This guide covers the risks and what to do when buying homes remodeled without permits. Many homeowners realize they need building permits on just about any renovation they need to do to their homes. Municipalities and county building departments require building permits on just about anything and everything. You need building permits to install roofs, gutters, windows, kitchen, and bathroom remodeling, basement and attic remodeling, electrical work, plumbing work, additions, painting, installing a fence, or just about any type of home improvement. In the following paragraphs, we will cover what to do when buying homes remodeled without permits.
How Can You Legalized When Buying Homes Remodeled Without Permits
Buying homes remodeled without proper building permits can pose several risks and challenges. In this section we have some factors to consider. First important issue to take into consideration buying homes remodeled without permits are legal Issues: Renovations without obtaining the necessary permits may violate local building codes and regulations. This can result in fines, penalties, or even legal action from local authorities. Additionally, if you purchase a home with unpermitted work, you may become responsible for rectifying any code violations.
Quality of Work When Buying House Remodeled Without Permits
Without permits, building inspectors have no oversight to ensure the renovations are done correctly and up to code. This could mean that the quality of work may need to be better or meet safety standards, potentially leading to issues down the line.
Insurance Concerns When Buying House Rempdeled Without Permits
Insurance companies may hesitate to provide coverage for unpermitted work. Suppose an issue arises related to the unpermitted renovations, such as a fire or structural damage. In that case, your insurance provider might refuse to cover the damages.
Resale Complications Buying Homes Remodeled Without Permits
When it comes time to sell the property, you may encounter difficulties if the unpermitted work is discovered during the sales process. Buyers may be wary of purchasing a home with unpermitted renovations, which could impact the property’s resale value.
Financing Challenges Buying Homes Remodeled Without Permits
Mortgage lenders may be reluctant to finance properties with unpermitted work. This could limit your options regarding securing a mortgage or refinancing the property. Before purchasing a home that has undergone unpermitted renovations, it’s essential to thoroughly research the situation and consider consulting with professionals such as real estate agents, inspectors, and attorneys who can guide on the potential risks and implications. In some cases, it may be possible to obtain permits for the work retroactively. However, this process can be complicated and costly. Talk to us if you want to buy homes remodeled without permits
Hurdles With Getting Permits When Buying Homes Remodeled Without Permits
Municipalities require building permits to take in revenue, see if the improvement justifies property tax increase and human safety. However, most homeowners will disregard obtaining a permit and do the work without it. However, doing home improvement without a permit can end up backfiring on the homeowner when selling their home. It is best recommended to get proper permits when doing home renovation projects. This holds especially true when you are doing larger structural projects.
Disclosure When Selling Your Home
Home sellers need to disclose everything about the home they are selling including work that has been done without a building permit. Homebuyers buying homes renovated without permits need to weigh the pros and cons prior to making an offer. Some lenders are much more strict when qualifying borrowers Buying Homes Remodeled Without Permits. Lenders in Chicago and its surrounding suburbs understand that many Chicago properties have illegal basement apartments. Many Chicago homeowners of two-unit buildings have illegal basement apartments and are receiving rents. If a home appraiser has an issue with an existing rented illegal basement apartment, all the sellers need to do is disconnect the kitchen and classify it as a remodeled recreation room.
Why Are Building Permits Required
A permit is normally required for all types of repairs including a general repair permit on most municipalities and counties. Permits have two functions:
- Safety
- Revenue
Pulling the proper permit will require that all electricians, plumbers, HVAC professionals are properly licensed and bonded. The municipality will most likely send out a building inspector to inspect the finished product and make sure everything has been done per code. Building permits also cost money. The city or county will charge for permits and inspection fees. Depending on the type of work you do, cities and counties can raise your property taxes when they see that you have pulled a building permit to do enhancements to your home. Home improvement such as adding a room, remodeled your basement, or turned the attic into a living space adds value to your home. Increased value to your home means higher property taxes.
Buying Homes Remodeled Without Permits and Why Homeowners Remodel Without Permits
In many cities, like Chicago, almost every building improvement requires a building permit. However, a large percentage of Chicago homeowners do work without building permits. A substantial percentage of basement apartments in the City Of Chicago are illegal basement apartments. The City of Chicago is well aware that these illegal basement apartments have been renovated without proper business permits.
Whether you remodel the kitchen, bathroom, basement, attic, or even your garage, the city requires the homeowner to pull a building permit.
There is a gang of building inspectors that canvas neighborhoods to catch homeowners who do work without a building permit. The city relies a lot on the fees it collects from issuing building permits. However, recent studies prove that almost 90% of homeowners do work without building permits.
Reasons Homeowners Do Not Pull Building Permits
Here are some of the major reasons why homeowners do work without pulling proper building permits. Building permits can be extremely costly. Building permits are normally based on the cost of the project. The higher the cost of construction or remodeling, the more the building costs will be.
One of the major reasons why homeowners get caught doing work without a permit is because their neighbors report them to the city or county building department.
If you get caught doing work without a building permit, you will get fined. The building inspector will issue a stop order until you go to an administrative hearing. At the administrative hearing, you will need to get the proper permit and pay the appropriate fines.
Buying Homes Remodeled Without Permits: Red Tape With Permits
Unnecessary stipulations: The city building code may require ridiculous stipulations on smaller remodeling projects. A city building inspector may require to redo your whole electrical system for just doing a kitchen remodeling which can add thousands of dollars. A building inspector may require to strip your roof instead of installing a new layer of roofing shingles to your existing roof. Most homes can sustain three layers of roofing. However, many municipalities have stricter requirements and may require the homeowner to strip the roof. A few hundred-dollar projects can cost thousands of dollars. Talk to us if you want to buy homes remodeled without permits
Building Permits Cause Delays To Start The Renovation Project
Building permits cause delays: Dealing with the building department is like dealing with the IRS. If you have a project that requires multiple inspections before you can proceed to the next stage, a building inspector may not be available to come out to inspect the project for days or weeks. This will cause delays in the overall project and may cost you more for the project in general. A project that could have been completed in a week could take more than a month due to having a building permit.
Building Permits Can Take Weeks or Months to Obtain
Depending on the municipality, a building permit can take weeks or months to obtain. Some cities like the City of Chicago have permit expediters who are ex-city building inspectors with a lot of clouts who charge homeowners a substantial fee to expedite building permit request. Most of these permit expediters know the building inspectors and were their ex-colleagues. Many of the permit expediters wine and dine building inspectors and can normally get major favors. Chicago is notorious for public officials accepting kickbacks and bribes. These are strong statements but I know it is true and if you need to have a building permit fast in Chicago, you need to hire a connected building expediter.
What to do When Buying Homes Remodeled Without Permits
Pulling building permits on a remodeling project is always a good idea and it offers the homeowner a sense of security that the contractor has done the work per code. I strongly recommend those homeowners who have little to no construction knowledge to always pull building permits even if you have a reputable contractor. There are many fly-by-night contractors and comedians who are contractor wannabees. You should not jeopardize the family’s safety. There are risks with a home purchase on a home remodeled without a building permit.
How Can I Fix To Be Compliant When Buying Homes Remodeled Without Permits
The homeowner’s insurance may not cover the area that has been remodeled without a building permit. If a remodeling project was not done correctly such as faulty wiring without the proper permits, then the insurance company might not cover the loss. If the city finds out that the work was done without pulling the proper permit, the city might issue a demolition order and require you to tear everything out and restart with a proper permit. The city can issue extremely expensive fines for those who get caught without having the proper permit. Buying homes remodeled without permits is not recommended.
Who is Liable Buying Homes Remodeled Without Permits
Buying homes remodeled without permits is common in many areas like the city of Chicago. When homebuyers consider buying homes, homebuyers will have issues they need addressing. It may not be right aways, but sooner that later the building department will catch it. You may also run into hurdles trying to get a renovation loan. Homebuyers need to consider the risks versus rewards buying homes remodled without permits. Plus the appraiser might not count the improvements done when Buying homes remodeled without permits such as a converted garage space into living quarters. Talk to us if you want to buy homes remodeled without permits
FAQ – What to do When Buying Homes Remodeled Without Permits
1. What risks are associated with buying homes remodeled without permits? Purchasing homes remodeled without proper permits can lead to legal issues, including building codes and regulations violations, potential fines, and the need to rectify code violations. Additionally, concerns may arise regarding the quality of work, insurance coverage, resale complications, financing challenges, and hurdles in obtaining permits.
2. How does the absence of building permits affect the quality of work in a remodeled home? Without permits, building inspectors have no oversight, potentially resulting in work that doesn’t meet safety standards or code requirements. This lack of supervision may lead to issues with the quality of the renovations and pose future problems.
3. Can insurance coverage be affected when buying a home remodeled without permits? Yes, insurance companies may be hesitant to provide coverage for unpermitted work. In case of issues related to unpermitted renovations, such as fire or structural damage, insurance providers might refuse to cover the damages.
4. What challenges might arise during the resale of a property with unpermitted work? Buyers may be cautious about purchasing a home with unpermitted renovations, potentially impacting the property’s resale value. Disclosing unpermitted work is essential when selling a home and could lead to complications during sales.
5. Are there difficulties in obtaining financing for homes remodeled without permits? Yes, mortgage lenders may be reluctant to finance properties with unpermitted work. This limitation can affect your options for securing a mortgage or refinancing the property, emphasizing the importance of thorough research and professional consultation.
6. Why do homeowners sometimes remodel without obtaining building permits? Homeowners may avoid getting building permits due to cost concerns, as permits are often based on the project’s construction expenses. Additionally, some homeowners may need to know the potential consequences or find the permit application process cumbersome.
7. How can homeowners rectify the situation when buying homes remodeled without permits? Homeowners are advised to research the property thoroughly, consult professionals such as real estate agents and inspectors, and consider retroactively obtaining permits for the work. However, this process can be complex and costly.
8. What role do building permits play in the remodeling process? Building permits serve dual functions of ensuring safety and generating revenue for municipalities. They require licensed professionals, such as electricians and plumbers, and involve inspections to ensure code compliance. Permits can also lead to property tax increases based on the added value from home improvements.
9. How can buyers ensure compliance and safety when purchasing homes remodeled without permits? It is strongly recommended to pull building permits for remodeling projects, even with reputable contractors, to ensure work is done per code. This is crucial for homeowners with limited construction knowledge, as unpermitted work may lead to insurance issues, fines, or demolition orders.
10. Who is liable when buying homes remodeled without permits? Homebuyers should be aware of potential liabilities, as issues with unpermitted work may arise later. This could lead to challenges in obtaining renovation loans, issues with appraisals, and potential fines if the city discovers the need for proper permits. Professional advice is crucial in navigating such situations.
