Selling a property in Los Angeles can be challenging and sometimes complicated, especially if your home has unpermitted work. Whether it’s a kitchen renovation, an extra bedroom, or even an accessory dwelling unit (ADU), unpermitted work refers to any construction done without obtaining the necessary permits from local authorities in Los Angeles City. This can lead to significant issues when selling your property or even with home insurance and mortgage approval.
Let’s examine how unpermitted work can complicate things and what you can do to make the process smoother.
What is Unpermitted Work?
Unpermitted work refers to any modifications or improvements made to a property without the required permits from local authorities. This can include:
- Room additions
- Electrical or plumbing upgrades
- Structural changes
- Major renovations
Unpermitted work can lead to several issues, including fines, legal troubles, and difficulties when selling the property. Therefore, it is essential to address these issues before selling your home. Because requirements vary by area, it’s important to learn about the regulations in your area.
Consequences of Unpermitted Work
1. Legal Penalties and Code Violations
Los Angeles has strict building laws, and if unpermitted work is discovered, you could face fines or be required to demolish the unapproved construction. The Los Angeles City Code Enforcement may even issue a stop-work order, preventing further construction until the issue is resolved. This could involve hiring an architect to bring the work up to standard, which adds cost and complexity.
2. Insurance Policy Problems
Home insurance in California typically requires that all construction meets building standards. If your house has unpermitted work, your home insurance company may refuse to cover related damages. Imagine facing significant damages, like a burst pipe from an unpermitted plumbing job, only to find your insurance policy won’t cover it. This risk is a significant hazard for homeowners.
3. Issues with Financing and Mortgages
Most real estate agents and lenders require properties to fully comply with local laws before approving a mortgage. If you plan to sell your house in Los Angeles, unpermitted work could scare off buyers, who might struggle to secure a loan. Lenders won’t provide a mortgage for homes with work that doesn’t meet building codes, making the selling process even more complicated.
4. Zoning Laws and Certificate of Occupancy
Unpermitted work can run afoul of Los Angeles zoning laws. You might find that your property is not eligible for a certificate of occupancy, which is required for selling or renting your property. Zoning authorities in California are strict, especially in cities like Los Angeles and San Francisco, and violating these zoning regulations can result in hefty fines.
5. Home Inspection Failures
Before selling your property, a home inspection is mandatory. If the inspector finds unpermitted work, it could significantly affect the sale. You might be required to make corrections, which can increase costs and delay the process. In some cases, buyers might back out entirely if the home inspection reveals too many risks.
6. Increased Property Tax
Unpermitted work can sometimes lead to a reassessment of your property value. If the Los Angeles tax authorities discover additional square footage or home improvements, they could increase your property tax. This could affect your current income and your property’s affordability for future buyers.
7. Building Safety and Liability Risks
Unpermitted work may not meet California’s stringent safety standards, putting you at risk of lawsuits if accidents occur. For example, faulty electrical work or poorly installed plumbing can pose serious risks to occupants. Sometimes, you could face legal complaints or lawsuits if someone is injured due to the unpermitted modifications.
8. Rental Market and ADU Complications
With the growing demand for affordable housing in Southern California, accessory dwelling units (ADUs) have become popular. However, building an ADU without permits can make it impossible to rent out legally. This can be a major problem if you hope to increase your income by renting out a unit or an apartment on your property.
9. Costly Corrections for Building Code Compliance
If unpermitted work is discovered, you may be required to bring it up to current building codes. This might mean hiring licensed contractors, securing new permits, and possibly tearing down parts of your dwelling to make the necessary fixes. Depending on the extent of the work, this could cost thousands of dollars, especially for major renovations like kitchens or garage conversions.
10. Difficulties in Real Estate Transactions
Real estate agents will tell you that unpermitted work makes selling a home much harder. Buyers may request that you handle the unpermitted work before the sale, which can drive up costs. This situation also weakens your position in negotiations, as buyers have the leverage to demand lower prices or ask for costly repairs.
Solutions to Unpermitted Work in Your Los Angeles Property
Despite the complications, there are solutions for handling unpermitted work in your home.
1. Obtain a Retroactive Permit
Los Angeles allows for retroactive permits, which means you can apply for a permit even after the work is completed. This usually requires submitting architectural plans, paying fees, and passing a building inspection. While this process can be time-consuming, it’s often the best way to ensure your property complies with local laws.
2. Work with a Real Estate Agent Who Understands the Market
Some real estate agents specialize in properties with unpermitted work. They understand California real estate laws and can guide you through the complexities of disclosing unpermitted work to potential buyers while protecting yourself from legal risks.
3. Sell As-Is to Real Estate Investors
If you don’t have the time, money, or interest to fix unpermitted work, consider selling to a real estate investment company. Companies like Dasaa Investments will buy your property in any condition, saving you the trouble of making costly repairs or dealing with zoning issues.
Protecting Yourself Legally
Disclosing unpermitted work when selling your home is critical to avoid future lawsuits. Real estate law in California mandates that you inform potential buyers of any known issues, including unpermitted work, even if you have a certificate of occupancy. Failing to disclose could lead to legal trouble, especially if the new owners discover problems after purchasing the property.
Final Thoughts
Unpermitted work in your Los Angeles home can cause numerous problems, from insurance policy issues and home inspection failures to tax reassessments and potential lawsuits. However, there are ways to navigate these challenges, whether through obtaining retroactive permits or selling the property to a real estate investment company.
If you are in this situation, consider contacting experienced real estate agents, inspectors, or investors like Dasaa Investments. With their help, you can avoid the pitfalls of unpermitted work and confidently move forward.
For more information, contact Dasaa Investments today at (949) 232-0897 or email our team to explore your options. We specialize in buying homes as-is, helping you avoid the complexity of dealing with unpermitted work and ensuring a smooth, stress-free sale.