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