The Importance of Checking Permit Statuses Before Buying A Home

Obtain the Proper Permits for House Upgrades & ModificationsWhen you buy a home, one of the most important things you should do is to check on statuses of permits for anything that looks to be an addition or a major modification to the home. For example, room additions, garage additions, bathroom additions, major remodels, adding a guest house or building a second story above the garage all must be permitted by the city.

If the job is done really well, you may not be able to tell just by looking at it that it’s an addition so you need to check the county records and with the building department to see what can legally be there.

Room additions and bathroom additions are easier to check on because its on the tax assessors website; the tax assessor’s site will tell you how many bedrooms and bathrooms the home legally has. So if you go there, count the bedrooms and bathrooms and it’s a different number, you know there’s something wrong. County records will also inform you if there is a guest house, or additional unit(s) on a property.

Overhangs, garages, pools, fences, etc are more difficult to spot and check on. For items like these you actually have to go to the building department and pull permit records. The building department will also have the original plans of the home so you can see if anything has been changed.

When buying a home you cannot depend on your Realtor to do this for you, even though they should. Ultimately, it’s your responsibility and it will be you who has to deal with the consequences. A better listing agent will have done this research because they know what the ramifications could be. If there is an unresolved permit issue, the local municipality who governs that area could force you to correct it at your expense.

Recently, I listed a 2 unit home for sale in Long Beach, California where the previous owners illegally converted both garages to be a third rental unit. None of this work was permitted and it will not be allowed to remain. Therefore the seller (who happens to be a bank) or the new owner must convert it back to garage space. In this situation, I know the city is aware of it because they sent us a violation letter. You can try and negotiate a certain amount of time to correct the issues but some cities are more strict than others. I disclosed everything in the contract and let each offeror know that they’d be required to correct that issue. The city was okay with this and the home is scheduled to close next week, prior to the garage issues being resolved.

Illegal Garage Conversion in Long Beach CA

Illegal Garage Conversion in Long Beach CA

Early this year I sold a home in Sante Fe Springs where the original owner had extended the front patio out into the front yard past the set back. The city notified me, as the listing agent, that it needed to be corrected. I was able to negotiate with them to allow the buyer to do it, rather than my client, the bank (seller). I disclosed everything in the contract and let each offeror know that they’d be required to correct that issue. The city was okay with this and the home sold with no problems.

It’s especially important to check on permits when buying an REO property because an REO seller will not be required to disclose these things because they don’t know about it. An REO means it is owned by a lender, and 99 times out of 100, they’ve never seen or stepped foot inside the property so they would have no way to know if it has a permit issue or not. They are also not required to research this.

If you are a seller and you made non-permitted additions or modifications to your home, you MUST disclose this or you could be subject to litigation in the future from the owner you sold it to. You might think you will have more to gain by NOT disclosing it, but the the money you could lose in a lawsuit could be more than you could gain by not disclosing it.

If you’re in the market to buy or sell homes in California, contact us today at 1-800-287-1808. We work hard to research permit issues that other, less experienced real estate brokers might miss. Our team has been involved in more than $450 million of single family real estate sales in California since 2008.

If you enjoyed this article, be sure to download our California Real Estate E-book [pdf].

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