Buying a Home that was Remodeled Without a Permit

Before you purchase a home, use the below expert advice on searching for any outstanding open or expired permits on the home.

Q: I recently bought a home only to learn afterward that the seller made modifications without obtaining a permit. Is this legal and do I have any recourse against the sellers for non-disclosure?  

A: You may.

Concealing defects or failing to disclose them may result in multiple damages to the sellers of a home, vacant land or commercial properties. Buyers may sue for breach of contract due to a seller’s intentional misrepresentation and seek costs for repairs of defects or even recission of the sale. Simply because the sales agreement states the sale is an “As Is” sale doesn’t allow the seller to conceal information that may be harmful to the buyer or public.

Concealment or failing to disclose comes in many forms and one that is common in real estate is “Open or Expired Permits.” Such permits are issued by a County or building department but have not been formally finalized within the time allocated or required to obtain a final inspection. Once a permit’s time has lapsed, meaning the issuing department did not close it; it is referred to as open or expired.

Oftentimes, the seller may be unaware of outstanding open or expired permits. It is up to the buyer to request that a title company perform a search for open or expired permits.  Even though Florida residential transactions require the seller to do all the work necessary to close open permits at seller’s cost, they are often overlooked. Title companies are not responsible to perform such permit searches, although most in Florida encourage sellers to pay for such searches. Title insurance covers lien searches but not open or expired permits.

Then there are those sellers that conceal building modifications made without ever applying for a permit. The seller’s failure to disclose remodeling that required permits can become a buyer’s worst nightmare. Consider the following example.

Roger and his wife decided to add a full bath to their home and failed to obtain any permits. Three months following their remodel, they sold their home. The fourth bath added great value to the selling price and enhanced and accelerated the sale in a community consisting of mostly homes with two-and-a-half or three baths. Thirty days following closing, the buyer’s child was electrocuted caused by a damaged hair dryer cord that fell into a sink full of water. The hair dryer was plugged into a receptacle improperly installed too close to the rim of the sink.  She suffered unconsciousness and nearly died. The buyers brought charges against the seller resulting in the sellers buying back the home and paying for injuries to the buyers’ daughter. The sellers ended up paying damages amounting to 45% more than the selling price of their home and were required to tear out the bathroom and rebuild under permit.  

Before you buy or sell a home, consult with an experienced Real Estate Title and Closing Attorney such as Jackson Law PA who is familiar with rules and regulations regarding open and expired permits or building without any permit whatsoever. Seller disclosure is everything.