Home renovations have a way of starting innocently.
“We’re just opening up this wall.”
“We’re finishing the bonus room.”
“We’re adding a little bathroom.”
And somewhere along the way, “little project” can turn into work that required a permit. That may not feel terribly important while you’re choosing tile. It can feel considerably more important several years later when you decide to sell the house and someone asks:
“Was this permitted?”
When Do You Usually Need a Permit?
Permit requirements vary by city and county, so homeowners should always check with their local inspections department before beginning work. In North Carolina, however, permits are generally associated with projects that involve structural changes or significant electrical, plumbing, HVAC, or other regulated work. Current state law also contains a permit exemption for certain work costing $40,000 or less, but that exemption does not apply to several types of work, including changes involving load-bearing structures or certain plumbing, HVAC and electrical work.
In Raleigh, for example, projects such as additions, decks, screened porches, balconies and sunrooms require permits, and other approvals may be needed depending on the property.
In other words:
Painting your dining room? Probably not a permitting event.
Removing a load-bearing wall because HGTV made it look easy? Time to make a phone call.
What About Kitchens and Bathrooms?
This is where homeowners sometimes get confused. Changing cabinet hardware or replacing finishes is very different from relocating plumbing, adding electrical circuits or changing the structure of the room. You can renovate a kitchen without automatically turning the project into a permitting extravaganza—but once the renovation starts involving plumbing, electrical, HVAC or structural changes, permits may come into play.
The safest rule is simple:
Ask before the work starts, not after the drywall goes back up.
But What If the Work Was Done Years Ago Without a Permit?
Now things get interesting. Maybe you finished a basement. Maybe a previous owner enclosed a porch. Maybe there is a gorgeous bonus room upstairs and everyone has simply agreed not to ask too many questions about how it got there. Unpermitted work does not automatically mean the home cannot be sold.
It does mean it needs to be handled correctly.
In North Carolina, real estate brokers have a duty to investigate and disclose material facts involving required permits and unpermitted improvements. That becomes particularly important when the unpermitted area is being marketed as finished living space. The North Carolina Real Estate Commission has specifically addressed situations where unpermitted space was included in advertised square footage. Its guidance is that the unpermitted portion should be identified separately and clearly disclosed rather than simply rolled into the home's reported living area.
So the strategy cannot be:
“Maybe nobody will notice.”
Someone frequently notices - the buyer, the inspector, the appraiser, the lender or the closing attorney.
Or, apparently, whichever person has the unfortunate job of asking why the tax records show 2,100 square feet while the listing suddenly has 2,800 - that's usually your agent!
Can You Fix an Unpermitted Project Before Selling?
Sometimes. Depending on the work and the local jurisdiction, an owner may be able to contact the appropriate inspections department and determine whether the work can be permitted after the fact. That may involve documentation, inspections, opening walls or ceilings so work can be examined, correcting items that do not meet code, or obtaining additional professional evaluations.
And sometimes the answer is more complicated.
That is exactly why it is better to investigate before the house hits the market rather than discovering the problem three days into a buyer's due diligence period.
Buyers Should Pay Attention Too
If you are buying a home with a finished basement, converted garage, addition, enclosed porch or other significant renovation, it is reasonable to ask questions.
- When was the work done?
- Were permits required?
- Were permits obtained?
- Does the advertised square footage match the permitted living area?
Unpermitted does not automatically mean unsafe. Permitted does not automatically mean perfect. But knowing what you are purchasing is part of doing good due diligence.
The Bottom Line
Permits are not exactly the glamorous side of home renovation. Nobody has ever created a Pinterest board called “Dream Building Inspection Department.” But permits can matter when it comes to safety, future renovations, insurance, financing and eventually selling the property. So if you are planning a major project, check the requirements before you start.
And if you are getting ready to sell and suddenly realize that beautiful addition may have been built under the highly respected “my cousin knew a guy” permitting program, figure it out before the For Sale sign goes in the yard.
A little research now can prevent a much less entertaining conversation later.
