'As-built' permits may be a solution when purchasing home with code violations

Homebuyers can face extra costs and fees when purchasing a home that features additions built without a city-issued permit.

Q. We made an offer to buy a house a few weeks ago, and followed your advice to make the purchase contingent on getting a satisfactory report from a professional home inspector. The inspector's report says the house is in good shape, but noted that the sellers added a new bedroom to the home last year without getting a city-issued building permit. If we close the deal, would we be responsible for getting the permit and paying for any needed changes if the city finds out about the illegal addition, or would the sellers have to pay for the work?

A. You would likely be on the hook to pay for the permit, any structural changes that might be needed before the certificate can be issued, and possibly any fines the city might levy for the seller's failure to follow the local building-code laws. Your inspector's report formally notified you about the unpermitted work, so you couldn't claim that you didn't know about the problem if you later try to sue the current homeowners for reimbursement if the city finds out about the illegal addition.

Ask your inspector to recommend two or three good local contractors in the area if you don't know a few yourself. Then ask those contractors for detailed written bids to see how much it would cost to bring the new bedroom up to code.

Next, contact the city's building department to see if you can obtain an "as-built" permit for the addition. An as-built permit essentially is a permit that is retroactively issued after a construction project is completed. Also ask if any fines or penalties would be involved because of the work the seller did a year ago was performed without the city's preapproval or final building inspection.

After you add up all these figures, go back to the sellers and ask them to pay for the work. If they don't have the cash now, perhaps they'll agree to give you an identical credit from their resale profit if the deal goes to closing, so you will have the money to pay for the job yourself.

If the sellers won't honor your request, you can use the home-inspection contingency that you wisely included in your original purchase offer to cancel the sale and get your good-faith deposit back.

Real estate trivia: Building department officials in several cities now routinely cruise down residential streets looking for homes with large piles of lumber in the yard or driveway, industrial-sized dumpsters or other telltale signs that unpermitted work may be underway. Violators can face stiff fines, a long work stoppage and sometimes even jail time.

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