Non-permitted structures (Hilo: home, to buy, school)

[Balad1]

Originally Posted by IsVogBadAllTheTime

what are the consequences of buying an unpermitted home? can you insure it, add on, or pay any penalty?

No insurance, no mortgage, no grid electric (or higher rate), no legal residency permit and the possibility it will burn down in the middle of the night with you and your family in it.

PS: Oh yeah, try selling it in the future.

[hotzcatz]

Lately the Building Department has been a bit more aggressive about tagging unpermitted structures. As the County revenues tighten up, going after unpermitted structure fines might be higher on their "to do" list.

If you buy an unpermitted structure you can not get insurance (or a mortgage). You can add onto it, but not legally until the first part has gotten a permit. If (when) your neighbors turn you in, you will have the choice of getting a permit (which includes bringing the structure up to current codes and paying twice the amount for the permit itself), paying fines until it is either torn down or permitted, or tear it down.

There are valid reasons for unpermitted structures to be less expensive.

[alaskangrown]

I was kind of delighted about this thread! I am building (almost done!) without a permit (we are in the process of getting one, and it's been an ever-loving mess) and I was nervous about our neighbours, who have a BIG (as in THREE stories, three-car garage) home and expensive cars complaining about us building with no permit posted (do they post them in Hawai'i like other states? I don't know, b/c I never see them outside of building sites, but I wasn't sure if that was just because no one has them!?) so I looked up their plot on the tax website.

That gorgeous house has no permit.
The neighbour across the street, with the really nice yard, simple little ranch home, no permit.
Literally, there isn't a permitted structure within 3 streets of my house.

So, while I don't have to worry about someone ratting on me for building before my permit is approved, it DOES concern me that Hawai'i is losing out on all this revenue, simply because they won't simplify the permitting process.

Holy cats!

[HankDfrmSD]

Originally Posted by Koale

Aloha,
I'm relocating my family to the Big Island soon. Been looking at properties and find it interesting that so many listings advise that either some/all/none of the dwellings are 'permitted'. This must be the norm for some reason but how are these places expected to be sold? Realtors advise against purchasing them for the simple reason that it will be difficult to secure a loan not to mention having to permit them and bring all utilities/structures up to code. Anyone have any thoughts or resources on this?

My experience is on Oahu, not the Big Island, but I think there is a distinction you should explore.

On Oahu, there are many homes where listings disclose non-permitted additions, but the original structure was fully permitted. These are cases where the homeowner purchased a fully permitted house and later added a roof over a lanai, or enclosed a carport, or the like, without getting a permit. I'll bet such homes are insurable, mortgageable, etc.

My point is that you should not reject a listing just because "non-permitted" appears. Investigate.

Hank

[KoaKine]

Originally Posted by HankDfrmSD

My experience is on Oahu, not the Big Island, but I think there is a distinction you should explore.

On Oahu, there are many homes where listings disclose non-permitted additions, but the original structure was fully permitted. These are cases where the homeowner purchased a fully permitted house and later added a roof over a lanai, or enclosed a carport, or the like, without getting a permit. I'll bet such homes are insurable, mortgageable, etc.

My point is that you should not reject a listing just because "non-permitted" appears. Investigate.

Hank

But as a help here if you try to buy a home that has disclosed unpermited structures or any part your lender will not include those parts in the overall loan and could cause the lender not to loan at all. I have a friend that just tried and was denied because of the amount of unpermited .

[cynmkolohe]

Plus 1 to KoaKine for pointing that out. In the current lending environment, ANY unpermitted addition (esp if attached to the main structure) can cause problems during underwriting.

[hotzcatz]

Originally Posted by alaskangrown

So, while I don't have to worry about someone ratting on me for building before my permit is approved, it DOES concern me that Hawai'i is losing out on all this revenue, simply because they won't simplify the permitting process.

Holy cats!

No worries, they are still taxed even if there is no permit.

[mdand3boys]

But they are only taxed if the County finds out about it.
They could make the process as simple as a drawing on a paper napkin, but the reality is that people would still try and avoid the process.

[hotzcatz]

It depends on which branch of the County you are referring to. The County Tax Department is really up on knowing where structures are and charging tax on them. So far I haven't ever heard about a structure they don't know about and charge tax on. They actively go out and physically check their territories for structures to charge taxes on. Nobody has ever asked me to draw up "as builts" to get a permit for a structure the County Building Department knows about that the Tax Department does not know about.

The County Building Department doesn't go looking for structures so they generally don't know about them unless someone goes for a building permit or their neighbors call in about a building violation. Since most of the County revenue is from the taxation of structures (permitted or otherwise) the County still gets it's revenue. Which is why I suspect they haven't been all that diligent about enforcing the unpermitted (but still taxed) structures.

[alaskangrown]

I looked up my neighbours on the County Tax Website- anyone can, if you have a plat map. According to the website, and not a single one of my neighbours pays more than $100 a year, or has a. I chatted with one a couple of days ago, and she's been living in her house for 17 years, not permitted, and according to the tax website, there is no structure on her land. As far as I can tell, in my neck of the woods, NO ONE is paying adequate property taxes.