Checking for open building permits when you buy a home
Buyers usually have no reason to suspect that an outstanding permit exists on a home they intend to purchase. After all, repair or remodel work may not be obvious during a visual inspection of the property and standard purchase contracts often do not include a contingency clause for verification of open permits. Buyers rarely request that the seller disclose work that was performed years ago. The outstanding-permit issue may lay dormant until the new owner tries to modify an electric meter, remodel a room or repair a heating system, only to find that previous work has not been officially inspected and approved. Since open permits or building code violations will not be listed in the preliminary title report nor be covered by the title insurance policy, it is important to clear up unpermitted work early on and avoid a possible delay in the closing.
Attorney Tom Olsen: Use a great text question and that is somebody bought a house, and like buy the house, they get in there and they find out that the previous owner or somebody somewhere back in the chain title did improvements to the home and did not get permits. That is getting to be a more and more common problem.
Now, this text wants to know, can they sue the home inspector to get their $500 back? The answer is no. Your home inspector is not looking for work that was done without permits. That is not the inspector's job. That's not the title company's job.
Now one thing that the title companies are doing now, and this is relatively new because they weren't doing it just a few years ago, title companies now are always searching for open permits, people who got a permit to put on a new roof or do some electrical work. Whoever did that work, finished the work but they never went and close out the permit. That is standard procedure for title companies now, to close out old permits. Now, does not resolve, does not fix this issue about prior owners back in the chain of title, doing work on the property without a permit.
It's a real problem because once you know that this work was done without a permit, now you're obligated to tell your buyer down the road and guess what, your buyers not going to buy it. I don't know the best way to resolve this would be this, that when you buy property and you're using a real estate agent, that standard procedure, they will give you a seller's disclosure to fill out or they'll give it to the seller.
That seller's disclosure is about five pages long, is probably 100 questions that ask the seller to mark down yes, no, don't know. Certainly, some of those questions have to do with, "Did you ever have work on this property done or you did not get a permit for it?"
The best you can do is to make your sellers aware that if that was done, your sellers are obligated to disclose it to you and for this text or they're saying can they sue the home inspector, the answer is no, but if their sellers did this work without a permit and failed to disclose that as part of this closing, you as a buyer of this property could certainly sue those sellers for your damages if you can prove that the sellers did the work and if you can prove that there no permit was gotten.
Hopefully, I explained it to you folks in such a way but it just let you know, if you're buying properties these days, this permits and closing out old permits is an important issue that should be addressed by your attorney when you're getting advice about it.