This is a particularly difficult situation in Chicago, where many small contractors try to avoid applying for building permits because the city makes it such a hassle. Homeowners are often complicit in these situations. The owners know that city inspectors come out to view the completed work and the owners run the risk that the inspector can cite the owner for any of many things in the home. That could put the owner at risk for upgrades that cost in the tens of thousands of dollars.
How do I go about making intelligent judgments on buying a home here?
A: Picking the right home is tough — and you don’t want to inadvertently walk into a deal where the home seems right except for the pile of projects without permits. So let’s talk about how to determine whether the construction of the home is up to par.
The most obvious way to tell whether a home has quality or construction issues is to use a qualified professional home inspector to inspect the property before you close.
The home inspector will go through the home carefully looking for construction issues, both visible and invisible, as well as any other problems that could give you a headache in the future. The tools for this inspection may include moisture meters, infrared cameras and other devices that can help uncover hidden defects. All of these will give you a better understanding of the condition of the home and help you decide whether to move forward with the purchase.
However, you bring up a great point. Most municipalities have records of improvements that homeowners make to their homes. And, as you rightly mentioned, many homeowners make these improvements without required governmental permits. So you have to determine whether the work was done safely and correctly.
For your information, in many areas, you can pull a permit simply by paying a fee and the municipality might never come out to see if the work was done correctly. There’s no guarantee of workmanship associated with permitting, and that alone shouldn’t give you comfort.
Here’s how it might play out. Let’s say you buy a home with substantial improvements. The seller might have pulled a building permit, and the municipality may have performed the usual inspections. However, these inspections never guarantee the home was built correctly or that the improvements were done well. It means only that the municipality inspected the home at certain stages and the municipal inspector did not see any problems with the process. There’s a difference between the municipal inspector saying only that they didn’t see anything that violated the municipal code and ordinances vs. saying the construction was done correctly.
That’s why you have your own inspector do a professional home inspection, even on a brand-new house.
So how should you view a seller who didn’t pay to pull the appropriate permits? Probably as someone who didn’t want to spend the time or money to get them. Or maybe as someone who didn’t want the local property taxing authority to know about any improvements that could cause property taxes to go up.
The other thing to think through is how significant was the work that was completed? We know someone who, over weekends, replaced all the PVC plumbing on the first floor of their house with copper and never pulled a permit for the work. It has been years, and they’ve never had a leak, so he probably did a good (enough) job. But are most homeowners qualified to do that level of construction work well?
Changing a toilet is one thing. Replacing an entire air conditioning system or adding on an addition without pulling the required permits is another. Some municipalities require homeowners to pay for a permit for just about everything you might do to a home, other than painting and changing lightbulbs, while others only require permits and fees for major improvements and renovations.
If you find out that a seller didn’t pull all of the required permits, you’ll have to evaluate whether that means some were pulled — or none. In many parts of the country, you can look on the website for the local municipal office that handles permitting in your town or city and find out whether any permits were pulled for a specific property. If it isn’t online, you can frequently get it by going to the municipality’s building department and requesting the information.
Once you get this information, have your own professional home inspector take a thorough look at the property to determine where things stand. If there are lingering questions, ask a contractor to come through and give you their opinion of the work, and what might need to be done to correct any problems going forward.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.
Read more in Real Estate: