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What to Do if Seller Didn’t Obtain Permits for Work Done

Dear Monica: I am searching for a home and am seeing properties that have been nicely updated. However, in some cases, sellers did not get permits for the work. What is the risk to me if I buy a house with unpermitted work? Kevin K.
 
Dear Kevin: If a homeowner does significant work without obtaining permits, the risks to a buyer are several. First, you may not be able to get insurance enough to cover the cost of replacing the improvements done without permits. For example, if a garage is converted without permits, and the property has a fire, the insurer may only pay to rebuild the space as it was, and not as the family room it was converted to.
 
Also if a new owner wants to do work to the home, the building department may require that the unpermitted work be removed. This is not too common but it can happen. Not obtaining permits can affect the value of your property because buyers may discount the price to cover the risk they are taking. The best practice is to always get a permit for any work that requires one.

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