I am concerned about what I need to disclose regarding improvements I’ve done on the property. Could there be a problem when I list the property for sale?
Improvements and/or modifications made to a property, such as electrical, plumbing, or structural work, usually require a permit. Permitting laws can vary by location of the property. Construction work that might require a permit in one area may not need a permit in some other location.
If the improvements you made to the property were unpermitted, you may have a valid concern. While it may be tempting to not bring up the issue once you have decided to sell, there are legal issues involved in seller disclosures in a real estate sale.
In most states a seller is legally obligated to notify a buyer in a written document completed by the seller of various issues that may be a material factor in the buyer’s decision to buy the property and the price the buyer may be willing to pay. A seller must disclose material facts about the property, i.e., specific issues with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people. A seller must not only disclose the known material facts but also cannot conceal any defects from a buyer. If a seller fails to disclose known material facts the buyer can hold the seller liable for nondisclosure, negligence, intentional harm, or fraud.
A potential buyer may or may not be willing to assume the risk of unpermitted work done to the property. Your options may be to try to obtain a retroactive permit for construction already completed, remove the unpermitted construction, list the property “as is”, or consider listing the property at a discounted price. If there are particular issues of concern regarding property conditions or completed work, you may need to consult with an attorney. Listing property “as is” may not protect the seller if relevant “material facts” are not are provided to the buyer in writing.