The risks of unpermitted improvements
As the Solano County real estate market continues to improve and the weather gets nicer, homeowners are increasingly looking for creative and inexpensive ways to maximize profits when they sell their largest asset. It should come as no surprise that every house has the potential to make money with the right improvements. However caution should be noted. Unpermitted improvements can result in a lot of trouble for owners looking to sell.
Many sources document that unpermitted additions are popular in California because of property tax implications extended through renowned Proposition 13, which originated in 1978. Sellers hoping for higher profit, as well as buyers, must be aware of the legal ramifications of homes with illegal improvements. Being in either role can result in serious complications and cause expensive issues that are extremely counterproductive – and add to time delays in completing transfer transactions.
Unless those involved with real estate transactions in Solano County are careful not to buy homes with unpermitted work, they could quickly find themselves in the midst of a host of threats including:
1. Financing restrictions or denials
A buyer initiating a contract to purchase a home with money in escrow encountering illegal improvements may find themselves without financing if lenders learn of previously unreported, unpermitted improvements. Contacting subsequent lenders could become far more difficult when such lenders look into the problematic state of the transaction.
2. Marked properties
Once owned, these properties may also become exceedingly difficult to resell in the future as subsequent prospective buyers will also find lenders requiring costly repairs to the illegal improvements before loans are approved. Ultimately, future buyers may find themselves unable to obtain financing or title insurance on homes with unpermitted modifications and/or modifications.
3. City and/or county fines and penalties
Whether the buyer was the owner at the time the illegal work was done or not, the result is the same; the current owner is liable for all required repairs to get the home up to code when the violations are uncovered. Such code violations can add up quickly when they include fines and time-related penalties. In Solano County fines can rapidly approach thousands of dollars, depending on the severity and extent of the illegal improvements.