What happens if you buy a house with unpermitted work?
Updated October 6, 2026 · 5 min read
The problem becomes yours. Building departments enforce against the current owner, whoever did the work. If the city finds out, you may have to get a permit after the fact, open walls for inspection, correct the work or remove it. It can also affect the appraisal, an insurance claim and what you must disclose when you sell.
What you take on
- Enforcement follows the property. A violation notice goes to the owner on record. That the previous owner did the work is not a defense, though it may give you a claim against the seller.
- The cost of making it legal: permit fees, usually a penalty, drawings, and whatever corrections the inspector requires.
- The safety question. Nobody independent checked the wiring, the gas line or the structure.
- The appraisal. Fannie Mae requires an appraiser who identifies an addition without the required permit to comment on the quality of the work and its effect on market value.
- Disclosure when you sell. Once you know about it, most states expect you to tell the next buyer.
How cities usually find out
- A later permit. An inspector visiting for a new water heater notices the basement apartment.
- A complaint, most often from a neighbor.
- A sale, in the places that require a municipal inspection or certificate before a house changes hands.
- A fire or other insurance claim that brings investigators into the house.
If you have not closed yet
- 1Get the permit history for the address and compare it with the house.
- 2Ask the seller in writing which improvements were permitted and for the final inspection paperwork.
- 3Have a licensed contractor estimate the cost of legalizing the work, including opening and closing finished walls.
- 4Negotiate. The usual outcomes are that the seller legalizes it before closing, the price comes down, money is held in escrow, or you walk away under your inspection contingency.
- 5Ask a real estate attorney before you waive anything.
If you already own it
- 1Have a licensed contractor, architect or engineer look at the work and tell you what is likely to fail inspection.
- 2Ask the building department how it handles existing work done without a permit. Many have a set process.
- 3Apply for a permit covering the work as it exists, then complete the inspections and corrections.
- 4Read the seller's disclosure. If the seller knew and said nothing, ask an attorney whether you have a claim. Time limits apply.
Common questions
Can the city make me tear it out?
Yes, when the work cannot be made to comply, for example an addition built over a setback line or an extra unit the zoning does not allow. More often the department requires a permit and corrections rather than removal.
Can I sue the seller?
Possibly, if the seller knew about the work and did not disclose it where the law required. It depends on your state, your contract and what you can prove. Ask a real estate attorney.
Does unpermitted work become legal after enough years?
Generally no. Age does not turn unpermitted work into permitted work. Some cities run amnesty or simplified programs for older work, so ask the local department.
Read next
Sources
This guide is general information, not legal advice. Permit rules vary by city and state. Confirm anything that affects a purchase with the local building department or a real estate attorney.