How to Sell a House with Unpermitted Work ?

When putting a house or any form of property for sale, there are loads of headaches and struggles. Listing the property, getting a very good agent, getting an ideal price for the property are some of the issues sellers face when trying to convert their properties into money. However, these issues increase when the property to be sold has some unpermitted work involved. Most sellers worry about how to sell a house with unpermitted work. With unpermitted works on your property, you risk being sued, paying extra costs later, or getting a very low offer.

In this article, adequate attention will be paid to discussing how to sell a house with unpermitted work. I will discuss what unpermitted works are, why you may have them on your property, and its effect on your property’s sale.

What is Unpermitted Work?

Unpermitted works are constructions, which are modifications or additions to an existing property, carried out without the appropriate permission from local building authorities. These constructions are regarded as illegal as per building laws because permits were not issued for them. The authorities cannot certify that necessary building procedures and regulations were followed during their construction. These unpermitted works may include adding an extra bedroom, a basement, a gym, or changing the building’s plumbing and electrical configurations.

With the definitions of unpermitted works given above, you may wonder why property owners would have unpermitted works on their property. Many reasons could be responsible for this, and they will be explained in the next section.

Reasons Homeowners Have Unpermitted Works

Cost of Permits

Generally, obtaining building permits for modifications and additions on a property is expensive. Depending on states and local municipals, these permits vary in costs, but these variations don’t negate the fact that homeowners have to pay a lot to get these permits. These expenses are what some property owners seek to evade by not obtaining permits for the modifications. These property owners use cheaper contractors to carry out these modifications and additions without pulling the permits for the works. These contractors are considered ‘cheaper’ because they do not obtain the permits, as the cost of permits is a tangible part of the total construction cost.

Another possibility is that the homeowner paid for the permits, but due to the contractor’s greed and shadiness, they fail to obtain the permits. This scenario is not uncommon as there have been such cases in times past.

Also, property owners may want to evade an increase in tax, as an increase in the number of rooms or facilities in a building translates to an increase in the amount of tax paid to the authorities.

Variations in and to Local Building Laws

As stated earlier, the cost of building permits varies from states and local municipals, and so are the laws. These laws vary, which causes a variation in the permits for different works. As a result, works requiring permits in a state or city may not require permits in another. This is likely to confuse homeowners who are moving in from a different area with different building laws.

It is also possible that changes made to building laws cause homeowners to effect modifications on their property without permission. Building laws may be changed after a periodic review; as such, homeowners will have to pull permits for some modification works which do not require permission before.

Some dubious contractors hide under this reason to skip the permit pulling process by telling property owners that the works require no permission according to the new rules. While the contractor may be liable for this in the long-run, the homeowner will have to bear the immediate cost when the backlash comes.

Deliberate Action by Some Property Owners

Some homeowners intentionally skip pulling permits just because they don’t want to spend the extra cash. These property owners feel that the authorities won’t know if they carry out works without permission; hence they deliberately refuse to obtain permits to modify their properties.

The foregoing is the reason why some properties have unpermitted works. Whichever reason is responsible for yours, below are the effects of having an unpermitted work on your property when selling.

Low Bargain

The buyer of the property may offer a low bargain if he/she knows that there are unpermitted works on the property. This makes sense as the new owner will have to incur more expenses in obtaining permits for the work.

Possible Lawsuit

If you sell your property to a buyer without informing them of the unpermitted work, you risk facing a lawsuit when they later find out. This will result in thousands of dollars spent on attorney fees and court cases and subsequent payment of damages to the buyer.

Loss of Insurance and Mortgage

If your insurer should find out that any form of modification was made to the property under insurance, you may lose your insurance on the property without obtaining the necessary permission. This same principle holds for mortgage payment as the mortgage provider may request the loan’s full payment if they discover that you have carried out unpermitted works on the property under mortgage.

How to Sell a House with Unpermitted Work

As a homeowner with unpermitted works, there are some options you can choose from when selling your house. These options include:

As-Is Sale

You can sell the house with the unpermitted works, but you must tell the buyer about them. Normally, the buyer will offer a very low price, seeing how he/she will have to pay for the reconstruction and permits after the purchase. To play safe, you can get a quotation from different contractors to know much the reconstruction and permit pulling will cost. This way, you will be able to know how much you are forgoing on your property.

Obtain a Permit before Sale

In most cases, buyers won’t purchase a house with unpermitted works. This is because of the stress and cost of reconstruction and obtaining permission. Therefore, another option is that you obtain the permit for the already made modification. You can approach the local building authorities for a new permit. They will appoint an inspector to check out the works and see if there need to be any corrections made. After all of these have been done, a permit will be granted, and you can sell your house at the current market price.

If you wish to sell a house with unpermitted works within Tennessee, you can contact Aniya Equity. We buy houses at competitive prices, and you will get an amazing offer for your property.