Question about ‘unpermitted’ square footage

[speedingpullet]

i’ve been keeping track of a few houses on ZipRealty, and have noticed a large percentage of them have ‘unpermitted’ square footage tacked on to them – ie a garage that’s been turned into a granny flat, an extra bedroom, etc…
Often there’s a big discrepancy between what Zillow shows as the sq footage, and what is displayed in Zip.
I tend to go more with the Zillow figures, because IIRC they are tied to the assessment and tax details…

What’s the deal – as a buyer – with this?

Is it unreasonable to ask the seller to provide permits for the conversions before buying?

Would I, as the buyer, be liable to increased property taxes on the place with these unpermitted conversions?

Just tying to get my head around it, so that when the time comes to buy I know my onions.

Any help or advice gratefully recieved.

[powayseller]

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?

[speedingpullet]

Thanks Powayseller!

As I suspected – unpermitted additions would normally be more trouble than they’re worth.

Yes, maybe its an L.A thing, but quite a lot of the SFRs I’m looking at have non-permit additions.
Trying to squeeze the very last drop of ‘equity’ by adding another bedroom in the garage, etc. 😉

So – if I was to consider a place with one of these unpermitted additions, I’d be within my rights to make the sale contingent upon the seller getting the correct permits? No permits, no sale?

Good info to know – I wonder how people got away with it during the bubble…

hehehe, just answered my own question!

[Bugs]

Unpermitted additions can cause a property owner lots of problems:

1. The city can come through and demand the addition be demolished and the structure be returned to its permitted size – that’s at the property owner’s expense.

2. As an alternative, and solely at the city’s discretion, they can choose to issue permits in exchange for the appropriate fees and inspections and a pentaly surcharge. In order for that to happen the structure would have had to been built to code and it would have to withstand whatever inspection process, including drilling holes to check for slab depth, framing spacing, electrical conduit, etc. Some cities will not do this, others will.

3. Most lenders will not lend on building area that is known to be unpermitted, because…

4. Insurance companies will generally not insure unpermitted building area, and in some cases will not insure structures with unpermitted building area. Substandard construction can lead to damage to the permitted structure to which they are attached.

Bottom line is than in this region it’s not smart to mess around with properties that have unpermitted additions. If a buyer suspects the permits may be lacking they absolutely should make the sale contingent on the seller providing them.

In some cases, the structures may have been built prior to the dates the city or county has permits on file. Those structures can generally be considered permissible. For instance, the City of San Diego generally does not keep their permits files prior to 1955 handy and they wouldn’t get excited about structures and additions built prior to that time.

[speedingpullet]

Verrry Ineresting…thank you both so much for that info.

I guess my question, now, is more general – how on earth did these places get sold previously with no/inadquate permits?
Was this another symptom of ‘irrational exuberance’ in the housing market?
Was everyone so desperate to buy that they just ‘ignored’ the extra sq footage , in order to ‘buy now before you’re priced out’, or ‘get in quick, before you’re outbidded’?

I can understand a seller not wanting to declare it, as they’d incur Property Tax, but how on earth did they sell it on?
Would a buyer not just move on to the next house on thier list once the additions were shown not to be ‘proper, “Seller’s Market” or not’?

Scary – especially in earthquake-prone CA.

Wow, so much to think about when buying….0_o

[Bugs]

Most unpermitted living area improvements are made by either enclosing a patio or converting a garage. With garage conversions, “curing” the unpermitted area tends to be pretty simple – they go in and remove any partitions, take up the carpeting and make the garage door functional again. Patio improvements tend to get ignored (in terms of value) by appraisers and realty agents.

Full-on frame/siding additions with foundation are not nearly as common. Ironically, it’s often contractors who put those in their own homes – they know how to go through the permitting process but they just skip it. These additions are generally built to code and can be permitted after inspection and testing by the city’s inspectors, if that city is one that will allow permitting after the fact.

It’s the handy do-it-yourselfer you have to watch out for. These guys watch Bob Vila on TV and think they can figure it all out from one of the home improvement books that Home Depot sells. They have good intentions but they do tend to make mistakes. They tend to look like crap, too.

[VCJIM]

Hey, I built my own storage shed using one of those books! It was really fun!

[barnaby33]

If you don’t want unpermitted additions, Clairemont is out for sure. They even have a term for it, Clairemont magic. I would say a large percentage of those houses have unpermitted add-ons, which though technically illegal didn’t seem to have problems selling the last few years.

Josh

[PerryChase]

There’s always a lot of work done without permit. Technically, you’re supposed to get a permit to add a light switch or to relocate a door.

There’s nothing wrong with “unpermited” work so long as the work was performed to safety code.

Setback limitations is one reason people don’t get permits. For example a patio cover may not be allowed under setback limitations so people would just build one without informing the city. Since nobody complains it’s never a problem.

BTW, Del Mar is well known for unpermitted work. Del Mar has strict livable square-feet per acre limitations so owners might get a permit for space with 2-story-high ceilings then come back later to add 2nd floor space inside. It’s done all the time.

“Unpermited” space is fine if it’s built with safety in mind.

[sdduuuude]

Many seem to think they are horrible things, but really, people buy and sell homes with unpermitted additions all the time.

Unpermitted additions are worth what they are worth. Sometimes they are great little additions or extra sheds or garage conversions. Sometimes they are nightmare projects with lots of liability associated with them.

If you are a buyer and refuse to buy anything that has unpermitted space, you may miss out on something useful. If you do buy such a place, make sure you know how to evaluate the quality of the space. Is there anything dangerous in the garage conversion? Bad ventilation? No insulation? Unvented dryers in a living space? etc. Make sure your inspector goes through it thoroughly. Decide if it really adds or detracts from the value.

If you are a seller, just make sure you disclose what space is unpermitted. If you have a nightmare unpermitted space, think about “undoing” it. If you have a nice, safe, usable space, leave it alone. It will add value.

[SD Realtor]

Well said sdduuuude –

If you are a buyer and are concerned about unpermitted additions make sure you ask. When you get your appraisal done, if the appraisal square footage differs from the square footage on the assessors records then definitely investigate to find out why.

I had a 3/1.5 home and I converted the half bath to a full bath. I ended up removing the closet of a bedroom to put the bathtub/shower in. I hired a licensed contracter and plumber and had all of the work done professionally but no I did not get a permit for the work which technically I should have.

So yeah I agree with points made that it is a matter of buyer beware. To me at least, the scope of the job and the quality of the work does have bearing. Again as a buyer you can do a pretty thorough job of investigation. If you are uncomfortable, walk. However don’t not look at a property simply because it may have had some unpermitted work.

And yes as a seller, disclose disclose disclose!!!

[speedingpullet]

Cool – thanks for the advice!

While a little conflicted now, I do understand not to ‘throw the baby out with the bathwater’, as they say in the UK 😉

My main worries were safety, and how much property taxes would be raised once the correct sq footage was known.

Still as you all point out – few people would buy a place without a thorough inspection – if the addition is unsound (or too ugly to live) then you can always make the sale contingent on it being ‘fixed’.
But – its pretty amazing the amount of SFRs here in L.A that have something tacked on to them.

[powayseller]

Too many people, in remodeling their homes, make it look like it was remodeled. A good remodel is not obvious; it fits into the floorplan. In the example of changing a 1.5 bath to a 2 bath, a bedroom lost its closet; thus technically it is no longer considered a bedroom. Now you went from a 3/1.5 to a 2/2. This lowers the resale value, as fewer people would want to buy a 2 bedroom home.

Personally, I would not buy any home that was built without permits or has permitted remodels with weird layouts (like having to go through the bedroom to get to the kitchen). My favorite tacky remodel is converting a patio or garage into a room. What are people thinking? If it looks like a remodel, people shouldnt’ do it. Doesn’t anyone consider sensible architecture and floor plans?

Some people have not taste. Why would I want to buy their tacky remodel, or their unpermitted house? And why should we? With inventory high and growing, there will be plenty to choose from. So no need to settle.

[socalarm]

my neighbor is also selling a house at the same time aas us. when she bought her house, the previous owner had left behind a covered patio extension to the rear. they did reface the cladding and interior and i think it fit pretty seamlessly.
she met me today and said she she has an offer. she isn’t leaning toward disclosing it but feels uneasy. living next to her, i can’t even tell the difference so i told her it should be fine.
but i realized can this affect her home inspection?

[Author]

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