Sell your house with unpermitted additions can complicate the process and result in a lower appraisal than if the work was permitted. Here’s what you need to know about selling a home with unpermitted improvements.
How unpermitted additions affect your home value
Permits may be required for structural, electrical, and plumbing work but also for minor projects. Accordingly, the term “unpermitted work,” is used to describe any addition or improvement made without the required permits.
Many individuals, including licensed and unlicensed contractors, do work for renovation or before selling a property without pulling permits to save time and money . They are hoping or believing that no one will find out.
Unfortunately, there are 2 main consequences:
- Home insurance: If unpermitted additions later cause a hazard in the home and someone is injured or there is damage to the property, the homeowner’s insurance policy won’t cover the damage if they investigate and find evidence of unpermitted work.
- Appraisal: Some lenders won’t issue a loan for a house with unpermitted work. Others may request from the appraiser to not include the additional square footage when determining the home’s value.
How can you sell a house with unpermitted additions?
Legalizing unpermitted work
The first way to sell you house with unpermitted additions is pulling a retroactive building permit. It allows the Building Department to confirm that the work complies with all current codes.
You will have to go to the City or county and apply for it. If you made the additions yourself, you’ll likely incur penalties and even additional taxes on top of the permit fee. If the additions were the work of the previous owner, the city might waive these additional costs.
Sell the house as-is
Florida sellers are legally obligated to disclose unpermitted work at the time of the sale, in a document named Seller’s Disclosure. Even if the unpermitted work was done before the Seller lived there, not disclosing it to buyers could mean possible legal trouble if they discover it after the fact. It protects the buyer from purchasing a home with undisclosed problems, but also the seller from potential lawsuits.
Consequently, you can choose to sell your home as-is and disclose the unpermitted additions. Then, you’ll need to set the asking price accordingly, with a real estate professional. You may have to set a lower price for your listing, since the buyer will have to assume the responsibility for the work that was done.