Buying Homes Remodeled Without Permits And Risks Associated

This Article Is About Buying Homes Remodeled Without Permits And Risks Associated

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.

Buying Homes Remodeled Without Permits: Hurdles With Permits

what might be the obstacles with the permit

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. Home Buyers Buying Homes Remodeled 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: Reasons Why Homeowners Remodel Without Permits

Reasons 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.

Building Permits Cause Delays To Start The Renovation Project

Whether building permits cause delays in the start of 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.

Risks Associated With Home Purchase On Home Remodeled Without Permit

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.

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. 

Buying Homes Remodeled Without Permits is common in many areas like the city of Chicago. Home Buyers considering Buying Homes Remodeled Without Permits, these are the issues they need to consider.  Plus the appraiser might not count the improvements done when Buying Homes Remodeled Without Permits such as a converted garage space into living quarters.

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