Without permits, a homeowner is not taxed for the additional space (since the County Assessor is not notified), but it is also not noted in the square footage at time of sale. For this reason, a seller ought be sure that figure is accurate. How can a buyer pay for a 2300 sq ft house if the assessor shows he has only 1800 sq ft. Buyers pay less for unpermitted additions. You just don’t know if it was done to code. The value of an unpermitted addition is less, in my opinion, as a buyer.
We used permits for all additions we ever did, and made sure our square footage was accurate, for resale reasons.
It is against building codes to make additions or other construction without building permits, and I would NEVER buy a house that was in violation of building codes. The reason our houses don’t crumble in earthquakes and kill thousands of people is the building codes. I am a fervent believer in building codes.
Some people are too cheap to build a house properly, so they don’t pay for the permits or the additional requirements of a building code. I won’t buy that guy’s house, but go on to a house properly built.
Just my opinion. As far as legal aspects, I am sure these people can get fined for violating code. You just have to turn them in to the building department.
Anyway, why mess with a house built without proper permits?