Remodeling: With or Without a Permit?

Although some homes here were built in the late 1800s and early 1900’s, the Santa Cruz County Building Department didn’t begin keeping track of permits until the mid 1950’s. Then, there was a flood in the 1980’s that damaged countless paper records. As a result, a perfect permit paper trail is really rare!

Why would someone build without a permit? Some property owners may not want their improvements to result in increased taxes. Also, there is a common perception that it is difficult and expensive to obtain proper permits. As a result, many homeowners within the county jurisdiction have been expanded, repaired or remodeled their homes without obtaining permits.

Some properties in Santa Cruz County are pretty remote…I’ve come across entire homes built without benefit of permit. This is naturally less likely within the city limits of say, Scotts Valley, Santa Cruz, Capitola or Watsonville. Still, there are plenty of unpermitted city property improvements, too.

Obtaining a permit is designed to ensure all the work is done to meet codes and safety standards. Sometimes obtaining permits can get expensive, for example when there are soils, geological studies and or engineering requirements. Yet, there’s plenty of risk when doing work without a permit: the work may look completed but might conceal shortcuts that risk the safety or integrity of the structure. Legally, when selling, the homeowner must disclose any work done without benefit of permit. And, the County or City can discover unpermitted work. All these potentially reduce the market value of any improvements made!

When work is done without a permit, the homeowner risks getting a “red-tag” – essentially a stop-work order. In severe cases, red-tags can be recorded against the property’s title, along with fees and penalties. In these situations, the home owner won’t be able to sell the property easily because conventional lenders won’t make a loan on a property with a red-tag. The potential buyer pool is reduced to people with cash – and those kinds of buyers usually want to be compensated for the risk they are assuming with this kind of purchase.

From time to time, the County offers programs to address this. I’ve written a blog about the latest Legalization Assistance Permit Program To read more, click here. LAPP was intended to help rural property owners (where unpermitted work had been done) make their properties safer without necessarily bringing older structures all the way up to current code. Financial incentives were offered in the form of reduced permit costs, and a single individual at the county was assigned to each homeowner to help streamline the process. The promise was, a homeowner could investigate what it would take to bring their property into compliance, and if they decided to abandon the project, the County would not keep records or pursue them.

Investigating the permit status of rural properties is often a complex process. A perfect paper trail is really rare! I encourage buyers to accompany me to the county, to talk with staff in various departments, so they understand what it means to buy a house where some of the work was not permitted. They also get the chance to understand what may be required to improve the home the way they want to. For example, many permits can be issued over the counter with a small fee.

When a seller approaches me prior to listing their property, it may be possible to work with the county to correct any errors in the files. It’s also possible to obtain certain permits, although that might require opening walls (etc.) so the inspection can be “finaled.” Still - the effort could easily result a higher sales price for the property.