What does"unpermitted" mean for a home buyer?

[sputnut]

If something is listed as "unpermitted" does that mean I hafta pay permit fees or what?

comin' your way soon!

[Seeb]

Means your buying someone else's headache

[jlgerk]

it's code for, do you really need a loan or insurance ?

[terracore]

What we think we know: It means you're buying vacant land. It will never qualify for a mortgage, insurance, etc. The dwelling is just "stuff" on the land.

What we don't know: How is the county going to deal with unpermitted structures? Forced compliance? Fines? Nobody has had an answer within the last few decades, and it will probably be decades before we know.

[Kelena]

In my experience, if something is unpermitted that would normally affect the value of the property adversely but it would not, by any stretch, render a property worthless. Let's say for example that you have 2,000 square foot house in Kapoho with its own tidepool. The current owners have added a permanent cabana or pool house adjacent to the tidepool, but didn't get a permit for it. Ostensibly, the county could make the property owner deconstruct that. In reality, they rarely take such measures, to the consternation of some.

But you have a potential expense equal to whatever it takes to correct that issue, which will very much depend on the nature of the "improvement" and the extent to which it was done in a way that makes it permittable, as built.

Theoretically, this expense would be deducted from the value of the house as it would be if the improvement were permitted. Let's say the house is worth $300,000 with a permitted cabana. Correcting an unpermitted cabana will cost you $15,000. Actual value of the house then is $285,000. The market, however, may completely overrule that and may make no deduction for that potential problem.

Getting back to your question, I think the answer is you do NOT have to pay anything (certainly not during the sale) to account for the fact that there is an unpermitted change to the property. You might even consider deducting for it in your purchase price as it is theoretically possible you will have to correct it later on. But I defer to someone who works in the trade or with more experience with this to give you a more definitive answer. In the past, for example, the County has called "Ollie Ollie Oxen" and declared an amnesty of sorts on unpermitted improvements.

[punafish]

I'm not a lawyer, but pretty sure the County called "Ollie Ollie Ocean."

[Guest]

It means "stay away" if you ever want to build "legally".[]

[ericlp]

It really is a hard question to answer. Unpermitted could mean it got built without a permit (really bad) or a home that has a permit but never finished or past the final inspection. Could be really good or bad depending on what got inspected or where it is. So it's anyone's guess.

[LaurelJ]

i'll add to Eric's response. It will also mean anything non permitted will NOT be added to the estimate of value if you try to refi or sell the property in the future. In my case in Ca tho it was not to much of a hassle. Our property had two improvements when we purchased it, were told had permits (425 sf master bedroom with bath, and a closed in sunroom 225 sf, used to be a porch) the county says were unpermitted and hence when we tried to refinance the bank would NOT include these improvements in the homes value. Luckily we had copies of permits, contacted the county, sent them copies, value was adjusted, matter closed, after 30 years. So at least do some research to see if permits were ever pulled, in some cases as Eric says, there could actually be permits, that were just never finalized. Having said that, if NOT permitted for sure, it could then be a huge hassle to ever get the value of the structure included on any assessor's records and that should surely be taken into account when making any offers on a property.

[unknownjulie]

The only thing I would add is that you actually cant assume that a property is permitted. I looked at a house in HPP that looked ok, and the realtor did not disclose any info about permits on the listing, and it had a HELCO box right on the house, and was wired for cable tv etc. When I went down to the county tax window and got a printout, I saw that the taxes were only 250 dollars per year! Then I checked the conveyance office info in Oahu- to look at the deed- and everything pointed to that house as being totally and completely unpermitted and totally "off record". The house was still being listed as "vacant land". So, I called HELCO to ask about reestablishing service and they said there "was no problem". I also spoke directly to the listing agent who did not disclose anything either. Just be very very careful, and do your own research.