Unpermitted space is a common dilemma in our area. Often homeowners finish off attics or basements without wanting to go through the hassles or expenses of getting permits. Often they want to avoid the extra property value increase for tax reasons. Well these decisions come back to haunt them when they try to sell. Price per square foot is a commonly used measure of value for homes, at least it is in the Triangle of North Carolina. Frequently, listing appointments get tangled when discrepancies in the online tax records for square footage differ significantly from the measured amount of heated square feet. The red flag goes up, and as agents, we start searching for permit records. Buyer's agents and listing agents are much more in tune with their liability regarding the square footage of a home now than they were years ago. Law suits against agents and former homeowners have raised awareness.
Recently, a listing of mine had about 400 s/f of unpermitted finished space. At about $100/sf, that adds up to about $40,000 (I know you can do the math, just put that in for the WOW factor). The sellers purchased the home years ago with the room already finished without knowing it was not permitted. Now, in order to advertise this space - without future legal worries, we had to get it permitted retroactively. Several buyer's agents have already called me to ask about the permitting of the room. The hassle and expense of the process was worth it for the homeowner to be able to advertise and sell that area. Advertising 2700 heated square feet means 2700 permitted square feet! Nobody wants a buyer coming back after the sale claiming a $40,000 discrepancy.
The lack of a permit can also negate future insurance claims. If a fire or other problem arises from the unpermitted space, the insurance company can deny claims on the space and any portion of the home damaged from problem. Can you imagine that coming back against the agent or seller?
The process for this listing started of at the permitting office with about $225.00 in fees. The process in Apex, NC requires you to have the area updated to current codes, not the codes that were in place (and much less stringent) 15 years ago when the work was done. Also, the inspector had the homeowner remove some wall panels and ceiling panels to see what was going on behind the walls. We were fortunate, not too many issues on this home. Because the house was listed for sale, we had to find a licensed electrician and HVAC business to sign on the permits. If permits are applied for by the homeowner, and they are living in the house, not on the market, this is not a requirement. The homeowner can sign off as his/her own general contractor (under $30,000 of improvements). I was able to find contractors I have done a lot of work with to help us out, and we had them do the code improvements. The sellers did have electrical code upgrades to make - ARC fault, added few ground fault outlets, replaced all outlets with tamper resistant outlets, and added an outlet (one every 6 feet). They had to insulate an exterior wall around a french door, which was luckily only 2 sections of paneling. The homeowners had to remove a section of paneling to show that a header existed above an opening - luckily it was up to code. The overall expense was about $1,600, certainly worth it.
Again, if you are considering converting space that will increase the livable area of your home - adding a finished attic or finished basement- take the time and spend the money to go through the local permitting process. It's much easier to do this before than after the fact. And I'm told that inspection fees can be punitive on a homeowner who decided to finish off rooms without getting permits up front.
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