Buying a remodel--seller didn't get building permits (Phoenix: mortgages, lenders)

[Arclandia]

Hi,

I'm looking to buy my first house in the city of Phoenix. There was extensive remodeling done (new roof, new plumbing fixtures, new bathroom, moved walls, etc.) with licensed contractors.

They didn't get building permits.

I did some checking and the city of Phoenix does have a document online indicating that they can choose not to penalize the homeowner if the owner chooses to go back and make it honest. Choose is the keyword--I would still have things ripped up and they could go ahead with the fine.

If I look for a new house, it will probably end up costing $10-15k more for another house in this area (due to price increases and negotiating).

I honestly don't know what to do. It appears to be pretty common in Phoenix to cut this corner, and no one brought up building permits until I did.

Any advice? A huge part of me wants to run the risk.

Thanks!
Jen

[Zippyman]

You don't need a permit in phoenix to move non-load bearing walls, replace a roof with the same material (you do if you change from shingles to tile), or to replace plumbing fixtures. The only thing that would concern me is if there were outlets added or moved, thats the only thing you mentioned that would require a permit. Even so, its incredibly easy to see if electrical work was done by a non-pro.. diy work doesnt generally look at all like pro work.. just having a pro pop a couple outlets & peek at them would tell the tale.. the way the wires are placed, stripped & terminated tells the story.

[Arclandia]

Thanks, Zippyman!

I understand what you're saying--a majority of the work wouldn't have needed a permit in the first place. So that's good.

The new bathroom would have had new electrical and new plumbing installed. Would that be a big issue, if that were the only item that needed a permit (but didn't have one)?

Jennifer

[Ponderosa]

Are you concerned about the safety? Like you said, it is quite common that people ignore building permits (but not necessarily codes). Why turn yourself in?

[Arclandia]

I don't think safety is the issue.

I've mentioned it to my realtor, but not to anyone in the permit office. I don't want to turn myself in unless I have to, such as a future remodel or prep to sell the house in 7-10 years (if ever).

Thanks!
Jennifer

[Zippyman]

I doubt the bathroom would have required a permit, unless they relocated something like a shower or a toilet.. pulling a vanity out, and replacing the lines & waste trap doesn't require a permit.. replacing an outlet doesn't require a permit, as long as it isn't moved..

New romex (wire) has a date written on it, and has for at least ten years, so it's obvious if a line has been added.. & when it was added.. it cant be "original" if it has "july 2012" written on the insulation every foot or so!

I would be concerned if a new wall had outlets in it - or if I saw newer breakers next to old breakers in the electrical panel. They either tapped an existing circuit, or added a new circuit without a permit, so that would be concerning.. but if the work was approved by my electrician, I would be ok with it.. there are a lot of "tells" in wiring.. a pro can tell if the work was done by another pro.. just like a barber can tell if someone else cut your hair..

That being said, I've had licensed & insured contractors add a garage circuit without a permit, and they wouldn't have done anything differently *with* a permit.. except take a week longer waiting for the building inspector to sign off..

I would happily disclose the unpermitted work to a new buyer, take it or leave it.. so the minimum I would require from a seller is full disclosure.. what was done & who did the work.. any evasiveness would be the end of the deal.

That said, I've seen quite a few homes with wicked unpermitted work done, and apparently approved by lenders & appraisers for mortgages.. it doesnt seem to make a property "unsellable" here.. But I (personally) wouldn't accept a disclosure statement on an obvious flip that's crossed out & says "seller never lived here".. that seems to be quite common these days..

Pretty much every disclosure statement I've ever seen has at least one lie in it - water heaters require a permit for replacement & no one ever pulls a permit for that..

If they hired work done, they *know* what was done & who did it, and they are required to disclose..

[Arclandia]

Thanks Zippyman!

It is a flip that has not been lived in since the remodel. It passed home inspection very nicely. There was a scorched wire, but I'm asking that be fixed.

I'll watch the disclosure very carefully. Assuming it lists the contractors, I'll check them out.

Jennifer

[Zippyman]

Originally Posted by Arclandia

Thanks Zippyman!

It is a flip that has not been lived in since the remodel. It passed home inspection very nicely. There was a scorched wire, but I'm asking that be fixed.

I'll watch the disclosure very carefully. Assuming it lists the contractors, I'll check them out.

Jennifer

You should have the disclosure *already* if you've done a home inspection.. you should have had it before an offer was written, really.. don't accept a blank one & kick your agent in the (knee) if they didn't get that disclosure to you already..

[Arclandia]

I have a document listing the work that was done. It doesn't list contractors and isn't written in an official looking form.

It has a paragraph giving an overall project description and a bullet list of everything that was done in detail.

Thanks,
Jen

[Steve Pickering]

I am still waiting for an attorney to give advice on this. How did the city know there was a remodel?