Risks Involved in Buying a House With Unpermitted Renovations

3 minutes read

Buying an existing home can be exciting and scary at the same time. While you would hope the seller discloses everything there is to know about the home, that’s not always the case. One area they often cover-up, whether knowingly or unknowingly, is with unpermitted renovations. If the sellers did renovations themselves or even had a contractor do them without checking with the city first, it could leave you with unpleasant repercussions as the new owner.

Compare Offers from Several Mortgage Lenders.

Before you buy a home, make sure you specifically ask about any renovations the sellers completed on the home. If there are renovations, ask to see the proof of the final inspection by the city so that you know you won’t face any of the following consequences.


Once you own the home, if there’s an issue with the renovations, they are your responsibility. In other words, you can’t go after the seller if the city comes down on you for unpermitted renovations. For example, if the city requires that you tear down the renovation and build it again up to code, you are responsible for the work and the costs. It’s not unheard of to have to completely take down a renovation and not do it again.


If the city charges penalties for unpermitted renovations, you will be responsible for the charges. Again, even though you didn’t make the changes, you own the home. That’s all the city cares about – the owner of the home must pay the penalties and/or permit fees that were never paid in the first place.


If the unpermitted renovations affected the home’s value, you may be responsible for back taxes. Your county’s tax authority may determine when the changes were made and then charge the back or missed taxes accordingly. Not all renovations have any effect on the home’s value, but why take that chance? Back taxes could get very costly, especially if the county charges you a fee for missing the due date for those taxes.


If you suffer a loss in an area of the home that has unpermitted renovations, the insurance company may not cover the cost of the damages. Again, this is something you may not even know until the damage is done and you are facing financial consequences. This is why it’s so important to inquire about any renovations that were done so that you can make sure they are permitted and/or that insurance will cover any damages that occur to them.

Click to See the Latest Mortgage Rates.


So how do you protect yourself from unpermitted renovations? The first line of defense is to straight out ask the seller about any renovations they did. Hopefully they are honest with you. If they tell you they did do renovations, ask for documentation showing the work along with the permit or approval by the city/county. If the seller doesn’t have these documents, do your own research with the city to make sure the improvements were approved.

You should also solicit the services of a professional inspector. This professional can usually tell rather quickly if something isn’t right. They have an eye for detail and can tell when something wasn’t done up to code. If they see a red flag, you should be asking more questions of the seller or canceling the sale and moving onto a home that doesn’t have unpermitted renovations.

The most important thing you can do is make sure all renovations were done with approval. Why take a risk? Not only are you at financial risk, but the integrity of the home could be at risk as well. You want to make a good investment, not one that will cost you more than you intended once it’s your home. Ask pointed questions and doing your own research is the best way to protect yourself in this situation.

Facebook Twitter LinkedIn Telegram Whatsapp Pocket

Related Posts:

Houses that are move-in ready are a lot more convenient thinking that you don’t have to worry about anything else other than moving in. However, these properties can be very expensive. What makes fixer-upper houses very appealing is the attractive price tag. W...
Buying a home that is in perfect condition and has the exact layout you desire is no easy task. In fact, some people find it near impossible. Rather than giving up or giving in to purchasing a home that you consider “just okay,” you can use the 203K loan progr...
Perhaps it’s easy to say that house hunting is an exciting part of every home buying journey. This is where you decide what type of house fits your needs and what is well within your budget. Before all that, it’s ideal to get pre-qualified for a loan first. Th...
Have you fallen in love with a home that won’t pass Fannie Mae standards for financing? Maybe it needs some renovations to bring it up to code. If you don’t have the cash lying around to pay for the home, you may think you’re out of luck. Compare Offers from S...
Did you know that not all home improvements have a good return on investment? It sounds crazy, but you can put thousands of dollars into a repair and see very little of that amount back in the home’s improved value. In other words, you should do your research ...
Getting a 203K loan is a lengthier process than any other loan, but the work is worth it in the end. Because you are receiving money to make renovations to the home, the lender needs to know exactly what the home needs as well as what you wish to do to it. You...