Illegal and unpermitted renovations appear to be increasing due to homeowners locating cheap labor online and saving money by using contractors who charge less money than professionals. Skipping out on getting a permit may save you money up front but could cost you down the line.
While many renos inside the home can be done without a permit such as flooring, painting, tiling and things of that nature, larger jobs such an addition on a home, finishing a basement, building a deck, extensive electrical work, etc usually require a permit and perhaps a professional inspection too.
Keep reading to learn more about what types of renovations require a permit and what can happen should a problem arise when unpermitted work is done.
What sorts of work requires a permit and inspection in a home?
Depending on where you live, the rules can differ but common renovations that normally require a building permit and possibly an inspection may include:
- Adding an addition onto your home
- Finishing a basement
- Bathroom modifications if it includes plumbing, electrical, construction or HVAC work
- Building or modifying a deck
- Extensive electrical work such as adding potlights, electrical outlets or breaker panel work
- Finishing the inside of a garage
- Building a pool or hot tub
- Adding a shed if it includes electrical or plumbing work
- Sewage or other pipe replacement
What problems can arise when a home has unpermitted work?
Unpermitted work that was effectively done illegally can cause a number of potential problems.
Fine – You may be fined if you’re discovered to not have a permit. If the work is still being done, the bylaw officer visiting you could issue a stop-work order to cease all building activity.
Insurance issues – If there is a problem with the unpermitted work such as a fire or accident that causes an injury or worse, your home insurer may not cover the damages.
Liability issues – In the case of an accident or death due to unpermitted work, you may be held liable for the damages. You may also be held liable even after you’ve sold the house if it is found that the unpermitted work wasn’t disclosed to the buyers of your home. If the new owners find that their insurer won’t cover the repairs, they may come after you in court.
House sale issue – You could have a problem down the line if while selling your home, the buyer asks for a copy of permits related to any work that was done and you are unable to provide them. You may be required to get the work inspected and permitted retroactively or if the work is substandard and can’t be permitted, you may have to tear the work down and replace it at your expense.
How much does a building permit cost?
The cost of a building permit can vary depending on where you live and the work being done. The average cost of a building permit in the United States is over $1,300
but can go higher if you’re building an entire house or garage conversion for example.
Getting a permit for work on your property normally involves contacting your local bylaw office or authority and filling out forms to describe the work being done. The application could be approved as is, it could be rejected, it might require changes or go through a more extensive review before a decision is made.
When approved, you receive a permit to visibly put in your window to let people and bylaw officers specifically know that authorized work is being done.
How is unpermitted work discovered?
Many times a homeowner getting unpermitted work done gets reported by a neighbor or someone walking past the house who notices work being done, building materials being brought in or other clues, with no permit visible.
Our neighbor used to build decks as a teenager and given that he had this experience, decided to replace his deck on his own. He was halfway through the job when a bylaw officer arrived at his house to say that someone had alerted them to work being done without a permit. He had to stop the work and apply for a permit.
He was able to get a permit and complete the work but given that their home backed onto a green space where people frequently walked, the work was visible and someone obviously saw it.
Can you sell a house with unpermitted work?
Many homes do get sold with work that never received a permit or that was inspected. If the buyer of a home doesn’t request copies of permits or doesn’t check to see if permits exist, a home sale can go through without anyone noticing.
In busy and hot real estate markets, buyers often leave out conditions such as doing a home inspection and even financing approval if they think they may lose the house. Some real estate agents may decline to sell a home if they are worried that it may have unpermitted work that could cause a problem down the line.
Even fewer may think of asking about the availability of building permits.
Can I sue previous owner for unpermitted work?
If there is a problem in a home with unpermitted work, the current homeowner will typically be required to fix it.
But it may be a case where the former homeowner who ordered the unpermitted work could be held responsible and there may be the possibility that a home inspector or real estate agent involved in the sale may also be held accountable.
Depending on where you live, you might legally be required to disclose work that was done in your home that you know was done without a permit if you decide to sell your home. Then the buyer can decide how they’d like to proceed having been warned in advance.
Does insurance cover unpermitted work?
It may depend on who your insurer is, who was responsible for the unpermitted work and the amount of damage. Some insurers may refuse to cover the cost of damage caused by unpermitted work and the homeowner may need to go after the insurer or the person responsible for the work in the first place, whether the previous homeowner or the contractor.
If you paid for unpermitted work and need to make an insurance claim, your insurer may not only reject the claim but also cancel your policy as they may not want to be associated with you moving forward.
I met a woman who bought a resale home with her husband that had a pool. They had a fire in the area that housed the pump and other equipment that destroyed all of it along with the shed that housed everything. The fire was determined to have been caused by incorrect wiring that was believed to have been done by the previous homeowner.
In this case, the insurer covered the repairs since the work had not been done by the current homeowners and they were unaware that it had been done wrong. Other homeowners may not be so lucky.
Summary
Before having work done on your property, double check to see if it requires a permit. Some contractors will take care of buying a permit for you and simply pass the cost onto you. In other cases, you might have to apply for it yourself.
Be wary of using a contractor that either won’t apply for a permit for you or doesn’t seem to care if you get one yourself.
If you’re buying a resale house, having a home inspection may help to uncover shoddy work that may have been done without a permit or that was done incorrectly. This knowledge could save you money down the line if the home has significant unpermitted work and you choose not to buy the house and the potential trouble that could come along with it.
It’s a good idea to check with the sellers of the home to ensure that permits were given for any major work in the home that required it, just to cover your bases now and in the future.