Consequences of Buying a Fixer-Upper with Unpermitted Work

Man Renovating a House

One of the quickest routes to homeownership is buying a fixer-upper. Apart from paying far less money, you’d face less competition because many aspiring homeowners want properties ready for relocation. Also, you might be able to negotiate with the seller to settle some of the closing costs, especially when you’re buying the house as is.

However, the biggest risk in buying a fixer-upper is perhaps discovering unpermitted work too late. Experienced Austin, Indianapolis, and Denver real estate brokers would urge you exercise due diligence to uncover them early, or else you might suffer the consequences.

Here are the dangers of learning about the property’s skeletons in the closet after the sale:

More Work

You already know that you would need to live through certain remodeling projects to make your prospective fixer-upper more habitable. With illegal renovations, though, the areas that you thought are in good shape are nothing but mirages.

When the authorities learn about them at some point, you might be forced to redo the home improvements inconsistent with the building regulations. It may not be your fault, but bringing it up to code is now your responsibility as its new owner.

Greater Expenditure

Unexpected home projects are going to hurt your pocket. You might consider it a bargain, but you could have asked for more discount had you known about its dirty secrets before closing the deal.

Furthermore, you might be held liable for paying its back taxes, which are applicable when the unpermitted renovations have affected the property’s value. When it becomes the case, your long-term costs could outweigh the potential savings of owning your prospective fixer-upper.

No Insurance Money

Even if you don’t know about your property’s unlicensed home improvements, your insurer may nevertheless take them against you. In case you suffer a loss at some point, your claim for damages may be denied.

Do your homework to make sure your fixer-upper isn’t hiding any unpleasant surprises. Ask its current owner about its maintenance records, and look for verifiable proof to make sure what you see is what you’d get.

About Eleanor Sharp
Eleanor Sharp is the author of AGSE Law. As a paralegal, she has worked with attorneys in many fields to ensure their clients get the best advice and representation. She is passionate about helping people understand the complexities of the legal system so they can make better decisions for themselves. Eleanor loves reading, travel, and spending time with her family. She hopes her articles will help others navigate life’s legal intricacies with confidence.