Unpermitted work is among the most common problems surfacing in Washington property transactions, and a substantial share of it was done by someone other than the person now selling.
How it comes to light
Usually through a buyer’s inspection combined with a permit history search. An inspector notices a finished basement, a converted garage, an addition or a deck. A search of permit records shows nothing corresponding. The gap prompts a question, and the question arrives at the least convenient moment.
Appraisers may also notice, particularly where unpermitted square footage is included in the marketed size of the property.
Why the timing hurts
By the time this surfaces, both parties are committed. There is a closing date, financing arranged, and usually another transaction depending on this one. The seller has very little leverage and considerable time pressure, which is precisely the situation in which people accept expensive resolutions.
The same issue addressed eighteen months earlier, with no deadline, would have cost a fraction as much and involved far less stress.
The usual options
Retrospective permitting. Applying for a permit after the fact. Feasible in many cases, but the work must be shown to comply — which can mean opening up finished surfaces so an inspector can see what is behind them. On a finished basement, that is genuinely disruptive.
Price adjustment. Reducing the price to reflect the issue and letting the buyer take it on. Common, quick, and usually costs the seller more than resolving it would have.
Removal. Where the work cannot be brought into compliance, undoing it. The worst outcome, and occasionally the only one available.
Proceeding with disclosure. Some buyers will accept the position with full knowledge, particularly where the work is sound. This depends on the buyer, on financing, and on the nature of the work.
Disclosure obligations
Washington sellers have disclosure obligations regarding known property conditions. Concealing known unpermitted work is a poor idea both practically — buyers’ inspectors are looking for it — and in terms of the exposure it creates after closing.
If you know about unpermitted work, get advice on your disclosure position rather than hoping it goes unnoticed.
What to do if you are not selling yet
This is the useful part. If you know or suspect there is unpermitted work on your property, addressing it while you have time is dramatically cheaper than addressing it under a closing deadline.
Order a permit history for your property from the relevant jurisdiction and compare it against what physically exists. Where there are gaps, get advice on the options while there is no pressure. Some situations resolve straightforwardly with retrospective permitting; the ones that do not are better known about years in advance.
And when buying
Ask for permit history as a matter of course, and compare it against what you can see. Discovering the issue before you are committed puts you in the strong position rather than the weak one.