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Location is Hillsboro, OR (suburb W of Portland).

I'm considering purchasing a house that had significant remodeling done a few years ago (kitchen and bathrooms incl. plumbing).

If the previous owner (the one who haid the remodel done) didn't get permits for the work, is it a potential liability to me?

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It might be worth your while to ask a lawyer, rather than a bunch of hosers on the internet. – Tester101 Mar 5 at 20:17
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Hey, not all of us are Canadian! Well, ok. I have imbibed in the Tim Horton's, but have not tasted the Poutine. Nous tous ne sont pas au Canada! Vrai, je suis imbibée dans le Tim Horton, mais ne l'ai pas goûté la poutine. – Harper Mar 5 at 21:36
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You should just get it inspected and have any deficiencies corrected before you buy it or you accept the deficiencies as is. – ArchonOSX Mar 6 at 12:33
    
Do you know the work was unpermitted or are you wondering if you need to verify the permit status? – Reid Mar 12 at 20:52

Sorry, I am going to have to disagree with some of the above posters. It all comes down to the interpretation of due diligence.

Hypothetically, if you bought the place and know that work was done without permits, you have actually created your own problem, now, by advertising the fact that you know about the negligent work. If you now rent it and there is a problem, you could be civilly liable (you could be liable for replacing a tenants possessions if there is a flood from a faulty pipe) or criminally liable (a faulty wire burns down the house and kills someone). I can tell you of at least 7 instances of people we have done work for that their insurance didn't cover their repairs after problems. It is usually when they have work done without permits and it creates a flood or a fire, but the legal logic is the same.

The very fact you know about it implies you have a moral obligation to repair the faults you know of prior to acting as a landlord. The fact that you just put it out on the internet makes it vital. As unlikely as it seems that a future possible catastrophe could be linked back to this post and you (your profile says Jim Garrison of Austin, TX - there are only 19 people with your name in Austin - see how easy it would be?), do you really want to take that risk?

You would be wisest to have the work inspected by a competent whoever (don't know the work done) and inform your insurance company of it in writing. Also talk to the town and get an inspection by the town done. If you can pull a permit and have them check it, you will be pretty safe. Just get them to put it in writing that it passes. Do not accept a private home inspectors report as anything. They simply don't hold up in court, and I have seen that in multiple instances.

Good luck.

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You can pull a homeowner permit for fairly cheap ($70 in CO) and that'll get a city inspector to come and check things out. You won't be held liable for the work done, but will be excepted to bring it up to code - which you want to do anyway, since codes are there for a reason. This applies especially to electrical and plumbing, trust me here! This should expose any poor quality work done and give you a chance to fix it up to code so that, liable or not, your house doesn't burn down from shoddy electrical work or the like. That's generally a better idea than just covering your butt, assuming you actually value the property and aren't aware of some major defect and just waiting for it to burn down and collect insurance money on it. :P

Honestly, if the latter, somewhat ridiculous case was your situation... the way I understand it (just bought a home with LOTS of bad previous work that was NOT up to code) you won't be charged/fined/etc. for the bad work having been done previously, but there MAY be legal requirements compelling you to update/maintain a property you own up to applicable codes, save for parts that at least were up to code before codes changed and were grandfathered in. So you wouldn't be responsible for the bad work, but MAY be responsible for it being done correctly under your ownership. If that's helpful at all?

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Probably not. What is the town going to do? Issue a stop work order? LOL

How would they even find out?

The bottom line here is whether the house has a dangerous condition in it, especially something that could cause a fire. From a legal standpoint, that is the main area of risk. If you have a fire hazard, it really doesn't matter whether it was "permitted" or not, they will go after you. If the house inspector is reliable (that's a big IF), then he should have flagged any potential fire hazard that a building inspector would flag.

So, what you should really care about is whether the house conforms to code or not. Permitting does not really matter. It is much better to have an unpermitted house that conforms to code, than a permitted house that has code violations, especially fire code violations.

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In my jurisdiction their ultimate 'nuke' is to make you tear out the additions, from there, they negotiate. I saw them use that nuke on an illegal garage conversion (government intervened after their dumb tenant threatened to tow people who blocked the "driveway"; code requires the driveway and curb cut be removed) and a 2-unit Victorian where the seller was forced to undo partitioning into 4 units, as he couldn't prove it'd been a 4-unit prior to 1977 when some law passed. – Harper Mar 5 at 21:55
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Somehow I don't envision town inspectors getting a court order to destroy the OP's kitchen. – Tyler Durden Mar 5 at 22:00
    
In our jurisdiction, they merely issue a cease and desist order and deny occupancy for the unpermitted work. You then need a permit for demo. Makes for some pretty ugly failed addition remains. They don't demand you tear it down, so it gets left as an example to everyone as to what happens if you don't get a permit. LOL – Fiasco Labs Mar 6 at 3:07
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Cease and desist what? A residential house does not require an "occupancy permit" unless it is a new construction. – Tyler Durden Mar 6 at 3:18
    
Some jurisdictions do. I've heard of people moving from urban CA to rural TX, going to pull permits for a school building and being shocked that they didn't need any. – Harper Mar 6 at 20:02

No. In many jurisdictions the homeowner or property owner can do almost any work to the existing structure without permits, including asbestos removal. They may have to get a permit for a dumpster, but that's it. If your Home Inspector doesn't find anything, then you absolutely don't have a case for suing anyone.

Any liability to a renter would only come back to you for exposed hazards & dismissed complaints. Like, fumes, mold, unsanitary conditions that are your responsibility, holes in the yards, etc.

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Cum Grano Salis... Contact your local planning department before assuming you can do almost any work to the existing structure without permits and especially if you are a landlord renting the structure. Restrictions have tightened up a bit here in Oregon. Unless you are out in the county and don't anger your neighbors. – Fiasco Labs Mar 6 at 3:09
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Are you talking about jurisdictions in your area, or jurisdictions in Oregon where the OP is? – Tester101 Mar 6 at 3:10
    
My warning is talking about any State's Counties & Townships or especially Boroughs. No State is the same across its board, not even CA. I live in a very similar area as Hillsboro, OR & none of the Townships in my Quad-State area requires permits for a Property or Home Owner for "existing" building work. Mine actually tells you straight up there's no Permit needed nor offered, even for removing asbestos shingles. ALL buildings are Buyer Beware & AS-Is sales, hence the very strong suggestion & Contractual decision & contingency to get an Inspection by ALL Real Estate Firms. – Iggy Mar 6 at 11:57

My concern is that if something went wrong (e.g. a house fire) the insurance company might refuse liability, if they found that the house was non-compliant. Then you might find yourself faced with not only the loss of your own home, but possibly millions in damages to third parties. Suggest an inspection and getting it signed off.

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It depends on what you mean by "liability"

I presume by the context your question that you mean "could I be responsible for obtaining permits for the work completed?" In that case the answer is no. Whoever did the work was responsible for obtaining permits.

If you meant "could I be potentially legally responsible for possible damage done by faulty work? (i.e. poorly done roof, electrical, or plumbing?)" In that case the answer is maybe. There's some release of liability in the fact that they disclosed that the work was not permitted, but you bought it anyway, but that doesn't exonerate them from negligence. The fine line there is usually drawn by lawyers and insurance companies.

If you meant "is it a negative impact on the value of the home that I am assuming?" The answer is obviously yes. When you sell the home you'll have to disclose the unpermitted work as well, which hurts the value. The bright side for you as a buyer is that it can be used as a negotiating tool. Depending on the county and the individual inspector(s) you get, you may be able to permit unpermitted work permitted, but there's risk involved. If the work done was not to code, it will have to be brought to code to be permitted. Even if it was done to code, you may have to hire a contractor to give inspectors access to places like inside the walls, or hire an engineer to inspect and sign off on the improvements. For those reasons it's usually not worth getting old work permitted that wasn't initially permitted.

My advice would be to seek credentials from the seller for the work that was done, or get a professional home inspection. If the improvements were made by a reputable contractor that avoided the additional costs of permits, it's probably worth the investment, and you can include those credentials in your disclosure of you ever sell the house. (i.e. such and such was unpermitted, but done by licensed contractor this and that)... or, (i.e. such and such is unpermitted, but this and that inspected the work and said it looks good). Those options are the next best things to permitted work when reselling your house, and don't cost an arm and a leg. Plus, they give you peace of mind that your house won't burn down in your sleep because of faulty work... which is why they mitigate some of the loss of value of doing work without permits.

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