Are you ready to renovate your house? Maybe you have decided to pull the trigger on that new bathroom. Perhaps you are thinking about finishing your basement or redoing your kitchen. One of the first things you'll need to do before you start is get permits. Or do you?
Perhaps you've had a builder, remodeler, or handyman walk through your house and give you an estimate. Perhaps he or she has said that the work could be done quicker and a little cheaper by not pulling any permits.
Or maybe you plan to do the work yourself and think nobody would even know if you did it without permits. After all, it's your house! And how bad can it be if you got caught, anyway?
Ultimately, the choice to get permits is yours. But in this post, I will go over why obtaining the proper permits is beneficial in the long run. I'll also walk you through the likely consequences you'll face if you ignore the rules.
Permits exist for a reason: Safety
Before I mention the consequences you could face by not getting a permit, let me explain why permits exist. They are there for a reason: safety.
When you apply for permits, not only will the permitting authority usually review your plans, but they will send inspectors to make sure everything is done right. A permit not only likely include a review of your design, but it will get you an inspector to check your project for safety during construction.
If you have hired a contractor, these official inspections help ensure that the people doing the work aren't cutting corners when it comes to safety and compliance with local building codes.
Imagine if we had no building permits and inspections
Permits can sometimes seem like a nuisance. They are an added expense, and applying for permits can sometimes be a long process.
I get it. You want to save money and get started on your project right away. However, imagine what construction would look like if we didn't have the safeguards of design review, permitting, and inspections in place, or if building codes weren't enforced.
You can see the results in the news, when a place with lax permitting and design-review standards suffers an earthquake or a fire. Buildings constructed of substandard concrete crumble to the ground, and innocent people are trapped in buildings without proper fire escapes.
Consequences of building without permits
Even though the permitting process can sometimes seem like a nuisance, it's there to protect us all. But maybe you think that your own risk is low and that you're going to just trust your handyman who says he can do the work without permits. If you decide to do unpermitted work, be aware of the following potential consequences.
Consequence #1: Safety
As I mentioned above, this is the primary reason the permitting process exists. Yet it is sometimes difficult to see how doing a small remodel project could really compromise your safety. After all, you're not building a large multi-family building, you're just updating your kitchen or bathroom. True enough. However, the cumulative effects of unpermitted work add up over the years and can pose a very real safety risk to your family. This is especially true when it comes to electrical work. You really don't want an unqualified person messing with the wiring behind your walls and never having their work inspected. It's easy to see how this could lead to fire or electrocution.
Consequence #2: Resale value
If you ever decide to sell your home, you're going to wish you had pulled those permits. Even if you "get away" with not getting a permit when you initially do the work, you never truly get away with it. Sooner or later, you're going to hit a metaphoric brick wall for that literal brick wall you built without a permit.
Let's say, for example, that you want to sell your house. Most buyers will be wary of buying a house if there are renovations done without a permit. If they don't immediately walk away, they are either going to ask you to remedy the situation by going back and pulling the proper permits (a costly process), or they will lowball you because most renovations without a permit aren't appraised into your house's value. Either way, you are going to end up with much less money from the deal than you might have been counting on.
As the seller, you will be required to fill out a form on which you must disclose any unpermitted work. If you neglect to disclose anything, the buyer can later sue you for damages.
Consequence #3: Complications getting a loan
Maybe you have no plans to sell your house, and you think you don't care about appraisals. Well, think again. If you ever want to refinance your home mortgage, you need to get an appraiser to check your house. And that's when your unpermitted remodel will catch up with you.
Not only will you not get a loan for your house's value (because it won't be properly appraised), you may be disqualified completely. If you remodeled without a permit, you might get turned down by the bank.
Finally, if you buy a home with major unpermitted work, and your mortgage lender finds out about it after the deal closes, they could require you to immediately repay your loan. It's a scenario that doesn't happen often but is a nightmare when it does.
Consequence #4: Insurance
Your insurance company might refuse to pay for any damages caused by unpermitted remodeling work. Imagine if your new unpermitted bathroom floods your entire house, causing damages up to thousands of dollars. Or if a faulty stove in the kitchen starts a fire.
Likewise, if you build a new addition without a permit, and a visitor slips and falls in that room, your homeowner's policy may not cover your liability.
Consequence #5: City penalties
Let's say you don't need to sell your house, you don't need a loan, and you're lucky enough to have a solid structure even if the company you hired was willing to cut corners. That's extremely lucky! Lucks tends to run out, though.
Your lucky streak will be over when the city finds out. Perhaps your city's assessor will notice an extra bump-out addition when doing your annual property tax assessment. Or your grumpy neighbor will have caught wind of your shady remodeling work and will call the city to report you.
The city can and will fine you for it. And it's not a cheap fine either. For instance, the city of Seattle will issue a stop-work order (if you are in the midst of construction) and fine you $500 per day for building without a permit. If they discover the work after it's completed, they will still fine you and require you to apply for the proper permits.
Consequence #6: Wasted time
The permitting and inspection process does take time. However, if you are in a hurry to get your renovations completed, consider this: It's going to take a lot more time if you start your remodel without a permit and the city requires you to stop construction or, worse, open up walls or tear out the new work so it can be properly designed and inspected. You end up with nothing to show for all the time and money you spent. Talk about bad decisions.
See also: Can You Remove a Wall?
So what do you do?
I hope it's clear by now what a bad idea it is to remodel your home without a permit. Here are some additional thoughts on how to proceed if you find yourself facing permitting dilemmas.
What to do if you are in the process of buying a home and find out it had unpermitted work?
The good news is that you discovered this before you closed on the deal. Depending on how hot your real estate market is, this can give you significant leverage. The simplest course of action is to walk away from the deal if your home inspection uncovers unpermitted work. If you truly love the home, the price is right, and the work was minor, then you have two choices: 1) ask the seller to go back and get the proper permits before closing; 2) accept the house as-is but negotiate a lower price. Keep in mind that you will be taking on the aggravation and potential fines and permit fees of the unpermitted work yourself. You will also have to disclose it when you go to sell the home someday, which will lower the selling price of the home.
What if you buy a home and find out years later that it had unpermitted renovation work?
Sorry, that's bad luck. It is possible to contact your city's permitting authority and retroactively permit the work. Depending on how major the renovation was, it may require you to hire an architect, open up walls, or even demolish parts of your home if, for instance, an addition was built too close to your property line. Keep in mind that, as the new owner, you will be responsible for any fines. If the seller failed to disclose unpermitted renovation work at the time of the sale, and you incurred damages remedying the problem, you may be able to file a civil suit against them or reach a settlement agreement. But don't put the problem off. States have a statute of limitations for how long after the fact you can file a suit. In Washington State, for instance, it's three years. In many other states, it's only two years.
What if my general contractor/handyman/plumber/electrician says I don't need a permit to remodel?
Most reputable contractors and remodeling companies will be upfront and honest with you about the permits that are required by law. After all, it's in their best interest to follow the rules so they don't get fined, shut down, or lose their license. However, there are some less reputable companies that will offer to do unpermitted work. As the homeowner, it's in your best interest to verify whether the remodeling work requires a permit or not. If you find out that you are required to get a permit and the company you hired is willing to continue without one, you might need to ask yourself where else they are willing to cutting corners. An offer to do unpermitted work where a permit is required is a big red flag. I recommend you find a more reputable contractor.
What if my remodeling project is very small? Do I even need a permit?
Check with your local building or permitting department. Often, they make exceptions for very small projects. Here's the guidance from Seattle's Department of Construction & Inspections:
Minor repairs or alterations. You don't need a permit for minor repairs or alterations that cost $6,000 or less in any 6-month period. The $6,000 limit is based on fair market value of labor and parts, even if you do the work yourself.
You need a permit for any work on load-bearing supports, changes to the building envelope, and work that reduces egress, light, ventilation, or fire resistance no matter how small the project.
Keep in mind that even if you do not need a building permit for your small renovation project, you may still need an electrical, plumbing, or other permit. There are usually exceptions and subtleties to the rules, so it's always a good idea to give your local building department a call to make sure you're correct in your understanding that you don't need a permit.
What if I am selling my home that had unpermitted remodeling work?
When you list your home, your agent will ask you to fill out a disclosure form. Answer the questions honestly. If you don't, you risk sabotaging any potential deal and opening yourself up to civil lawsuits later on. If you did any remodeling work without a permit, state that on the form. If previous owners did any such work that you know about, state it on the form. If you honestly don't know if past work was performed with a permit or not, answer, "Don't know." Confirm with your real estate agent or attorney, but in many cases, you are not required to go sleuthing around for past permitting violations that you don't already know about. The buyer's home inspector or bank appraiser will likely find these and report them to the buyer.
Are you ready to remodel the right way?
Looking to renovate? Hire a reputable company that follows the law and protects the safety of your family (and your investment in your home). At CRD, we have dedicated ourselves to remodeling Seattle homes for more than 40 years. If you are ready to change your house for the better, contact us for a consultation. We are always happy to try to help.