Home buyer wasn’t told of unpermitted remodel; is there recourse?

Question: The home I just bought has a workshop that was converted to a studio apartment, but no one told me that the conversion was not permitted. Now the city wants me to convert it back. I used all my money to buy the property and can’t afford the construction costs. No one disclosed this to me: not my home inspector, the agent, the appraiser or the seller. Do I have any recourse?

Answer: Let’s run through the list:

The home inspector, if he was sharp and experienced, should have advised you to consult the building department to verify permits for the conversion. Many home inspectors routinely recommend permit searches to all of their customers, whether or not the property has been altered. But there is no requirement for home inspectors to do so.

The same holds true for real estate agents. If they are competent and professional, they will advise their clients to check the permit history of the property in escrow. In fact, some agents take the time to do the permit inquiry for their clients. But this is not required for real estate agents.

Appraisers are generally concerned with the legality of additions and other alterations, because this directly affects the appraisal value of the property. It would be unusual for a competent appraiser to overlook this aspect of a property.

The sellers were required to disclose all conditions that would be of concern to a buyer. If they were aware that the conversion was done without a permit, especially if they did the conversion themselves, then they should have disclosed it.

As for recourse, you’ll need to consult a real estate attorney to determine what remedies are available to you under law.

— Barry Stone, Access Media Group

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