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Unpermitted Remodels: Who is Liable?

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Question: Unpermitted Remodels: Who is Liable?
Q: A homeowner discovers that a basement finish done by a previous homeowner had not been permitted. The homeowner now wants to sell. Is s/he liable for costs associated with the unpermitted remodel? Can the homeowner seek redress?
Answer: A: In most cases, the burden falls on the current homeowner. Even though the current homeowner did not undertake the remodel, s/he is seen as a softer target for permit-issuing authorities. The current homeowner has a greater interest in ensuring that the house is permitted than a previous homeowner from years ago.

Typical Unpermitted Remodels

Remodels that homeowners try to pass under the permitting radar: basement remodeling; converting garages into living rooms or bedrooms; attic conversions; decks. High-profile work such as home additions and adding on a second story tend to be permitted, though don't assume so.

Redress: Can I Sue?

Redress may be difficult if the house was purchased more than a few years ago. Statues of limitations for written contracts (which define most real estate transactions) vary by state, ranging from 3 to 15 years, with the average being 5 years. A handful of states--Alaska, Indiana, and Kentucky--have shorter statutes of limitations applicable to real property transactions.

If the remodel work was not done up to code, the homeowner must bring it up to code. This may mean repairing electrical work or plumbing. But it also may mean unexpected things like adding new doors or windows to provide ingress/egress in the event of fire.

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