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We are under contract on a FSBO home in FL and recently had an inspection and appraisal completed. It was discovered that the seller completed work to convert an unenclosed lenai into a finished room. The county does not have a permit for the room construction. There is an electrical issue that needs to be repaired and the foundation is not to code.
We are awaiting a reply from the lender to see if they will require the seller to have the room brought to code prior to the sale or have the square footage of the room be listed "as is" on the appraisal.
I am aware that there could be a fine/penalty from the county, issues with insurance as well as difficulty if we do work in the future requiring a permit or if we sell if the prior work is not brought to code.
Wondering if anyone has experience or advice in this area?
Depends on how you want to proceed. If you really love this home buy it only on the condition that the non permitted room does not exist. This will only work if your lender is OK with it.
A friend lives in a home on a hillside. It has a view of the ocean. The home was built in the 30's. They have lived in the home for many years now. The ocean view side of the home was useless as it is too steep to do anything with. They wanted a deck built out there. In California to build a deck on their home they have to get city approval, they have to get approval from the coastal commission, and because it is on a hill they have to get approval from a hillside commission. It is a costly process. They had an engineering company put some plans together and they hired a contractor to build it. All of this was built to code without getting a permit from the coastal commission or the hillside commission. Other homes have similar decks on them that were built long before you had to do all this paperwork. They did not do anything unsafe or unusual for the area. The deck added value to the home. They built it knowing that if they ever sold that the deck would not be included in the sale price. It is as if the deck does not exist.
I am not suggesting that people build things that are not permitted and never build anything that is not safe. What I am saying is if you do realize that you can not ask money for that part of the build.
The problem is not going away. Since the seller created the problem, it would be best to have the seller correct the problem now.
Did this issue come up during the home inspection? What is in your contract about the home inspection ?
I wouldn't place the onus of the lanai onto the lender. This is between you and the seller. If you buy this home " as is", the same problem will come up when you sell it. Try to get the seller to fix it now before you take on the responsibility, possible future trouble and cost. IMO, just not worth it.
In regards to the unpermitted deck in the post above. That depends on where in the country you live. In the state I live in, there is no " pretending it doesn't exist." If it is not permitted, off it comes or a cease and desist order with heavy fines starts
PS- remind the seller, that if you back out, the problem will still be there when the next buyer comes along. It's usually a good incentive to get him to do the repairs for you now.
SOON2BNSURPRISE -Thank you very much for the reply! We are requiring that the electrical repair be completed and will be satisfied as long as square footage from the room is not included in the appraised value/price. The room is finished nicely but down the line we may prefer to convert it back to a lenai as we do not need the heated square footage.
Don't know which county you are in, but there is some risk that you will end up with house with a stiff fine levied against it and possibly a correct or remove order. The risk may be slight, but it is still a risk.
I would require the seller to correct the deficiencies, including permitting and code compliance. If he balks, walk.
The problem is not going away. Since the seller created the problem, it would be best to have the seller correct the problem now.
Did this issue come up during the home inspection? What is in your contract about the home inspection ?
I wouldn't place the onus of the lanai onto the lender. This is between you and the seller. If you buy this home " as is", the same problem will come up when you sell it. Try to get the seller to fix it now before you take on the responsibility, possible future trouble and cost. IMO, just not worth it.
In regards to the unpermitted deck in the post above. That depends on where in the country you live. In the state I live in, there is no " pretending it doesn't exist." If it is not permitted, off it comes or a cease and desist order with heavy fines starts
PS- remind the seller, that if you back out, the problem will still be there when the next buyer comes along. It's usually a good incentive to get him to do the repairs for you now.
The issue came up during the inspection and appraisal and there are contingencies for both in the contract. The lender advised they may not approve the loan if the construction is not brought to code so there may not be a choice without a cash buyer. Thank you for the reply!
Man they are pretty lax in your area. I had a neighbor add a room in the garage and you could only tell he did it if he opened his garage, walled off half the garage basically. The city does a drive through once a month and it took them all of 3 months to demand he remove it, get it ripped apart for inspections, or pay fines. I only know this because he asked if I would have my maintenance guy rip it out I never saw it and he is right next door so not sure how the city finally caught it.
It is surprising the county never found out, the back yard is fenced but there are homes behind and on all sides on postage stamp lots!
This all happened right before the long weekend so we cannot contact the county for details on requesting inspections for a retroactive permit until Monday. The inspector advised one of the code issues is the foundation height so i assume the structure may need to be rebuilt to meet compliance. I am guessing the seller may stay put or wait for a cash buyer before tearing the room down.
Depends on how you want to proceed. If you really love this home buy it only on the condition that the non permitted room does not exist. This will only work if your lender is OK with it.
A friend lives in a home on a hillside. It has a view of the ocean. The home was built in the 30's. They have lived in the home for many years now. The ocean view side of the home was useless as it is too steep to do anything with. They wanted a deck built out there. In California to build a deck on their home they have to get city approval, they have to get approval from the coastal commission, and because it is on a hill they have to get approval from a hillside commission. It is a costly process. They had an engineering company put some plans together and they hired a contractor to build it. All of this was built to code without getting a permit from the coastal commission or the hillside commission. Other homes have similar decks on them that were built long before you had to do all this paperwork. They did not do anything unsafe or unusual for the area. The deck added value to the home. They built it knowing that if they ever sold that the deck would not be included in the sale price. It is as if the deck does not exist.
I am not suggesting that people build things that are not permitted and never build anything that is not safe. What I am saying is if you do realize that you can not ask money for that part of the build.
I would bet your friends will eventually get a friendly notice telling them to get permits or demolish the deck. Someplace on a coast in CA where you have to get multiple permits from several different entities means the government is going to spend some effort looking for and punishing violators. I'm surprised a contractor would move forward with that kind of build; there's a lot of risk for him if that un-permitted deck collapses and kills/injures someone or damages other property and/or the hillside. Lots of risk for your friends as well since their homeowners insurance probably won't cover any damages since they didn't get the required permits and inspections.
At the very least they will end up having to pay the piper when they go to sell. The odds are very high they will have to tear it down or go through the permitting process for the deck before they are able to sell since prospective buyers won't be able to get bank loans or homeowner's insurance with an un-permitted deck like that on the property. It doesn't matter if all the neighbors have the same thing; the neighbors have grandfathered status and your friends don't.
Last edited by patches403; 01-05-2016 at 10:26 PM..
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