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Big Island The Island of Hawaii
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Old 09-13-2008, 02:56 PM
 
2 posts, read 14,743 times
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I am considering buying an unpermitted dwelling in the Puna District with owner financing. Will there be a problem when we go through escrow? In other words, will the local government get involved in this. What about the septic system? Will I need to bring that up to code in this situation?
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Old 09-13-2008, 04:23 PM
 
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Here in Maui County, there has been a huge crackdown on unpermitted structures and improvements. Fines levied used to be something that people would take the risk of incurring, but now they are large enough to be daunting. My neighbor had a fine of $7000 for a single unpermitted improvement. Maui County can take a fine of up to 30% of the value of the structure or improvement.

Even if you didn't have a problem with escrow, you could well have a problem if the County ever did require an inspection in the future. The same neighbor is having to tear our two concrete walls, put in off street parking, and change the interior of her home - all things that had been done by the former owner. This is now her price to pay, for having bought a home without permitted improvements.

You might want to negotiate something in the cost of the home, to allow for anything you will have to do in the future or during the purchase. Maybe you can add in to the contract to hold a certain amount in the escrow in case it comes up during the purchase, plus a reduction in the cost of the home for possible future fines and changes.

Sorry, don't know about septic.
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Old 09-13-2008, 04:49 PM
 
Location: Big Island of Hawaii
1,375 posts, read 6,283,936 times
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Hi j,

Are you working with a real estate agent? If you are, they should be able to guide you through the process in a way that gives you confidence to feel you are well informed about the ins and outs....

If not, please consider doing so. You need to decide between a PMM or agreement of sale (recorded or unrecorded?) research flood zones, understanding the zoning, etc......and most of all, be sure you aren't over-paying!!
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Old 09-14-2008, 12:03 AM
 
Location: Moku Nui, Hawaii
11,048 posts, read 23,865,015 times
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Quote:
Originally Posted by janscalise View Post
I am considering buying an unpermitted dwelling in the Puna District with owner financing. Will there be a problem when we go through escrow? In other words, will the local government get involved in this. What about the septic system? Will I need to bring that up to code in this situation?
Escrow won't care since the financing folks (the owners) probably are not requiring any sort of inspection.

If you want to sell the property to someone else who wants to get a bank loan, then it probably wouldn't clear escrow since buildings don't exist (as far as banks and lending institutions are concerned) until they have a building permit. The electric company won't give you power and if it has temporary power, I believe that will end within two years if you don't finalize the permit (providing it has a building permit in the first place).

Now if one of the neighbors complains to the Building Department about the structure, then you will have to get a building permit or tear the structure down. That can be a difficult and expensive thing to do, especially if it was not built to code and code is constantly changing so even if it was built to code when it was built, the code may have changed since then.
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Old 09-14-2008, 06:11 PM
 
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Thanks for the replies!!! Appreciate it.

Jan
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Old 09-15-2008, 09:28 PM
 
Location: Cincinnati
1,749 posts, read 8,314,126 times
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County/Government is undermanned and apathetic on this issue unless you're buying land in a Conservation zone (like Waa Waa). If the latter is the case, they'll come through with bulldozers. This, however, is rare. Most unpermitted Puna structures (and there are a few thousand) go undisturbed by authorities.

The only snag is getting a real mortgage on the property. Technically what you're buying is raw land.
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Old 09-16-2008, 01:52 AM
 
Location: Moku Nui, Hawaii
11,048 posts, read 23,865,015 times
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It's not the authorities who cause the trouble, it is the neighbors who call the authorities in. Once they've been called, then they require the permits to be obtained. That means the structure has to be brought up to current code and if it has electrical or plumbing work then the work has to be signed off by a licensed electrician/ plumber. Generally you need an architect to sign off on the blueprints as well. It's not an easy can of worms to get to the bottom of.
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Old 09-18-2008, 04:47 AM
 
Location: Orange County, CA
29 posts, read 131,455 times
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Quote:
Originally Posted by hotzcatz View Post
It's not the authorities who cause the trouble, it is the neighbors who call the authorities in. Once they've been called, then they require the permits to be obtained. That means the structure has to be brought up to current code and if it has electrical or plumbing work then the work has to be signed off by a licensed electrician/ plumber. Generally you need an architect to sign off on the blueprints as well. It's not an easy can of worms to get to the bottom of.
The authorities got more calls from the good neighbors in Konafornia ... compared to Puna .
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Old 09-18-2008, 05:47 AM
 
4 posts, read 23,301 times
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It is my understanding is that the state of HI allows for 1 unpermitted building on your property without any problems. Is that not the case??
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Old 09-18-2008, 12:47 PM
 
Location: Pahoa Hawaii
2,081 posts, read 5,568,369 times
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Building permits are issued by the counties, not the state. All construction is supposed to be permitted. The County of Hawaii recently found itself in violation by erecting truck sheds at Hilo baseyard w/o permits. Citizen complained, sheds were torn down.
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