensed Broker, NMLS licensed Loan Officer. Marc is currently married to his wife Sheila and they live in Napa California. Marc is enthusiastic about Sports, Golf, Real Estate Investing, Family and Travel.

About Marc Afzal

Marc Afzal is a full time Real Estate Investor and has well over 21+ years in the Real Estate Industry. Marc is a Licensed Broker, NMLS licensed Loan Officer. Marc is currently married to his wife Sheila and they live in Napa California. Marc is enthusiastic about Sports, Golf, Real Estate Investing, Family and Travel.

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