Real Estate: Did you get a permit for that?

By Nicole Foster, Broker/REALTOR

Maine has some of the oldest housing stock in our nation, often predating building codes, land use ordinances or zoning requirements. More often than not, these older homes have changed ownership a number of times over the years and had modifications along the way. As real estate professionals, we witness daily how building trends from bygone eras have either endured the test of time or fallen short, presenting a spectrum of outcomes.

If given the choice, would you prefer to purchase a home that was constructed in the 1920s or one which was built in the 1970s? Consulting with a local REALTOR can help to shed light on the market inventory and its unique features and distinctions.

One of the first tasks that the listing or buying broker will undertake will be to check and see what information may be found in the file for the property at the Code Enforcement department of your municipality. This is a free, public record and anyone is welcome to view the contents and ask any questions that they have.

Homeowners must apply for and receive a permit for any changes or improvements beyond minor upgrades prior to beginning the work to the inside or outside of their home. Regardless of whether the work is completed by a contractor who has been hired by the homeowner or the homeowner does the work themselves, most alterations beyond a new faucet, change in flooring or new paint will necessitate a permit from the municipality. Larger projects or renovations will likely require more than one permit to be obtained.

Each town or city has its own requirements for inspections and fee structure when applying for permits. The permitting process is intended to help safeguard buildings to make them safer for the current and future occupants. Having the required permits for the improvements that you do ensures that the work complies with the current local standards for energy and safety.

A lender could deny a borrower the loan to purchase the home, or an insurance company can reject a claim due to unpermitted work. Properties with all the necessary permits for upgrades appeal more to buyers and achieve higher valuations compared to those with unpermitted improvements.

Reasons homeowners may forego obtaining permits vary, and many view the process of obtaining them as tedious. Some wish to avoid any increased property taxes by keeping improvements undisclosed to the Tax Assessor. Others fear that permit requirements may impose unwanted scrutiny or will reveal other potential violations during inspections. Additionally, homeowners may hesitate due to the expense of the permit fees, or they simply may be unaware of the requirements and standards.

When selling a home, the owner must disclose any improvements which have been done to the property, both during their ownership and all previous ownership (yes all the way back to the beginning of time). A failure to do so can lead to legal liability down the road after the closing. When unpermitted upgrades and alterations are disclosed to buyers the new owners have accepted the responsibility, shifting liability from the seller to the buyers.

Owners may choose to or could be asked to obtain retroactive permits for already completed work.

Identifying unpermitted work can be straightforward at times by comparing visual inspection to what is in the code file, but it can also be extremely challenging to know where work was done that permits were not obtained for, intentionally or unintentionally. Consulting with a seasoned building inspector or trusted contractors can help to identify any areas of concern, though visual inspection alone may not always reveal permitting noncompliance.

It's important to confirm that the contractors you hire will handle the required permits on your behalf. You will want to verify this directly with Code Enforcement by checking in the municipal code enforcement files for your property yourself, as ultimately, the homeowner holds the responsibility

This is an entirely common and relatively normal occurrence, and I have encountered a costly oversight where a high-end contracting company failed to secure the necessary permits from the municipality for a kitchen remodel, unbeknownst to the seller until the property was going to be listed. Similarly, an insurance claim following a fire was denied due to an electrical issue stemming from work performed without permits.

Upgrades and improvements are an excellent way to support a higher value for your property, don’t sell yourself at a discount by skipping the bureaucratic procedures involved.

Nicole Foster is a real estate broker with Locations Real Estate with 19 years of experience and a Windham parent who loves people and real estate. Follow Nicole on Instagram @207nicolefoster or on Facebook at facebook.com/sellingmaine. <