What to Do if Your Newly Renovated Home Lacks Required Permits

Moving into a recently-updated home can be one of the most exciting feelings. You don’t have to worry about that old stove losing function in the next few weeks, or that outdated carpet that you just can’t trust to be clean. But unfortunately, if the proper permits haven’t been pulled for the work that’s been completed, you could have much larger issues to face.

Why Would the Previous Homeowner Skip the Permit Process?

Permits are skipped for a variety of reasons, even though they shouldn’t be. To start, it’s important to note that this is most common in single-family homes and townhouses. Apartments and co-ops have stringent renovation rules, and it’s almost impossible for residents to sneak past without filing the proper paperwork. In a house, on the other hand, there’s no one to stop individuals from doing the work on their own without approval from the Department of Buildings.

Some reasons behind skipping permits include:

Not wanting to take time for administrative work.
Covering up a larger issue (fixing water-damaged walls and floors without stopping the leak, for example).
Illegal work (i.e. turning a non-conforming space into a bedroom).

As you can see, these are all situations that you wouldn’t want to be left with after you make it through the home purchasing process. But what should you do if this does happen to you?

What Happens If You Purchase a Home That Lacks Permits?

If you purchase a home that lacks permits, you’ll be left with a list of required tasks — some much simpler than others.

To start, financing could be a challenge. If the certificate of occupancy doesn’t match your home’s layout, the bank could deny your loan. You’ll also have difficulties obtaining insurance, as many companies don’t cover homes with non-permitted work.

You will then need to file a retroactive permit. This process comes with penalties. If you didn’t know about the illegal work when you bought the home, you may be able to get the fees waived. But you’ll still be footing the bill to fix — or completely remove— the work that was done under the table in your home.

You may also have trouble finding a contractor to help, as many workers don’t like to take on someone else’s work if it wasn’t done correctly or up to code.

And even if you’re able to ignore the lack of permits, you’ll run into issues down the line. These changes will be noticed when you decide to do legal renovations in your home, and they’ll likely need to be corrected before you move on to the projects you set out to do. Lastly, you’ll need to disclose everything once again when you move on to selling your home.

All in all, purchasing a home with non-permitted work can be an administrative nightmare, as well as a money-drainer. Be sure to do your research before making your purchase — or reach out to our experienced Brooklyn team for advice! Because even if it looks like your dream home, the issues you’ll face may not be worth going through.