Buying and Selling Tips March 8, 2023

Wish to purchase a beautiful house, but the seller’s renovations were not permitted by the City?

Most first-time home buyers or buyers looking for a new residence would like to buy a house that is move-in ready. However, most single-family homes in the Bay Area were built in the 50-60’s, so there is a demand for them to be recently renovated. When shopping for a house, many sellers have not applied for permits during renovations.

Since the permit application process is relatively complex. For instance, when submitting an application, homeowners must provide detailed design plans for the renovation of parts of the house, such as kitchen cabinetry, including measurements and new pipe locations. Additionally, it can take two to three months to receive approval from the government, and the cost is at least 20% higher for labor when working with construction teams with licenses. Therefore, most homeowners only apply for permits if they are changing the building’s structure, repairing the foundation, or upgrading electrical circuits.

When buyers find a home they love, they often have to make compromises. Although most new homeowners can move in without issues, there are some cases where the City may ask for an inspection:

Here are three possible situations based on three cases I’ve encountered in my ten years of experience:

  1. If a neighbor reports remodeling without permits to the government, they may do so because the homeowner may have offended them. One of my clients purchased a house intending to rent it out, but the tenant sublet it to Airbnb guests. The neighbor reported safety hazards, leading to the discovery of the home’s unpermitted renovations.
  2. After moving in, new homeowners may want to make minor remodeling. During the construction process, garbage trucks, large construction vehicles parked at the front door, or garage doors left open may attract the attention of the government, resulting in an inspection to check whether the homeowner had obtained the necessary permits.
  3. When a house is listed for sale by a real estate agent advertising the property’s interior, the government may discover unpermitted renovations. In one case, I represented a single-family home in Newark, and the advertisement was posted on Zillow. Only a few hours after being listed, the government contacted me, saying that they noticed that the kitchen cabinets were produced after 2000, and yet, no permit had been applied for since that year.

If the government discovers that a home has undergone unpermitted renovations, even if they were made by the previous owner, the current homeowner must collaborate with the government to obtain new permits or remove the unapproved work.

There are generally a few outcomes to consider.

Firstly, if there has been significant structural changes made to the house, such as adding an extra bathroom, kitchen or combining rooms, it can potentially lead to safety concerns and may even be deemed unsafe by government authorities. In this case, it may be difficult to apply for permits and the changes may need to be reversed.

Alternatively, if the renovations are minor and mainly involve cosmetic changes such as replacing cabinets, updating the bathroom or changing lighting, then permits will still be required. This involves submitting detailed design plans indicating the size and layout of the changes as well as electrical and plumbing work.

If you have a contractor who is knowledgeable about building codes and can answer the City’s questions accurately, then the permit process can be straightforward and only cost a few hundred dollars. However, if you cannot find a professional contractor to assist you, then it may involve opening up walls and removing cabinets and tiles to check if the renovations meet code. After which, restoration works may need to be done to match the original design.

In terms of buying a house, it’s important to weigh up the pros and cons such as location, school districts and renovation costs. If you do come across a property without proper permits, don’t panic! There are ways to resolve the situation.

You are always very welcome to contact Carol Zhang @ 510-565-0005, your realtor at Bay Area.