Would you buy a house if Former Owner finished the Basement?

[John M Wilson]

Here's the situation:

My daughter and son-in-law are in the process of buying a house (offer was accepted, closing hasn't happened yet). The house is everything that they are looking for, in a good neighborhood, etc.

The issue is that the current owner did a DIY construction where he finished off the basement. Problem is, he didn't pull a permit, so none of the normal codes inspections were done.

I haven't seen the work in person, but from pictures, it looks to be a pretty good job. Nothing looks unprofessional. Regular Home Inspection was done, and no major issues noted.

Assuming that everything that you can't see is up to code, what is the process to "get right" with the Authority Having Jurisdiction and get all the proper approvals and paperwork done? I assume that this is not the first time this has happened, is there a procedure in place that doesn't involve ripping out finished drywall and trim to see if the Romex was stapled properly?

Will this be an issue with their homeowners insurance? How about the tax assessor?

I don't want to be "that guy" and throw cold water on their plans for no reason, but I don't want to have them walk into a nightmare, either.

Any advice is welcome!

[Ken Combs]

All dependent on the AHJ. In my area there is no issue with a building inspector once the lender and pre-purchase inspection is done. Insuran.ce company may or may not do an inspection before issuing a policy. If they don't or do one and pass it there shouldn't be an issue. Our tax assessor does a periodic 'drive by' evaluation, I think every other year. That is the extent of the valuation policy. As I understand it, interior work is not considered in assessment, only things that change the foot print.

[Thomas McCurnin]

Did the owner add a bathroom?

Later, if they decide to do add a shower, update a service panel, or do something else that requires a permit, and the inspector notices an additional un-permitted bathroom that might be a problem. Depends on the city or county agency which issues permits, their policies and how the inspector feels that day.

It's a lot of "ifs" but me, I wouldn't lose any sleep on it.

[Andrew Seemann]

A lot will depend on the city/AHJ. One house we looked at when we moved a dozen years ago had a bunch of work done the "Home Handyman", an engineer that thought he knew everything about home renovation. Much of it was incorrect. I particularly liked how he had zip tied all the wires to the Bulldog Pushomatic breaker box into a long unsecured 8' rope across the garage trusses. There were also many other non-code compliant issues.

It was bad enough that I stopped by the city to ask what permits had been pulled, and found that he had pulled none. I had mentioned that the homeowner had done a bunch of non-permitted work and not all correctly. The city could not have cared less, and basically said it was my problem whether I wanted to buy the house or not; they had no concerns. I noted the issues to the homeowner and we put out a bid taking them into consideration. We ultimately did not buy the house as the owners also had an unrealistic idea of the property's value. In my case, I knew enough to spot the issues and had a plan laid out to fix them, but again, I would have been going in with full knowledge of the issues. It's hard to say. As for having it inspected, some home inspectors are really good, some not so much, the same with insurance inspectors.

For some other cities around here, I think they would have sent out a SWAT team for work done without a permit. Go figure.

[John M Wilson]

Did the owner add a bathroom?

The bathroom downstairs has definitely been re-done, I'm not sure what was there prior to the remodel.

Since the basement is on a slab, it's unlikely that this person dug up the floor to install the traps & etc for the toilet & shower drain.

I'll have my daughter ask...

[Bill Howatt]

I wonder what percentage of basement finishing is done strictly without permits or anything else?

[Sam Force]

I would venture to say probably over 75% of homes have some type of work performed without permits

[Pat Germain]

I live in Colorado. I lived at my previous house for over 20 years. I bought it when it was new construction. Most of the houses on my street have basements which were not finished by the builder. The builder installed insulation with no sheeting.

Over those years, I observed many of my neighbors finishing their basements. One of these neighbors was a contractor who finished basements for a living. And in those years, again and again, I saw a large dumpster dropped in the driveway right at the time my neighbors were putting their homes up for sale. Turned out none of their basement finish jobs met code. Even the job done by the contractor. They literally had to rip everything out down to the studs just to sell the house.

My neighbors across the street hired a professional to finish their basement. The first time it got really cold, they had pipes freeze and burst which flooded the basement. Much of that finishing job had to be ripped out as well.

My neighbors next door had their basement finished by a contractor who built out a bedroom and a full bath as an in-law suite. My neighbor's parents lived in the basement for years and they had no trouble. Now their son lives down there and he really likes it.

So, in summary, a properly-done basement finish job is great, but boy can things go wrong. I would try to find a very good inspector to check everything out before closing on that house. Likely, everything is just fine. But maybe not.

[Nicholas Lawrence]

Lots of variables, including the age of the house.

My basement was finished by the prior owner. No problems with insurance or taxes.

I have had inspectors in the house for electrical work and when the gas company replaced something in the basement, and nobody raised any issues.

[Lisa Starr]

When we sold a prior home, we had to request a copy of the permits pulled during our ownership and prove that each permit was either inspected or exempt from inspection. All of this had to be provided to the buyers.

[Dan Friedrichs]

Over those years, I observed many of my neighbors finishing their basements. One of these neighbors was a contractor who finished basements for a living. And in those years, again and again, I saw a large dumpster dropped in the driveway right at the time my neighbors were putting their homes up for sale. Turned out none of their basement finish jobs met code. Even the job done by the contractor. They literally had to rip everything out down to the studs just to sell the house.

Respectfully, this sounds a bit dubious...

Who "required" this?

I sold a house in CO, recently, and beyond a line on the seller's disclosure form that said something like, "To the best of your knowledge, were permits obtained for any work that may have required them?" (which seemed to be worded in a way that intentionally provided plausible deniability...), no one asked or checked on any permits/renovations/etc.

You think the city is sending out an inspector on every home sale? Huh?

[Bill Dufour]

My city requires a permit to install a automatic sprinkler system. This has been code for twenty years or more. No permit for a sprinkler system has ever been pulled.
Bill D

[Stan Calow]

Around here, I am suspicious of finished basement walls covering up foundation cracks or water intrusion.

[mike stenson]

Respectfully, this sounds a bit dubious...

Who "required" this?

I sold a house in CO, recently, and beyond a line on the seller's disclosure form that said something like, "To the best of your knowledge, were permits obtained for any work that may have required them?" (which seemed to be worded in a way that intentionally provided plausible deniability...), no one asked or checked on any permits/renovations/etc.

You think the city is sending out an inspector on every home sale? Huh?

I pulled the permit history for every house I've bought. It's free, and easy. I would imagine that others do too.

[Dan Friedrichs]

I pulled the permit history for every house I've bought. It's free, and easy. I would imagine that others do too.

So in the case of a finished basement, how do you know it wasn't finished by the original builder?