In Los Angeles, you will find that many construction projects especially with Single Family Homes are not permitted.
Why would a property owners choose not to get permits?
1. Speeds up the construction process
2. Avoids Permit Fees
3. They are doing a construction project which would not be allowed by the city otherwise
4. Because it is easy and they can get away with.
There are three issues you have to consider if you are contemplating not permitting construction or buying a property with non permitted construction work: Resale Value, Code Enforcement Risk, Insurance. As a real estate agent, I always recommend getting permits.
Nonpermitted construction work’s affect on Resale
In my experience, most buyers in Los Angeles are willing to accept work done on houses with no permits. The only exception to that, is additions, new buildings, or pools, not having a permit for these is a deal killer. Los Angeles buyers are use to not finding a permit for everything. The usual suspects that are missing permits include: plumbing (water lines and waste lines), electrical (except for new main panels), kitchen remodels, bathroom remodels, flooring, windows, moving around water heaters and laundry, exterior painting, installing ducting ac and heaters etc. When you get into the higher end home market permits become more prevalent.
Is the work good quality or not? Since there are no permits showing you that the city approved the job- it’s buyer beware. You have to be okay with not knowing if the work was done to code, and the possibility of dealing with an order to comply, or paranoia of being cited the next time you do a new project in your home in the future.
You can only rely on what you see, and the reputation of the contractor who installed it. I always try to track down the contractor who did the work if they can be found when I am dealing with a non permitted situation. If problems arise later, call them and tell them to fix it. The longer it has been since the job was completed the more comfortable I feel because I know that someone has lived in it and they were ok with it.
What happens if I have non permitted construction and the city finds out?
Non permitted work is considered illegal so be aware of the risks.
There are two ways an inspector can discover a building code violation:
1. A neighbor or tenant calls the Building Department and complains
2. An inspector finds a code violations during another inspection out in the field
The Risk for code enforcement depends on how likely you are to be cited and the cost to correct the problem if you are cited.
How likely are you to be cited?
It is very hard for building inspectors to spot non permitted work inside the home that is not visible from the street or any other public right of way. That is why so many home owners are able to get away with no permits- because it is hard to catch.
Here are some stories about the city citing non permitted construction:
Story 1: I heard of an owner in Silver Lake getting sighted with an order to comply for a non permitted deck, because the decks were visible from a neighbors backyard. Be careful in hilly area’s to check permits on buildings in the back yard like decks, pools, or patios.
Story 2: A home owner decided to get a permit for a new addition in their home, and when the building inspector came out for an inspection- they discovered that the heating and cooling system didn’t have a far enough set back in the backyard, went back to the office, and search on the property activity report, and discovered there wasn’t any permits pulled for installing the HVAC. He then writes up an order to comply for the homeowner to move the condenser farther away from the house.
Story 3: The building inspector is driving on his way to a building inspection and sees that a property along with way is having a new roof done, but there is no permit posted in the front window. He writes down the address and when he gets back to the office, checks the property activity report, and discovers no roofing permit was pulled and writes an order to comply.
Story 4: Homebuyer purchases a property with a converted garage to guest house, they bought the property partly because they liked having the income from renting the guest house out. A nosy neighbor who doesn’t like having “renters” nearby makes an anonymous call to the building department and reports the violation. The inspector finds out about the unpermitted garage conversion, and the zoning of the property does not allow multiunit dwellings. The building department orders the homeowner to revert the guest house back to its permitted use.
Story 5: You want extra income so you decide to turn your 4 bedroom house into a 10 unit boarding house without any permits. It is only a matter of time before the city comes knocking on your door…
How much will it cost if I am cited?
The cities process for bringing a property with out permits into compliance is reasonable. Once an inspector has identified a violation, like any of the stories above, they will write an order to comply. This automatically generates a code violation inspection fee of $356.60. No matter what the issue sited, there is a compliance period of only 15 days to correct the violation. If you are dealing with a major problem, this probably wont be enough time to fix it- so there are two options- 1. request an extension for $337.08, maximum length 6 months, I always recommend asking for the maximum or 2. Get fined an additional non-compliance fee of $550. If you delay in paying the tickets, they double and triple just like traffic tickets do.
At this point, the order to comply tells you what needs to be done to permit and legalize the work. They may demand you to demolish, replace, request a variance or modification, or attain a permit. In the case of non permitted new construction or additions, they pose the highest risk, because if they were not built to code, you may be required to tear them down and have the largest losses.
Most of the times builders or investors who add on, will make sure that it is permitted, because if they don’t the additional square footage is ignored in the bank appraisal. I’d usually recommend walking from a deal if the addition or new construction was not permitted.
For the systems in the house, there is much greater leeway here, because they can usually be fixed, and if they need to be replaced, they have a much smaller price tag.
Does it need to be permitted to be insured??