Unpermitted Construction – Should You Care And Why?

It is not uncommon for buyers of real estate to come across a property that has unpermitted construction.  The unpermitted work can be something as minor as a bathroom remodel, to as major as an entirely new addition to a home.  In this article we discuss the implications of purchasing a home with unpermitted construction.

When And For What Is A Permit Required?

According to the Los Angeles Department of Building and Safety (LADBS), a permit is required “for any private property construction, alteration, or repair work on buildings within the City of Los Angeles.”  In other words, it is required for any work on private property, regardless of how minor or major.  The permitting process requires that before any construction, repair, or alteration is made to a property, plans must be submitted to and approved by the LADBS.  It further requires that after construction, repair, or alteration is commenced, the work must be inspected and approved by the LADBS.

The mission of the LADBS is to “protect the lives and safety of the residents and visitors of the City of Los Angeles and enhance the quality of life, housing, economic prosperity, and job creation citywide”.  The permitting process is designed to achieve that goal.  While many homeowners view the permitting process as a hassle, it is important to realize that the process exists as a way to protect consumers from faulty construction and/or contractors who might attempt to take advantage of unsuspecting consumers with below-standard work.  By requiring that plans and construction be approved, the city ensures that consumers have the ability to have their contractor’s work reviewed and approved for safety.

The Implications Of Unpermitted Construction

At the outset, it should be noted that unpermitted work, as its name implies, has not gone through the permitting process, and therefore has not been reviewed and approved for safety.  Accordingly, the most important implication of unpermitted work is that it may be unsafe, depending on the quality of the work of whoever conducted the repair, construction, or alteration.

Another implication of unpermitted work is that, if the city discovers that construction, repairs, or alterations have been made without a permit, it may decide to issue a violation.  In addition to fines, a violation may involve a requirement that the work be reviewed and approved by a city inspector.  Depending on the extent of the unpermitted work, this could potentially result in a significant amount of additional work, particularly if electrical and/or plumbing inspections need to be conducted, which would require re-opening walls to allow for a full inspection.  If the work does not pass inspection, this could result in further corrective action as minor as repairs, or as major as completely tearing down unpermitted additions.

Moreover, homeowner’s insurance policies typically do not cover unpermitted improvements.  This potentially means two things.  First, any injuries arising from the unpermitted work may not be covered.  For example, if unpermitted construction causes an electrical fire at a home, resulting in injuries to guests and/or neighbors, the owner’s insurance policy may not provide coverage for those injuries.  Second, insurance policies may not provide coverage to repair or replace unpermitted work.  For example, if a home consists of 4 bedrooms in 2,000 square feet, but one of the bedrooms is an unpermitted addition of 500 square feet on the home, and the home is destroyed as a result of a fire, the insurance policy may only provide replacement coverage for a 3 bedroom, 1,500 square foot home.

Is It Ok To Purchase Property With Unpermitted Construction?

Ultimately, the most important thing for any property buyer is to make an informed decision.  It is important to understand the implications of unpermitted construction, as discussed above.  It’s possible that some of the work can be addressed and remedied relatively cheapily and quickly, while other work may be impossible to fix without completely demolishing a structure.  When considering a property with unpermitted construction, it is certainly advisable to, at a minimum, consult with a licensed contractor to determine what, if anything, can be done to obtain valid permits for the work, and ensure that the structure is safe to occupy.

For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.