We’ve all seen them - the new bathroom added next door by your neighbor’s uncle, the finished basement with an extra kitchen and exterior entry (currently being “illegally” rented by a tenant), the finished attic completed over a few Saturdays and half a dozen trips to Home Depot. Home improvement projects are often on the minds of homeowners, as are ways to add value without great expense, but when should you consider having a project permitted, and why bother with the expense anyway?

 

A building permit is a written authorization from the city required to perform work on a property that impacts a home’s structure, footprint, or systems like electrical, gas or plumbing. Approvals are issued by the local agency or building department, and sometimes neighbor approval is required as well. With all of the documents, plans, applications and fees, there’s no question that permitted projects can be expensive and time-consuming.

 

Here are 5 important things to remember when it comes to permits in the East Bay.

 

1. Permits are valuable. They confirm work is done according to code and qualified tradespeople can stand behind the work. This protects the homeowner in the long run. When you consider the overall cost of a permit, you’re also paying for the building inspector’s time, administrative fees, the time it takes for your tradesperson or contractor to meet with the inspector, as well as liability insurance and the cost of the permit itself.
   
   
2. Be wary of taking shortcuts. It is said that one should never trust a contractor who says you don’t need a permit. For example, in the event of a fire or natural disaster, your homeowners insurance could potentially deny you compensation if you knowingly do work without a permit. Even if your contractor did the work to code, unless you have a permit showing that the work was inspected and authorized, there is no way to prove it. Is it really worth saving a few hundred dollars for such a potentially large liability? We’d never recommend it, especially when safety could be at risk.
   
   
3. When marketing a property for sale, you cannot market those additions as legal square footage without a permit. But plenty of people sell their homes with unpermitted work, right? Yes, this is true, and at Red Oak we always require the seller to disclose this ahead of time in detail to avoid possible litigation down the road.
   
   
4. The larger the project, the more permits affect value. Often smaller, un-permitted projects that are clearly disclosed to buyers do not impact the value of a property. However, when it comes to larger projects, safety may be an issue, and you can bet that buyers are going to want to see permits if permits were required. This is also an issue when sellers have put in an ADU unit. The value is in the ability to legally rent out that space, so it’s worth saving yourself the headache by having that ADU permitted from the start. If you are buying a property with a permitted ADU, be sure to check in with the city’s rental board before leasing it as each city has separate requirements.
   
   
5. Be aware of local regulations before making significant changes. Different cities often have very different requirements. Make sure you’re aware of what the longer term implications could be, not just the potential short-term property tax benefit you’ll see by not reporting any added space or new improvements. Working with reputable, licensed contractors and discussing permits upfront can help you avoid any potential consequences down the road.

Wondering how to take the next step? Contact us to find out how to avoid the pitfalls of unpermitted work, or how to remediate already unpermitted work in your home.