California Discovered unpermitted work 1 year after sale – seller did not explicitly disclose
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California Discovered unpermitted work 1 year after sale – seller did not explicitly disclose
The seller claimed that he put in $300,000 worth of renovation at the property. We had general inspection, electrical and plumbing and no red flags were raised. We knew the A/C, furnace and hot water heater were on their last legs and we had budgeted to replace those anyway. It was a very competitive market and we had our hearts set on a specific neighborhood. After seeing 25 houses, we fell in love with this house. We still love it and we have not found any major problems. However, we recently discovered that some the work is not permitted – a load bearing wall has been removed, a fireplace has been de-commissioned, some windows were converted into sliding doors, the stair orientation has been changed, and a large patio cover has been added. We know this because we have recently uncovered the original floor plan from the attic of the house. Before closing, I asked for permits but no permits were found except the original construction of the house and the pool. And our realtor said,
Asked on October 26, 2019 under Real Estate Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
Did the seller do the work? That's the key, and really only, issue. If he did, he was obligated to either make sure it was permitted or to disclose the lack of permits (so you could decide whether to buy without permits and deal with the issues yourself, later). Whether something is permitted or not is NOT something readily discernable during a walk through or inspection, and so is something that must be disclosed by a seller. The law requires disclose of significant or important issues that are not readily obvious to a buyer, and a lack of permits would be such an issue. A failure to disclose a known lack of permits--i.e. known unpermitted work--is fraud, and fraud would provide you grounds to sue for compensation, such as the cost to redo any work, apply for and get permits, etc.
But the key is, the seller must have known, which in this situation--buying a house at foreclosure and not living it it--means he must have done the work himself. If the unpermitted work was done prior to him acquiring the home, he would have had no way to know of the lack of permits; if he did not know, he did not commit fraud, since you cannot disclose that of which you are not aware. So to be able to seek compensation, you'd need to be able to show he did this work.
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