You’ve remodeled your home and turned it into your castle, your refuge and your dream home. When you did the remodeling, you used reputable contractors, but because they were friends, family members or other people you knew, no one pulled permits for the work. Now, you’re trying to sell your home and you don’t know what to do.
The best option? Confess.
It’s a Matter of Public Record
If you are working with a real estate agent, he or she will ask you if there is anything to disclose to potential buyers. Remodeling or renovating your home without the proper permits is one of those “problems” that you are required by law to disclose. And if you don’t fess up to the permit-less work, it may be discovered anyway by the title company or by a search of the public housing tax and deed records.
Public records contain the square footage of the home, including particulars like how many bathrooms and bedrooms the home has. If you add on another bathroom or bedroom without a permit, then there is going to be a discrepancy when the title and mortgage companies for the buyer get involved when coordinating the purchase of your home.
[Mortgage Help: Get your free credit report and see if your credit score is mortgage qualified]Confession Consequences
The first consequence of your confession is that it may cause an issue with an interested home buyer. The good news is that this is a fixable situation. The fix, however, may require you to confess to your city or county building department. Typically, the building department will charge a small fine for not pulling the permit up-front. The department will then require you to pay the permit fee that you should have paid to begin with, which is typically based on the cost of the remodel.
Renovating a home without permits may have other consequences as well. What if the additional bathroom or bedroom, or other work you did without a permit is damaged in a flood, hurricane or fire? When you make your insurance claim, the insurance company may deny the claim because the work is technically not legal – that room doesn’t exist to them.
If you do sell the home and the buyer finds out later that work was done without pulling a permit, they can also slap you with a lawsuit. And, probably one of the worst consequences of all, although rare, is that the city or county building department may require you to tear down any work completed without a permit, especially if it is not up to code.
If you have done any remodeling, renovations or made additions to your home without pulling a permit, the best thing to do when you get ready to sell is to fess up to everyone. It may cost you some extra money before the sale takes place, but it can save you from lawsuits, additional expenses and further hassle in the long-run.