All across the country, lenders are cracking down on sellers who try to sell homes that were remodeled without a permit. In fact, many lenders won't even consider financing a home that was remodeled without a permit. This is true for several reasons, but mostly because the value of the home may be in question.
As a buyer, you should be concerned about non-permitted work as well. Not only can buying a non-permitted house cost you financially, it may make your life miserable in more ways than one. Below are three reasons why you should never buy a house that has been remodeled without a permit.
Your Insurance May Not Cover Non-Permitted Work
Your insurance may refuse to pay for any claim associated with work that was done without a permit or damages sustained in a remodeled part of your home. You may not even be able to obtain insurance if your house doesn't match city records. For example, if the previous owners added a bedroom without a permit, city records will show that your home has one less bedroom than it actually does. When an insurance agent inspects your home, they may refuse to insure it.
You Might Have to Tear Everything Down
Some cities will make you tear down and undo any work that was performed without a permit. So you may think you're buying a lovely three-bedroom home with a newly remodeled kitchen only to find out it's actually going to be a two-bedroom home with a gutted kitchen.
You May Have to Pay Fines and Legal Fees
As the new homeowner, you will be responsible for any fines and fees associated with the non-permitted work. While there are laws that will allow you to pass the cost onto the original seller, you will have to hire a lawyer and pay court costs to go after your money via a lawsuit. As you can imagine, such legal proceedings may stretch on for a while, and there's no guarantee you will actually get the money from the seller.
If you're unsure whether a permit was issued for any work done on a house you're thinking about buying, have the home inspected. Many times the building inspector will be able to spot non-permitted work right away. You can also find out what permits were issued for the house by going to your local courthouse and pulling the records for the house. If you're looking for a building inspector in your area, visit http://www.homeinspectionassoc-ma.com.