If you own a home or a condominium, chances are you're a scofflaw.
One of the most common violations of the law is failing to obtain building permits that are required for almost any alteration to your property. Most people don't realize they're breaking the law until it comes time to sell their residence--and even then it may go unnoticed.
However, buyers, along with inspectors, real estate agents, lenders and lawyers, are becoming more concerned about any alterations made to a home without a permit. And what seemed like nothing more than a Sunday afternoon improvement project a few years ago may become a deal breaker when a home is on the market.
California's Uniform Building Code--the basis for most local building codes--requires a permit to erect, repair, alter, enlarge, move, improve, remove, convert or demolish almost any part of a building structure. This includes not only room additions but also changing windows, moving electrical outlets, relocating plumbing or gas pipes, re-roofing, re-stuccoing, adding new drywall, moving a doorway, or maybe even replacing a toilet or a sink.
In the city of Los Angeles, basically any structural work worth more than $200 requires a permit, said Richard E. Holguin, an assistant chief at the Department of Building and Safety.
"A majority of people are violating the law, but we don't go after them," he said. "We don't have the manpower to be hassling people." In Ventura County any structural work requires a permit--there is no dollar minimum, say local officials.
Homeowners who don't get all the proper building permits are "fools," warned Gene Prowizor, president of A Aa Building Inspection Service Inc. in Culver City. While real estate brokers talk about alterations made according to code but without a permit, Prowizor said "that's a legal impossibility." Besides, building codes are constantly changing. A project completed 10 years ago with a permit is "grandfathered." But if the same project had been completed without a permit, it would need to be brought up to requirements of the current code.
Lenders are also asking their appraisers to be particularly wary of any changes made without a permit, because federal regulators are increasingly scrutinizing residential loans. Lenders have deep pockets, making them an attractive target for litigants and their attorneys.
"We don't want to give a loan based on value that may not be there," said Carolyn Philmon, senior vice president at the Granada Hills offices of Coast Federal Bank. The lack of certain building permits can usually be remedied, Philmon said, but "things are not as casual as they were 20 years ago."
Yet another downside to having work done without a permit, Prowizor said, is "many buyers use the inspection reports as legal blackmail." After making an offer and having it accepted, many prospective borrowers have the house inspected and present a list of building permit violations to the seller in hopes of extracting all sorts of concessions.
With an oversupply of homes on the market, buyers are often flexing their muscles and being very picky about details. Many sellers are also more apt to give in on certain repairs and price concessions before letting a potential sale slip away.
Building permits in Ventura County cost a minimum of $35 each, said Ventura County building official William E. Windroth. All the necessary permits for a new kitchen usually run about $50 to $100. Permits for a room addition cost anywhere from $80 to $600, he said.
"Almost anything structural needs a permit," Windroth said. All building permits in Ventura are accompanied by at least one on-site inspection, he reported, and some projects require two or more inspections. New windows are supposed to be inspected after they've been installed but before the finishing work is done. Electrical work is inspected after the wiring is complete but before the wires are energized.
Copies of the permits for completed construction activity are then sent to the local tax assessor, who determines how much value has been added to the property. The homeowner has to pay not only for the work, but also for the permit and the additional taxes due every year because of the home's higher assessed value. A $2,000 patio addition may, however, only add about $400 to a home's assessed value.
Property owners who fail to obtain a permit may one day face a building inspector knocking on their door and asking to inspect some aspect of their property.
Inspectors who come to check something out for a building permit are, however, authorized by the permit application to inspect the property. These inspections will usually be limited to the scope of the permit, Windroth said. "It's not a fishing expedition."
The owner has a right to refuse the inspector's request and the inspector's only recourse is to get a warrant. Very few inspectors will bother going through the process of getting such a warrant, Windroth conceded.
Los Angeles has tried to simplify the process for certain projects by certifying some contractors to do certain projects without a permit. The contractor does have to send Building and Safety a list of work completed.
As for surprise inspections, Holguin said, they're pretty rare. Each L.A. inspector covers a 13-square-mile territory. They become familiar with their area, and they will drop in on major construction sites where the owner has not applied for a permit.
Owners who want to apply for a permit can do so in downtown Los Angeles, Reseda or Van Nuys. Buyers who want to research a piece of property to make sure all the necessary permits are in place can do so downtown or in Van Nuys.
Realtors are required to check on building permits when it comes time to sell a home. Those owners and their agents who fail to disclose that certain work was done without a permit can get sued by the buyer, said Lorrie Griffey, an agent at Pinnacle Estate Properties Inc. in Northridge.
The problem is that "most homeowners have no idea that almost every building project requires a permit," Griffey said. Sellers can best protect themselves by making a comprehensive list of all the changes they've made to a home and then giving that list to a prospective buyer.