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Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 30864
Experience:  30 years of real estate practice experience.
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A homeowner performs upgrades to a home for which no permits

Customer Question

A homeowner performs upgrades to a home for which no permits were issued. The work does not meet modern building codes. When the home is sold, the financing bank mandates an inspection. What can happen? How does the answer change if the buyer is a cash buyer?
Submitted: 7 months ago.
Category: Real Estate Law
Expert:  Loren replied 7 months ago.

Good afternoon. I am Loren, a licensed attorney, and I look forward to assisting you. I am sorry to hear of your dilemma. I realize how frustrating this is for you and I hope to provide you information which is accurate and useful, even though it may not be the news you were hoping to get.

What is likely to happen if the discover the upgrades are not code compliant is that they will demand the upgrades be brought in to compliance before they disburse the loan. It is possible, depending on the scope of the work, that they will allow the loan to disburse with an escrow from the seller to cover the cost of bringing the property to compliance.

Expert:  Loren replied 7 months ago.

I realize this is probably not the answer you were hoping to receive. Also, please remember that this is not a moral judgement on my part. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's legal position, but accurately reflects their position under the law. I hate it, but it happens and I only ask that you not penalize me with a bad or poor rating for having to deliver less than favorable news.

Customer: replied 7 months ago.
Don't worry I will give you a great rating. I should clarify the homeowners primary concern is the property tax authorities. Their involvement would presumably enter in when compliance becomes mandated. What if anything are they likely to do with regards ***** ***** prior homeowner not reporting upgrades?
Expert:  Loren replied 7 months ago.

The taxing authority will not be a problem. In all likelihood they will just reassess the property.

Customer: replied 7 months ago.
isn't their flexibility with respect to how codes are applied. For example, can't a bed be replaced with a desk in order to be subject to office codes vs. bedroom codes?
Expert:  Loren replied 7 months ago.

That will be addressed with the local building code inspector. There is probably room for negotiation, but it is best handled with your attorney and the building dept.

Customer: replied 7 months ago.
I tried to rate you so you could get credit and the system would not let me. I repeatedly get this error message on two different computers: "Sorry, your rating was not processed. Please refresh the page and try rating again. If the issue persists, contact Customer Care at 1-***-***-****." I contacted customer service and they are actually having the same issue. Please use this message to get credit for your answer. I rate you 5 stars.
Expert:  Loren replied 7 months ago.
Try again. Should go through.
Customer: replied 7 months ago.
Still the same error. Tried from my phone too.
Expert:  Loren replied 7 months ago.
Thanks for trying.