Should I buy a red-tagged home?
Q: I've made an offer on an unpermitted home that was red-tagged 10 years ago by the county building department. The property is in the mountains, surrounded by other unpermitted homes, and the real estate agent says the building department is not likely to require demolition, as long as property taxes continue to be paid. But this seems risky. The price for this property is tempting, but I don't want to get stuck with a vacant lot. When a home has been red-tagged, can the building department eventually order its removal?
A: In most cases, municipal building departments don't require demolition of unpermitted buildings. This, however, does not mean they cannot or never will do so. Building departments are empowered to enforce the letter of the law. If future policy changes should incline them toward rigid enforcement, they could order the removal of substandard structures that have been red-tagged. Conditions that could prompt such a decision might be major construction defects in the building, zoning violations, noncompliance with water and septic requirements, or the capricious imposition of authority by an overzealous bureaucrat.
Demolition, however, would be a worst-case scenario. A more likely enforcement position would be to prohibit occupancy of the dwelling until it is permitted and made to comply with code requirements.
A prudent approach, before you sign a purchase contract, would be to visit the county building department to discuss the situation and possible options for approval of occupancy. What you need is clarification of their policy toward properties of this kind. Ask the building official about an as-built permit. Find out how much the permit process might cost and what the chances are of obtaining approval for the building. You'll also need a list of defective conditions likely to be cited by the building department. So be sure to hire an experienced home inspector for an evaluation of the building.
Buying a red-tagged home has its risks, but the greatest of these is to proceed without full knowledge of the situation.
Q: You often stress the importance of defect disclosure by sellers. Here in the Commonwealth of Virginia, sellers do not have to disclose. They can simply disclaim or disclose defects in their homes, as they choose. Most sellers sign disclaimers stating that they are selling their house “as is” without having to divulge anything they know to be defective. It's “buyer beware” in this state, and only the most foolish buyers forego home inspections!
A: Aside from legal requirements for defect disclosure in your state, it is a matter of ethical decency to inform buyers of defects before selling a costly commodity of any kind. This is particularly true when selling a home because of the financial hardship that can result from undisclosed defects. Those who support limited disclosure could use some basic instruction in the differences between right and wrong. Until then, the absence of seller disclosure increases the need for qualified home inspectors in Virginia.
• Distributed by Action Coast Publishing. Questions to Barry Stone can be emailed to barry@housedetective.com.