Unpermitted Renovation Work Adds Stress to Buyers and Sellers

Unpermitted Renovation Work Adds Stress to Buyers and Sellers

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Choosing the right home for you is hard work.

Unpermitted renovations can turn the excitement of selling your home from a dream into a nightmare. As a seller, you want to get top dollar from the investment you put into your home. That's why you hire the most expert realtor and make the interior and exterior as neat and tidy as possible. You might find yourself lying awake at night dreaming of how you will use the funds from the home to move to another home or fund your retirement years. Or, you might lay awake worrying about having had some renovation work done that you didn't get permitted. 

Home Buyers and Sellers Stress

The Harris Poll, an online survey provider, in a poll for Nerd Wallet in January 2017 took a look at homebuyer stressors.

Chart of homebuyer stress shows 46% Millennials, 51% Generation X, and 35% Baby Boomer

Forty-six percent of millennials, those people between the ages of 18 and 34 found the homebuying process stressful. In the Gen-X population, of buyers aged 35 to 50 years old, 51% said it was stressful. The lowest reported stress was in the Baby Boomers age group of buyers, aged 51 to 69 years old. Of these respondents, 35% said the process was stressful.

Reasons for Homebuyer and Seller Stress

Both buyers and sellers experience stress when negotiating the sale of a property. Sellers worry about getting the price they want, or need, for their property. When selling, daily disruptions from frequent viewings and keeping the home clean adds to your stress. Thoughts of uprooting the family and packing belongings can cause sellers to reach for the aspirin bottle. 

For most people, a home is the most expensive purchase they will ever make. The stress of the financial responsibility—which can go on for more than 30 years—can keep many buyers up all night. Buyers say stress comes from the high price of real estate and the need for them to make large down payments. Other stressors include difficult financing options and hard to understand financing documentation. Today, many buyers also worry about their lack of confidence in future housing markets. No one wants to invest in a home only to be upside down before the property is paid off. Being upside-down means owing more than the house is worth.

Buyers are also fearful of purchasing a property and finding problems after the fact.

No one wants buyer's remorse when buying a house.

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Homeowners Make Improvements

As a homeowner, do everything in your power to protect the value of your most expensive asset. Some home value issues, like the December 2008 downturn of the housing market, are beyond a homeowner’s control but other issues are fully in their control. One reason owners improve their property is to keep home systems running well and to keep their home up-to-date.

Buyers Are Willing To Pay More for a Home That Is Updated

Buyers pay more for homes that have kitchen renovations or updates. Other top renovations include adding or updating a bathroom, installing new or refinishing old wood floors, creating true master bedroom suites, and installing new HVAC systems. When an owner improves a property, it helps maintain the home's value. Renovations can even increase the value of the home.

However, if done incorrectly, renovations can have the opposite effect on a home’s value.

Home Renovation and Construction Permits

Most home renovation and construction work require a permit from the local building authority. Work that is done or supervised by the property owner also needs a permit. Florida Statute 489 regulates contracting and permitting, however, the process to obtain a permit is handled on a city or county level by the local Building Department.

Florida law requires all home construction and renovation work to be done by licensed contractors.

To receive a permit the owner or contractor must complete an application with the local permitting department. Building authorities will check that the contractor is licensed in their county or state to do the type of work that you are undertaking. To be a licensed contractor, states will require that the contractor displays an understanding of the current building codes. They must also be knowledgeable about the installation and use guidelines in the field they are working in. 

Many times, unqualified or unlicensed contractors will ask that the homeowner to pull the permit because they are unable to do it themselves.

Homeowners Can Get Permits Too

Homeowners can request and get a permit instead of the contractor. Owners do not need state licenses for doing renovations on their homes. You may be tempted to pull the permit yourself because the contractor had the lower bid. However, doing this comes with a BIG CAUTION SIGN. As an owner, you must understand the ramification of putting your name on the permit.

Once you commit yourself, you will be required to act as the supervisor and oversee all work. If the work is substandard or creates a hazard, you will be responsible. Also, when an owner is the permit holder, they become an employer of any workers on their job. As an employer, you are required to pay social security, worker's compensation, and other taxes for all workers.

Further, if a worker should get hurt while working on your home, you could be held financially responsible for medical costs.

Building Departments follow Florida Stature 489 when issuing permits.

Permitted vs. Unpermitted Home Renovation and Construction

All work that requires a permit should have a permit. Types of permitted renovations include:

  • Adding, moving, or demolishing electrical, plumbing, or gas systems
  • Renovations or replacement of air conditioning and heating systems
  • Replacement of windows
  • Repair and replacement of roofing
  • Renovations that require the moving, adding, or removal of walls
  • Driveway repair, renovation, or addition

Not every renovation will require permits, however. Projects like replacing carpet, painting, and replacing appliances won't require one. It is best if you call or visit the permitting authority in your town to make sure you are doing the right thing. 

What Might Happen If You Don't Pull a Permit

Home inspectors, banks, and title companies look at official deed records when a home is sold. Deed records list the number, size, and types of rooms in a home. Unpermitted rooms or square footage will not be reflected on deed records, sending up a red flag to these groups.

These red-flags can stop the sale of a home.

Many buyers will often shy away from a property that has unpermitted square footage or improvements. Or you may be forced to offer the property as an "As Is" sale, which usually means you'll receive a lower price. As an owner, you are responsible for disclosing such unpermitted work. Even if a buyer is willing to accept the unpermitted work, frequently, lenders will refuse to finance the home.

How To Get a Permit After the Fact

If you have already made the mistake of completing unpermitted work, don't despair. All is not lost. Some building departments have policies to approve unpermitted work retroactively. Inspectors might ask that walls and floors be reopened to ensure that the work met the building code. In most cases, they will require the work meets all CURRENT codes, which could be different from the code in place at the time of the renovation. That means you are on the hook for possible additional costs to upgrade the structure.

Some building authorities may also assess penalties against your home if you retroactively apply for a permit. Each permitting department sets its method to approve unpermitted work after-the-fact. 

Why Give Yourself a Headache with Unpermitted Renovation Work?

You may be tempted to skip the permitting process when you are renovating or upgrading your home. You might see the process as expensive and bothersome, or if you are working with an unlicensed contractor, they may mislead you. Deciding to forgo the permitting could well cost you a lot of money later when you try to sell your home. It could even stop a pending sale dead in its tracks. The cost and bother of securing a permit and using licensed contractors will more than pay for itself in the long run.

Don’t add needless stress to the home selling process. You’ll thank yourself later and be able to sleep at night knowing you did the right thing.

Home Ownership - Is it in your future?

About me a Freelance WriterMichele Perry is a freelance writer, editor, and media consultant. She specializes in web content and business documents for small and start-up business. She has written for realtors, home repair and maintenance websites as well as for the healthcare, food safety, adult career training and the hospitality industries. Michele makes her home on the Florida Gulf Coast where they enjoy the long warm summers.

TO CITE THIS ARTICLE, PLEASE USE THE FOLLOWING:

Michele Perry. “Unpermitted Work Adds Stress for Buyers and Sellers” 25 January 2018.
https://www.mickenpa.net/unpermitted-work-adds-stress-home-buyers-sellers/

INFORMATION SOURCES

  • “Discovering Unpermitted Construction When Selling Your Home” nd
    <https://www.nolo.com/legal-encyclopedia/discovering-unpermitted-construction-when-selling-your-home.html> 25 January 2018.
  • Deborah Kearns. “Home Buyer Reality Report 2017” 23 February 2017.
    <https://www.nerdwallet.com/blog/mortgages/2017-home-buyer-reality-report/> 25 January 2018
  • “The 2017 Florida Statutes, Chapter 489” nd
    <http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0400-0499/0489/0489.html> 25 January 2018.
  • Trulia Forums. “What do you do about selling a home with previously unpermitted additions and more unpermitted work after we bought it?” 3 October 2012
    <https://www.trulia.com/voices/Home_Selling/What_do_you_do_about_selling_a_home_with_previousl-440236> 25 January 2018.

IMAGE SOURCES (by appearance)

  • “Homebuying Stress by age group” By Michele Perry, Own Work, January 2018
  • “Homebuyers” By USAF Senior Airman Grace Lee, CC0 Public Domain, nd <http://www.luke.af.mil/News/Art/igphoto/2000914781/> 25 January 2018
  • “Money” By Junior Libby, CC0 Public Domain <http://www.publicdomainpictures.net/view-image.php?image=214577&picture=money> 25 January 2018
  • “Building Permit” By Aavaaz home builder (Own work) CC BY-SA 4.0 via Wikimedia Commons 30 December 2007 <https://commons.wikimedia.org/wiki/File:Building_permit.jpg> 25 January 2018
  • “Building Inspector” By Clker-Free-Vector-Inages/29609, CC0 Public Domain <https://pixabay.com/en/architect-foreman-safety-helmet-304782/> 25 January 2018
  • “Row of houses” By Prawny/2701, CC0, nd <https://pixabay.com/en/houses-homes-property-estate-real-1719055/> 25 January 2018