Buying a house - basement has a bathroom - no permit (2013, insurance)

[handsome.hippopotamus]

Hi,

I am in process of buying a house. During inspection I came know that there is a small half bath in basement, which is without permit. I came to know as there is no outlet etc.

Should I proceed further? What other options I have ,?

[nybbler]

You don't need a permit to have a bathroom, you need a permit to build one. If this is an older house it's quite possible there was just a toilet in the basement (with no separation from the rest of the basement!) that later someone built walls around. For whatever reason a toilet in the laundry area is very common in some parts of NJ in houses built in the 1920s.

As for what to do... either buy the house or don't buy the house. You can demand the seller bring the bathroom up to code, but they'll say no. You can ask for a cash concession, which might get you something.

[NJHomebody]

Be aware the appraiser might not view it as a half bath if it isn't to code which means if they list it as a 1.5 bath, it's a 1 bath.

[TonyStarksNJ]

Originally Posted by NJHomebody

Be aware the appraiser might not view it as a half bath if it isn't to code which means if they list it as a 1.5 bath, it's a 1 bath.

this would be my only concern. If the house is listed at 2.5, but tax records only show it as a 2. If you get the permit for the .5, prepare to see your property tax bill get hiked. The flip side of that, is that if there is no permit and its not legal, the 2.5 bath house you thought you were buying, should not be renegotiated down to a 2 bath home.

I wouldnt walk away from this. Use it as a negotiation tactic. Then you can fix it properly, and enjoy the appreciation when you make it a legit 2.5 bath home.

[AdotAllen]

Originally Posted by NJHomebody

Be aware the appraiser might not view it as a half bath if it isn't to code which means if they list it as a 1.5 bath, it's a 1 bath.

You're correct, since the bathroom is in the basement, this is considered below living space.

"Anything that is below grade isn't something an appraiser will count as part of the living area. They may, however, make an "adjustment" of value accounting for the finished space"

9 Important Things To Know About Appraisals And Comps - Curbed University - Curbed DC

[Bergenite]

Originally Posted by NJHomebody

Be aware the appraiser might not view it as a half bath if it isn't to code which means if they list it as a 1.5 bath, it's a 1 bath.

The appraiser doesn't determine if something is up to code or not.

[HollaGeo]

Buy the house and don't worry about a stupid bathroom.

[NJHomebody]

Bergenite, I said the appraiser might not view it as a half bath if it isn't to code/w permits, not that the appraiser would determine if it was up to code or not. If it's blatantly not a half bathroom and you are paying for a 1.5 bath that is really a 1 bath, the appraisal calling it a 1 bath is going to impact what the bank will lend and what the home is worth.

[Marc Paolella]

Originally Posted by HollaGeo

Buy the house and don't worry about a stupid bathroom.

This advice is probably correct. The appraiser will not give much, if any, credit for an isolated 1/2 bath in an otherwise unfinished basement. Many appraisers will ignore it, however it is more likely to attract attention in an appraisal for an FHA loan then for one in a conventional loan.

As for value, an isolated 1/2 bath in an unfinished basement has no effect on value, and no effect on property taxes.

Basement baths are not counted in the room count. If a house has 6 rooms, 3 bedrooms, and a bath on the main level and a bath in the basement, the room count is 6-3-1, not 6-3-2.

The appraiser can give some credit to the basement bath, but it will be sharply reduced. It will have more value as part of a legitimate finished basement. But if the basement is unfinished except for a bath, there is little value accorded to the bath.

[ejleonard]

I wouldn't worry about it unless you're unlucky enough the house floods due to the un-permitted plumbing, your insurance company has a right to deny coverage.