Selling Your House with Unpermitted Additions

by Marsha Charles 04/19/2020

Image by Sue Smith from Shutterstock

House owners frequently remodel, upgrade, or otherwise make changes in their homes for which they do not secure a permit. While some changes do not require permitting, others do. The challenge comes when you attempt to sell the home. You may run into a problem when a buyer makes an offer on such a property, and their inspector discovers unpermitted changes. Their mortgage lender may be unwilling to give them a loan until you remedy the permit issue.

Additionally, since building codes often change from year to year and certainly from decade to decade, and the property may have changed hands more than once before it came to you. Even if the upgrade occurred before you purchased it, you might be the one responsible for fixing it with your municipality.

What can you do? When you believe your home has unpermitted construction, learn as much as you can about it:

  • When did installation take place? Before you took ownership of the house? After? 

  • What is the construction? A pergola? A sunroom? That necessary second bathroom?

  • In the year or era of construction, was a permit required? Is there a permit in place of which you're not aware?

  • Can it be grandfathered?

What is “Grandfathering”?

The term “grandfather clause” refers to an exception to a code, restriction, or legal requirement. It allows anything already done legally “at the time” to continue even if a new limitation would not allow it. Regarding unpermitted home upgrades, if the construction was before the change in the code, check to see if the code requires retroactive compliance. In that case, exceptions typically pose a danger to anyone living in the home or on the property and need remediation. When code changes do not require retroactive compliance, knowing the date of the construction puts you in the clear.

Retroactive Permitting

When you discover retrofits, additions, upgrades, or renovations in your home, search city or county records for a permit. Ask for help to see if that type of work in the year(s) of its completion required one. If it needed a permit, and you do not find one in place, either request a retroactive authorization or plan to sell your home "as is" to a willing buyer. Municipalities often have methods in place to offer retroactive permits. Check to determine the total cost of the permitting process. In addition to the permit fee, you may have to pay fines, inspections, and other fees. Any modifications required because of the permitting process become your responsibility. When the total cost of obtaining retroactive permits and related fees and construction costs is higher than the return on your investment, consider the “as is” process.

Selling Your Home "As Is"

When you choose to sell your property "as is," you no longer need to disclose to the municipal building department that you may have unpermitted construction. Until you are sure you want to request a retroactive permit, do not disclose information when you communicate with building code offices that might trigger an inspection. 

In the selling process, however, fully disclose to your real estate agent all items you know about for certain. That is, tell them about additions or upgrades you installed while in ownership. Make sure a sale is not delayed or falls through because a lender requires a permit. Have an appropriate "as is" clause written into the sales contract. 

Confer with your real estate agent to determine if seeking a permit is in your best interested when selling with unpermitted additions.

About the Author
Author

Marsha Charles

Consistent top listing and selling agent receiving Chairman's Club award for superior sales achievement almost evey year while associated with Preferred Properties, Inc. Consistently receive the International Presidents Premier award for sales volume since joining Coldwell Banker Residential Brokerage and ranked in the top 1% of agents in Connecticut and Westchester County. Received recognition as a Top Five Sales Recepient for customer satisfaction since 2010 and listed in Westchester and Connecticut Magazine. Member Top Agents in Connecticut listed by Real Trends. Works with Sellers and Buyers with a strong understanding and attention to needs of those who are relocating . Background and experience in advertising, public relations and photography offer creative and innovative marketing plans for sellers. Realtor designations include: Graduate Real Estate Institute, Certified Residential Specialist, Certified Residential Marketing Specialist. Served as President of New Canaan Board of Realtors,Currently serve as director of the New Canaan Board of Realtors and chairman member of the Professional Standards committee. Named Realtor of the year by the New Canaan Board of Realtors. Married and the Mother of four children who attended and graduated from the New Canaan School System .Member of New Canaan, Darien, Greenwich and Statewide MLS systems. Areas covered include New Canaan, Darien, Greenwich, Rowayton,Norwalk, Wilton and all of lower Fairfield County.