“Buying without permits”

permits
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“We are under contract with a house in the city and have discovered that permits were applied for but never issued. Our seller is contractually obligated to get the permits, but we think it might be easier to get additional seller credits, a more robust warranty, etc.

My question is this: Does anyone have experience owning an unpermitted home?”

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78 Comment

  • Do not buy a home without permits. You have NO idea what could happen when you try to go get those permits. Let the seller take care of it. Our seller installed a bathroom without permits and we refused to go under contract unless they took care of the permits before closing.

    • I second this. The City may require you to undo any improvements or take down walls or rip up flooring to show that certain work below the surface was done properly. Plus, there is all of the stuff that you can’t see (e.g., electrical, plumbing, etc.) and could result in significant costs to you (or others) later on.

      • ah

        The city does only the most minimal job of inspecting work to confirm that it is (a) as permitted and (b) up to code. It does not check whether the work is of high quality. So even with permits you run the risk that the work was low quality.

        • The quality of the work is not the question. To assess quality, you need a real home inspector. DCRA is sadly arbitrary about permitting. They can pass off crap work or jam you up on a minor issue. You can never know how it might turn out. So get everything permitted before you buy.

      • This is silly, how would the city know whether or not the bathroom is new? Are you going to invite them in and tell them? The only reason I would buy a house without a permit was if it was a new structure ie; adding on, garage, additional floors.

  • +1000 Do NOT purchase until all permits are approved. You are just asking for trouble.

  • Permits for what exactly? When was the work done? I need some more details here…

    • This is a recent flip – total gut job where the developer replaced everything in the home and added a small addition to a bedroom on the second floor. It looks like he started the process to apply for the permits but they were never issued. We are still not exactly sure what happened.

      • NOPE! As others have said, a bathroom, some flooring, small things yeah I’d def buy it. But flips are risky as it is and one without permits is a no go. A developer absolutely knows better.

      • DO NOT BUY. No decent developer would break the law in order to save a few thousand dollars in permit fees, especially when the total project cost in probably in the 100’s of thousands. Walk away.

        FWIW I’m a developer.

  • ah

    Before jumping to the obvious conclusion, what are the permits for?
    There’s a big difference between an unpermitted add-on, where you may confront zoning issues, and an unpermitted window replacement or even bathroom, where as long as the work is of proper quality, not having a permit is a less serious issue.

    • Totally agree with this. Depends on what the permits are for. Unpermitted plumbing in bathroom? Take $5k and move on. Unpermitted sunroom or habitable space over a garage — may be a bigger issue that requires resolution before purchasing.

      • Thanks everyone! Partner of OP – essentially it is a row house that was completely renovated from top to bottom, including a small addition on the second floor to enlarge a bedroom. From the info we’ve been working with our agent to gather, it looks like the current owner began the process of getting the permits (hired an architectural firm to apply for them, etc) but the permits were never issued. Because of the scope of the renovation, all signs point to requiring the seller to get them.

        • Don’t buy the house.

        • HaileUnlikely

          Permits *and inspections.* Having the permits is of next to no value if the work has not been inspected.

        • Don’t wait on the permits. You don’t want to buy this place.

        • Yeah, no. Don’t buy this place.

          • Really appreciate all your feedback! As a first time buyer desperately trying to educate herself, can I ask why you would recommend walking away instead of waiting for the permits/inspections?

          • They are making the assumption that if the contractor didn’t pull permits, they didn’t do good work, which is perhaps valid except it’s entirely too common in DC to always be true.

            I bought a fully flipped house that had permits applied for but the city never inspected. It’s been perfectly fine. The only issue I had was something totally unrelated to the renovation that permits would not have mattered.

            The reality is short of the structural problems if you have unpermitted addiitons, the city isn’t going to adequately inspect a damned thing anyway. Good luck buying a house in DC that doesn’t have some improvement made that wasn’t permitted. My only vote for walking away here is your reference to the addition to the house. That is ONLY a problem if you ever want to make improvements down the road. The city will NOT make you tear something down that was unpermitted if you didn’t actually do the work UNLESS you need to do additional work that requires a permit down the road. If you only plan to live in this house a few years and will sell it and not face that problem, who really cares?

            What is far more important is doing the best inspection you can.

          • The developer basically built a new house without any permits or inspections. Unless this house is truly a one of a kind property (doubtful), or an insanely good deal (also doubtful), this is too much risk for a first time home-buyer to take on unless you have $400,000 in cash (I’m not exaggerating) you can use to fix any issues that arise (and there will be issues).
            .
            If you haven’t read WAMU’s “Flipped” (http://wamu.org/projects/house-flipping/#/part1) I highly recommend it. It shows you what kind of disasters can result from buying a property like the one you describe.
            .
            Now, having said that, IF the seller gets permits AND passes inspection, you MAY want to consider buying the house if you can secure discounted pricing.

          • Because a) the work may not even be permit-able, the addition may not be allowable. You could probably hire someone to assess this for you, but that’s an addition expense before even making an offer.

            b) it is HIGHLY likely that some of the work may not pass inspection. So then what are you going to do? You can try to fight the seller for the costs required to get it to the place would pass inspection (which may include re-doing plumbing and electrical and even rebuilding the addition). This will be very time consuming–I’m doing a half-house renovation right now and with inspections built into the time frame (not counting permitting which happened in advance) we’ve estimated the timeframe to 15 weeks. Not knowing how much might need to be un-done and re-done you have no idea when you can actually move into your house and how much might need to be torn apart.

            Frankly the sellers probably won’t go for it, because their best case scenario is probably to sell to someone who didn’t think to check the permits. If you operate in this kind of shady way your end game is to offload the property as quickly as possible, ideally ginning up a bidders war so everyone is willing to waive contingencies.

            So why bother? Aren’t there other houses you could buy that have valid permits?

          • HaileUnlikely

            Duponter – look at what the would-be buyer says they did. They put on an unpermitted addition *to make a bedroom larger.* This means that they necessarily removed part of what used to be an exterior wall, which might or might not have been load-bearing, built a whole new structure, and attached the new structure to the existing house *somehow.* It’s not like we’re talking about a sunroom here, that if done shoddily you can just lop it off and leave the rest of the house intact. This sort of project is kind of a big deal. I’ll grant that I’m more risk-averse than a lot of people, but this is not a case where I would advise somebody to go right ahead on the grounds that lacking a permit doesn’t *necessarily* mean the work was shoddy, or to put it another way, the work *might* be ok.

          • Haile- where did I say they should just proceed? I was only noting that permits by themselves are somewhat meaningless as to whether the construction is necessarily sound unless you think DCRA does its job. If an inspection fails to confirm if the construction was done in a reasonable manner, don’t buy it. I agree with you here that with an addition, it is a bigger deal.

            But I am not sure getting the permits approved has anything to do with that issue really. I went to contract on a house, checked the permits, everything was done above board and inspected and even then, my inspector found obvious structural issues with an addition on a house and I fortunately had a contingency that let me back out of the deal. I would just say don’t assume resolving the permit issue will necessarily tell you if the construction was shoddy or not. Too much shoddy work happens permitted in this city for that to be reasonable.

          • HaileUnlikely

            Fair enough, I guess I stretched what you said a little bit. In any event, I agree with your point that having had permits and inspections is no guarantee of quality. But in the case of an actual structural addition done without permits, I’d take that as a red flag too large to look past.

          • First time buyer: Get your own home inspector, not one provided by your realtor. Even for a different house, put time into finding a good home inspector. Don’t suffer like I have.

        • Andie302

          Are you saying that the current owner is not the party that did the work, but that they’re trying to rectify the issue? If so, this seems to add even more risk. I wouldn’t buy this place, and I’d warn my clients of the risks of buying (and as a listing agent I would’ve advised the seller get the issue resolved before going on the market). If someone was willing to do the work without the appropriate permission/approval, what else were they willing to do to cut corners and then possibly hide?

      • Closing was held up for 3 months on a property like this in our neighborhood. It also involved the ripping up of the basement floor to correct a plumbing issue in order to get the inspectors to sign off on the permits. So permits and inspection must be done.

  • There’s an inherent amount of risk in home buying. Permits or not, you are at risk of getting shoddy work. I went through a very tiresome and frustrating process getting permits closed from the city that I needed to finalize my CofO. It took months of discussion and two additional inspections. Require the seller to get/close/disposition the permits, otherwise you may be in for headaches that insurance won’t cover.

  • “Unpermitted home” makes it seem like the entire structure was built illicitly, which seems impossible. So really I have no idea what this question is about.

  • Depends on the type and scope of the unpermitted work, but generally speaking I would run for my life.

  • HaileUnlikely

    As others have said, more info needed. Unpermitted new construction or addition (pop-up, pop-back, whatever) could be big big trouble. Worst case scenario you it is theoretically possible that the city could require the unpermitted structure to be removed. Unpermitted in-kind replacement of flooring material or drywall – who cares? In between (most likely scenario) – it’s complicated.

    • Thank you! It was a complete renovation – not a new construction but pretty much a gut job with an addition to make a bedroom bigger.

    • If you buy a house that has an unpermitted addition, the chances the city makes you tear that down if you didn’t build the unpermitted addition is near zero. They will only do that if you apply for future permits to do anything to it, or if they think for some reason it violates zoning or is a hazard.

  • OP – What’s your risk appetite? What kind of concessions is the seller offering? How much cash reserves do you hold? What’s the nature of the unpermitted work? These are the kinds of questions that would be helpful in assessing the situation.
    .
    Would I buy a house where the seller did a bathroom reno without permits? Probably. Would I buy a house with an upermitted two-story addition? Definitely not.

  • It really depends on what the permit is for. In DC, most homes are over 100 years old – so unless it’s been recently renovated, most of these have lots of shoddy work done that needs to be redone/ fixed/ repaired. So even though there were no permit issues with the house i bought, i still ran into lots of “repair/replace” issues with my 100+ year old victorian. If the scope is relatively limited (e.g. a bathroom renovation vs an addition) and the home owner used licensed contractors for the work, then your risks are lower – but you should still try to have them resolve it before you take it on.

  • I do. And it is a living nightmare.

    3 years ago we bought a house that had been partially remodeled by an investor. We had thought all they did was replace the windows, do new cabinets, appliances, and flooring. Or that is what they told us and what they had permits for.

    2 weeks after we moved in a DCRA inspector came by to follow-up on an inspection from just before we closed. Long story short the flipper had actually done all new electrical, plumbing, and a small rear addition with no permits (and thus no inspections). Since all the work was sealed behind drywall we had no way of knowing and the home inspector can’t look behind dry wall so it didn’t come up in an inspection. DCRA found out and is holding us, the current home owners, accountable. We are responsible for getting the permits and inspections. And since the un-permitted work was not up to code we are now responsible for bringing all that work up to code. According to many lawyers our only option is to sue the flipper in hopes of getting money to pay for the work or fork up the money ourselves or foreclose.
    .
    As the new homeowner you will be accountable for the un-permitted work. If you try to sell the property and the new buyer wants proof of permitting it falls to you. If you decide to remodel and this un-permitted work comes up DCRA can fault you. If the unpermitted work turns up to be shoddy you will be responsible for fixing it. Especially since you knew about the permit issues before closing The un-permitted work was un-permitted for a reason. You are taking on a big risk when buying it.

    • Thank you! This is really helpful. We’re trying to assess any possible risks and costs that might come up when figuring out if we should require the seller to get all the permits.

      • Question: why even risk it? Is it an insanely good deal? Is the house differentiated in any huge way from the other row houses in the city?

        My wife and I were in a similar situation a few years back. Went under contract and then found the home had unpermitted work done. We dropped out and found another row house within a month that was similarly priced and well cared for by an owner who lived there for 10 years before us.

        • Good question – it’s a good deal for a row house (albeit a small one) in our price range with a yard and in a location we love, which we didn’t think was going to be possible with what we can afford. Not to say that there won’t be a safer version of the same type of property popping up soon but this one checked all of our boxes until we hit this *little* snag, ha.

          • It’s likely a “good deal” because of the lack of permits…which makes it a not very good deal in the long run.

        • Agreed with others — walk away. Minor unpermitted work is one thing, but an addition and gut renovation with no permits/inspections sounds very risky indeed.

      • Also remember that DCRA LOVES cases like these because they are easy. They can rack up a lot of hours with very little work and know that you are going to pay whatever it takes to fix the issue, because you are a responsible homeowner. Going after actually dangerous slumlords is much more work and hassle, plus little hope of every collecting fines, so just not worth their time and effort.

  • Will un-permitted work not be covered by a home owner’s insurance policy?

    • If your insurance company failed to do an inspection of the property prior to underwriting the policy, then that;’s on them. They have to do their research about the property just like you do. However they could sneak in some language in the policy that excludes any work not done with a permit. But it would be up to them to prove the work was done knowingly by you or with your knowledge.

      Most likely they would pay out the claim and then drop you immediately afterwards.

      • HaileUnlikely

        No idea if a standard home insurance contract would allow the insurance company to check permits, but I suspect that they would be within their rights to decline to cover, for example, damage caused by an electrical fire that their inspector determined to be caused by electrical work that was not up to code; flood from plumbing that was not up to code, etc. (I’m actually not sure about this. It is a complicated legal matter. The insurance company is off the hook if they find a loss to be caused by the homeowner’s negligence. I’m not sure whether buying a home that contains some elements that are not up to code meets the bar for negligence. I suspect it does, but I honestly do not know.)

        • Good luck buying any home that doesn’t have some code violation. Every home does. Whether that is the cause of whatever an insurance company is paying out for is another story, but every single house in DC has code violations.

          • HaileUnlikely

            No doubt. Just saying, if there is something that the insurance company will use to get themselves off the hook for covering a loss, it is actual work being wrong, not permit status, and I really do wonder whether an insurer would in fact attribute a loss to “homeowner negligence,” and thus not cover it, in the event that the cause of the loss was itself something that violated code.

          • “But every single house in DC has code violations” is just nonsense. I, and I think the majority of owners – have worked very hard to be in absolute compliance. Surprise – We don’t actually want to endanger the lives of our renters. Yes, DCRA is arbitrary, changeable and unpredictable, but it is possible to find out the basic regulations and at least get close enough to fulfilling them that you might get to actually rent out a place and bring in thousands of tax dollars despite the efforts of DCRA.

  • I agree with the earlier comments – depends on what work was done and WHO is selling you the home.

    If it’s a couple that have lived in their home for years and did the renovations and fix-ups as they went, and did them for themselves to live in, I wouldn’t really run. IF it was a flipper or an owner fixing up the place for the purpose of selling it, and the work was somewhat extensive, then definitely get permits.

    We bought our petworth rowhome from a couple who lived in the house for a decade. The work they did wasn’t much, but we were planning to renovate nearly everything ourselves anyway.

  • All houses in D.C. are sold “As-Is” and therefore it is up to you the buyer to become knowledgeable about the construction and/or defects. The seller may not actually know whether or not work was done without a permit as the seller may have simply just let the contractor handle everything or may have been talked into the “it doesn’t need a permit theory” by the contractor. D.C. properties have been gutted and renovated many times over. So buyer beware. If that scares you…rent or move to Maryland and buy a brand new house with a warranty.

    Personally I would be surprised if any of they houses built in D.C. in the 1920s or 1930s even had permits back then. And any renovation done in the corrupt years of the 1980s are probably also suspect. In other words, don’t expect your house to be “up to code.” It probably is not.

    • HaileUnlikely

      It’s really hard to tell if old work complies with applicable codes. The building code and related code changes over time. You can easily evaluate a gut reno or new construction against the current code (well, not easily, the code is long and complicated), but there are lots of things in older houses that have not been renovated in decades that might or might not have complied with the code that was in effect at the time when they were done (and thus might or might not be grandfathered).

      • Exactly. The only problem with the houses in D.C. (and a lot of other old cities in the N.E.) is that sometimes they just encapsulate old plaster with drywall. This was very common in the 1980s/90s when flipping in D.C. started to take off. But just try and pull permit records from that era and who knows if they are available. Any work from modern (computerized records) time should be able to be researched. But since these houses are all going on to be 90-100 years old, you really have no idea what happened in the past with the house. So buyer beware.

        • I don’t see anything wrong with old plaster, even if behind drywall. I even prefer to have old plaster in walls, as it provides better acoustics. The exception would be wet or damaged plaster or multiple drywall layers inadequately installed on ceilings over old plaster that may be bearing too much weight to remain smooth or attached at all.
          I believe original details like plaster should be prized and fetch a premium, it’s better than new drywall.

          • The plaster is not the problem. It’s everything else that is wrong that is getting covered up by the drywall.

    • All houses in DC are not sold “as is.” That is what inspection contingencies are for. Perhaps what you are thinking of is something else but the concept of “as is” has to do with whether you have the ability to inspect something or not.

      There is nothing illegal per se about having a part of your house not “up to code.” Every single house in DC has something about it not up to code. You’re only responsible for it if it causes some liability or harm. No one is going to knock on your door and demand to inspect your internal stairs to see if you installed an “up to code” handrail and then fine you for it. And no one is going to walk away from buying a house because such a handrail wasn’t properly installed or installed at all.

      • Slightly incorrect. All real estate in D.C. is sold “As is” but with the exception of the seller is required to give the buyer a disclosure of any “known” defects (in Accordance with the 1998 legislation regarding disclosures). Once the buyer accepts the disclosure, it is up to the buyer to prove that the seller purposely withheld knowledge of a known defect of the property prior to the sale.

        It is very difficult to prove in court what a seller factually knew versus what the seller might have suspected. Unless the seller conveys a warranty with the property, it indeed is sold “As-Is” just like vehicles, boats, etc. Of course your mortgage company will probably require you to purchase title insurance before they will fund the sale. So ignoring the title, unless you purchase a warranty, any defects (including unpermitted work) transfers over to the new owner.

        I do agree that very few homes in D.C. are perfect. Even the new ones that are built on vacant lots will probably have just as many issues as those that are 100+ years old. But the new ones will come with a home warranty. The old ones will not. So buyer beware.

        • The seller is offering to pay for a remodeling warranty if we were to buy without permits.

          • HaileUnlikely

            What is the term of the warranty? 6 months? 25 years? Is the seller a major real estate developer who has done hundreds of successful flips in the DC metro area over a span of decades or is it a very obvious one-job LLC (e.g., “XXX Partners LLC” where XXX resembles the address of the property)? If long warranty from established business, that’s one thing. If it’s a short warranty or a warranty from a company that may appears likely to have ceased to exist by the time you try to make a claim against the warranty, that’s another.

          • Most home warranties are a crock. You think you’re getting this fancy, expensive coverage that will fix anything that goes wrong. They will find a reason to deny your claim, or pay you very little. That’s reflected in the cost – a basic one for a year or two is a few hundred dollars. Way less than a regular homeowner’s insurance policy. Do you really think they’re covering anything for that pittance of a premium?
            .
            This also does not resolve the potential issues with zoning, or any issues that might occur when YOU resell the property if the next person down the line brings this issue up. The fact that the developer is pushing you to buy it without the permits is the scariest part of this story. Run. Fast. I know it’s easy to fall in love with a house, but there will be another opportunity.

        • I guess we were talking about two different things. When I think of “as is,” I think that means we are not going to fix anything or let you inspect anything really – you take it or leave it. And clearly not every home in DC is sold that way. You can do inspections and have sellers work to remediate issues if they want to proceed with a sale. Obviously you cannot force them to do anything, but you’re also not forced to take the home “as is” either. You can walk away. What you’re saying is that once you buy it you own the issues. Sure, of course. But to go to the OP’s issues here – I think there are two different inquiries. One is to the quality of the work done whether permitted or not. And I’m not sure assuming permits were issued and DCRA inspected means you can really feel comfortable the work is done properly. It’s better than nothing I suppose, but you have to protect yourself through other means (e.g., an inspection contingency) as much as possible. The second inquiry is, assuming the work was done properly and hte only issue is that it wasn’t permitted, what does that mean for the buyer? It might mean nothing. I have never heard of the city coming in and forcing a subsequent buyer to tear down unpermitted work done by a previous owner unless it violates some other zoning law. The city can of course require the buyer to have things properly permitted, redo work, etc. if they want to make any improvements that require new permits. And to be clear, perhaps the city has the power to do that, I’m only saying practically speaking, I have never heard of the city being proactive about addressing unpermitted work unless it violates zoning laws and even then, usually in response to complaints from neighbors.

          As for resale, if you didn’t do the renovation, the chances a future buyer is going to require you to do anything as to permits is near zero. I had zero issues selling my house that had been previously renovated. Not one person interested in it asked about permits. Presumably if you’ve lived there several years with no issues, people relax a little about a renovation in this kind of market.

  • The bigger question is what house in D.C. wasn’t “unpermitted” at one time or another?

    If you really want assurances about the home you will buy in D.C., buy a vacant lot (there are still some in ParkView) and build new. Otherwise, assume the house probably has some issues here or there.

  • I bought a 100-year-old house in DC around 15 years ago that had been renovated many times, I’m sure. I don’t know if permits exist for any of the renovations. There is a basement rental, and because of that, I got a C of O shortly after I closed. Does anyone know if having the C of O (and going through all the required inspections to get it) would resolve any future problems with unpermitted work having been done in the past?

    • I also own a 100 year old house and I am far more concerned about any recent work done before purchase than ages old work. Realistically speaking an inspector is not going to complain about things original to the house that were to code at the time of construction, have not been modified and are no not in compliance with the code.

      But if the owner immediately prior to me built something illegally that is far more likely to become a problem when I need to renovate something as I inevitably will, the more recent the more problematic.

  • People seem to be conflating whether permits were approved or not and any issues that MIGHT arise from that with the quality of unpermitted work. The unpermitted work may not have any issues with it at all and so your only concern is whether down the road the city makes you pay to have the unpermitted work permitted. Or, it may be low quality work that you have to fix down the road and I promises you, that is a different calculation to make than simply relying on whether DCRA approved the permits and inspected the work. There are plenty of homes you could buy that were properly permitted and inspected and are still terrible craftsmanship that you will immediately have issues with.

    Obviously if you love the house and can spare the time to get the seller to get it properly permitted/inspected, do it. If you cannot, move on.

  • Agree with many others here about the risks, but depending on how you found out about permitting issues (and whether the seller has been forthcoming), I would also add that the DCRA catalog for permits and inspections (PIVS) is constantly inaccurate.

    • And let’s not forget that back in the 1980/90s, many contractors provided “gifts” to inspectors. So even having a permit and inspection does not guarantee anything.

  • Please do a lot of research about the flipper if you can. I bought from a flipper and it was hell. The place was flipped so poorly. We didn’t know any better as first time home buyers. Luckily we sold and actually broke even but it could have been much worse. Given this flipper didn’t get permits, I think that says a lot about the quality of work done. Run!!

    • Again, it MIGHT say a lot. And you should do your due diligence on finding out about the flipper. But, I bought a house that was nicely renovated, had zero issues, and some of the work was never permitted previously. I really don’t believe not having permits means the work quality is necessarily bad. It’s a red flag you should investigate. But I can tell you right now, you’re going to run into unpermitted work on any flipped house. Developers almost never get every single permit they need or are technically required to get when gutting and flipping a house. Look for electrical, plumbing, and permits relating to any structural changes.

      And don’t assume that if a flipper got permits and the work was inspected that it still isn’t shoddy. As noted above, I went to contract on a house that had all permits properly pulled and work inspected and it took about an hour before my inspector found and even I could have pointed out significant structural short cuts to an addition. I have no idea how the city passed it. But they did.

      • There’s a big difference between not getting *every* permit and not getting *any* permits. It’s fairly clear from the buyer’s comments that there are exactly zero permits on this complete flip. That’s just…whatever comes next after the too-far bridge.

    • Oh also, once you’ve decided, if you do not proceed, let everyone know the house in question so others can avoid the headache. Honestly, there needs to be more transparency around here with that. I wanted so desperately to post to POP when I backed out of the house that had structural issues so no one else would make the same mistake I did. But the sellers pulled the house off the market. No idea what they did with it.

  • How are they proposing to get the permits after everything is closed up? Aside from issues with unpermitted additions or structures that might run into zoning problems, a piece of paper with an approved building permit after the fact is worthless unless they tear out all of the drywall/flooring and get it inspected. Even then, the state of the DC inspection program is suspect at best (although they actually have cleaned house a bit, but also a lot of the good ones quit out of frustration). Everything in our flipped house was permitted and inspected per records. The amount of frankly INSANE sh*t I find behind the walls during our own upgrades continues to astound. Long story short: approved DC permits are no guarantee of building code adherence. Go with your gut, and you’ve probably already guessed what you are walking into. No amount of “remodeling insurance” will be worth the eventual cost if they did shoddy work. You’d be lucky with 50% payout on incurred costs.

  • Also, when you do decide to sell the property, you will have to disclose the fact that you know that work was done without the proper permits. There is a representation in all standard real estate contracts regarding the property conforming to all applicable laws, and if you know that work was done without the proper permits, then, technically, you do need to disclose this fact. It’s pretty easy to look up permits on DCRA’s website, so any future buyer can verify this. You don’t want to inherit someone else’s mess.

    • HaileUnlikely

      Good point. More importantly, the fact that this buyers knew that the addition lacked the proper permit will be a matter of record if the buyers accepts compensation (note that these buyers have indicated above that seller has offered compensation and buyers are considering it) in exchange for overlooking the permitting issue and purchasing the house anyway. Thus, even if the buyers are ok with accepting this risk right now, this whole conversation should make them think a few years down the road to issues that may arise when they may be trying to sell.

      • Agreed, but if, in a few years, there haven’t been any structural issues with the addition, you might pretty easily find a buyer willing to overlook it as well. Sooner or later the chain of knowledge is too tenuous for anyone to really have knowledge of anything. And in DC, if you can feel resolved that there are no structural issues, you’ll probably consider accepting a house with an unpermitted addition.

        Caveat that of course without knowing if this house is in a neighborhood with high likelihood of appreciation and development. People don’t ask a lot of questions about this kind of stuff if they really want a house in a good neighborhood and don’t anticipate doing any renovations of their own in the near future. I seriously had zero people ask me about the renovation on my house when I sold it, as it was done before I bought it. Also, I’m pretty sure the relevant disclosure doesn’t ask about knowledge of work being done unpermitted? I just flipped back through mine and the disclosures in DC ask about nonconforming uses and violation of building restrictions, which I am not sure would clearly cover permits for construction? At least, a savvy lawyer might be able to say that is sufficiently ambiguous to cover you if you say you didn’t think it meant was any work unpermitted by the prior owner.

  • I just bought a row house with lots of unpermitted work – like the closed in rear porch that’s also unpermitted on all 20 neighbors. Works is of the handyman variety, not the flipper variety. As a few people have said, there are two issues that are only loosely linked: regulatory and structural. Both can be fixed at costs of time and money.

    I’d recommend you get a very thorough inspection including drilling holes in walls and using $20 fiber optics to look around inside to confirm that you will be living in a safe, durable home and identify the permit issues. Once you complete that, call a housing lawyer and pay $500 for an hour to sort out the expense of addressing the regulatory issues. Then you take the market price minus (the cost of repairs to get to code plus the cost to address regulatory issues). And then talk to the seller. The seller is likely sitting on a high interest loan and can afford to pay money but not time to address the issues.

    This seems like a great place to create a win/win situation for both of you. I looked at 50 homes over the last three months and the majority had unpermitted work and a majority also had work that was completely out of line with the building code when the work was done. That’s just the reality of the DC market.

  • CNBC did a piece on a flipped home in DC where the city is requiring the owners to tear down the back extension on their “new” 2BR/2BA house because no permits were pulled.
    Question: why is their real estate agent not directing buyers to look up this info?!?! It’s a crazy dereliction of duty.
    http://www.cnbc.com/2017/03/09/buyer-beware-those-picture-perfect-flipped-homes-can-be-masked-money-pits.html

  • It depends… You don’t necessarily need to walk away from this purchase. If the work is unpermitted, that is a big red flag. But if the work was done with permits that are still open, that’s different. (And from your description, the problem appears to be the latter.) The fact the house has open permits awaiting closure might not indicate underlying problems.

    It might be that the contractor or previous owner forgot to conduct inspections with DCRA after the work was done. It might also be that the inspections were conducted..but DCRA did not properly record the result of the inspections.

    When I sold my last house, in which I had done extensive remodeling, both of the situations above occurred. I had pulled some of the permits, and I was not aware that I needed to conduct inspections to close the permits. Other permits were pulled by the contractor, and although inspections were condcuted DCRA did not record the results. The same thing happened with the house I bought.

    I would ask the seller to conduct the inspections and close the permits with DCRA. I did that for the sellers while waiting to close. DCRA scheduled the inspections within a few days of my request. Even though the permits won’t show as closed on PIVS, DCRA will leave the seller with written evidence the permits were closed.

    If this were a different (read: buyers) market with a houses that were fairly indistinguishable from each other (much like suburban developments tend to be) I would say walk away. But the open permits don’t necessarily signal an intractable problem.

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