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My sister in law is on the verge of going into contract on an apartment in brooklyn. A few days ago she found out there were no permits filed for a renovation done about 5 years ago. It involved moving a kitchen, replacing a tub with a walk in shower, and building a partial wall the contains electrical. She's getting mixed responses about whether this should be concerning, and she's a follow-the-rules kind of person. The seller did get board approval and says the work was done by licensed/ insured people. Do you have any thoughts on this? What are the risks involved here? The seller insists no permits were necessary and won't discuss it further. My S-I-L would be willing to do a longer closing if the seller would just retroactively obtain permits and make it legal. She's convinced permits were called for.
have everything inspected, and addressed at the seller's expense?
Sellers will not acknowledge the work needed permits. They are, basically, not even responding to communication about it. Every question is met with, "we got board approval. no permits were needed". When she suggested finding a way to rectify things with the d.o.b. they said they needed to start showing apartment again if she didn't sign. None of us think they intentionally didn't get the work legalized, but it's very weird how they're responding to the concern--which is, essentially, by ignoring it.
risk is that a lender will not finance the purchase of the apartment. Have your SIL get a financing contingency in her contract, and if he lender needs the permits, seller will be in a position of having to retroactively acquire the permits or lose the buyer.
this is a hassle, and it involves time and money, but it's fixable.
DG Neary Realty
And tell her not to be bullied into anything by the seller. If he wants to start showing the apartment again then FINE. Your SIL adopts a ready-to-walk, you're-wasting-my-time attitude.
"moving a kitchen"!!!
^^should say 'your SIL should adopt'
Also if she decides to do any work requiring building permits and an inspector sees that the current configuration is different from his plan and sees no permits for the new work, big problem. Your s.i.l. Will have to have to remedy it. that said even if she does notvdobany work, a future buyer may have the same issue she does.
Apologies. Not accustom to the wife's I-pad.
No permits = no inspections of work. Never should you buy an apt/house where major work was done (as it appears here) without permits.
And Ali, how do you get retroactive permits for behind the wall work (ie moving pipes, electric) without an inspector needing to open the walls to insure everything is to code? It is more than just a hassle, it is a major issue.
Again, no permits = no inspections = no way to know if anything is to code = run away asap
Hi everyone, this is the S.I.L writing:
Thank you all so so much for responding to this. You're pretty much affirming what I was already feeling. While I feel confident the work was probably done well and by qualified people, I'm just queasy about not having legal permits for it. And I'm so far into the process, and so fond of the apartment that I'd be more than willing to mutually work to figure out how to retroactively approve the work. I know that can be done. But they won't even entertain a conversation about this. All I get is "the board approved it."
I hadn't even considered the issue of the bank not financing it, Ali... (I do have a financing contingency) I was more concerned that (God-forbid) something might flood or leak or catch fire and my insurance company would have a very legitimate reason to deny the claim. After which, I assume my neighbors would (rightfully) sue me. And while the chances of that are incredibly marginal, I know the fear of it will keep my from ever relaxing and enjoying my new home.
This is such a drag. I was so excited to finally find a place and, before this hiccup, my attorney and I were really happy with everything else about the building.
But. I just want to do stuff by the book. I don't have the stomach for the risk involved in this.
Thank you all again. I'm beyond appreciative. And slightly depressed...
There are so many projects that are done without permits, an inspector should be able to tell if the work was done well. Even if they had permits that does not mean the work was done well. If you like the place and an inspector says its good I personally wouldn't run away from it
Thans for the input, Primer. What about the the other concerns Keith mentioned: renovations done in the future, the subsequent buyer. The floor plan is obviously changed from the original. You can tell that quickly.
How hard would it be to get permits after-the-fact?
Also, what about insurance should a claim need to be filed? Have you seen anyone denied over unpermitted renovations?
What types of renovations require permits? If you aren't moving gas lines, water lines etc. I thought only moving those, moving wet over dry, removing support walls type of stuff needed permits.
w23rd-- how did you even catch wind that there was work done without permits???
A good attorney will catch these things as part of due diligence. Comparing the filed plan with the current configuration. A simple check then with the DOB (which we often do) will reveal whether permits were pulled or there are any open ones.
clearly seller isn't willing to bring permits up to date. Whether that's "right" or "fair" is one question, but another question is how much your SIL values the apartment.
She could, for example, bring the permits up-to-date with the DOB herself if the seller isn't willing to do it. If that's a path that she might be willing to pursue, the next step would be to have a contractor come in and estimate the scope of that project (for example, if work that should have been permitted is tucked behind a wall, the DOB inspector is eventually going to need to break the wall to inspect the work, so there's the cost of breakage/repair/repainting.)
It's possible that even if your SIL as buyer is stuck with that cost, it might be worth it to her.
Walking away is obviously another option.
Remember you can't fix the other side, you can only evaluate the costs and risks of your own choices.
Some learnings to share (some favorable, some not):
We did very major structural renovations that completely changed our floorplan, and the bank that refinanced our mortgage did not ask for any type of permits or documentation.
Regarding insurance, our co-op's proprietary lease is written in such a way that no renovations are never covered by the co-op's master policy, so we do need an additions and alterations rider. During our renovation, we also added some exterior elements (e.g., a large skylight) that, ordinarily, the co-op would be responsible for, per the Lease. I was advised to go with a top-tier carrier (e.g., Chubb) and have coverage of the skylight ( a few other elements) specifically written into the policy. The skylight was the major concern, as a hurricane or other disaster collapsing this skylight could very well flood the entire building.
We discovered when we applied for permits that our apartment was never properly filed with the DOB -- the DOB had no records of our second floor/mezzanine (space doesn't really meet the definition of either). The interesting thing is that this apartment had been sold at least five times, including by the sponsor, and no one had ever caught this. Fortunately, by an extreme stroke of luck, there was a documented floorplan that existed from 1970, and the DOB accepted this and grandfathered us. Some city agency must know about the mezzanine, though, because there is absolutely no way to get to our building's listed square footage in the tax records without counting our mezzanine our adjoining neighbor's.
My SIL's attorney didn't find this, actually, my SIL did. She was searching through the DOB site to check on issues with the building and found out there was no work on file for the apartment. She emailed the owner thinking she might be mistaken or looking in the wrong place and the owner said, "We didn't need permits." So my SIL starts researching to see if that's correct and finds that the rules are pretty clear about those renovations needing to be filed and inspected. It's not one thing, but multiple things.
She's trying to find out what's involved in dealing with this after the purchase, but she's pretty aggravated by the attitude of the sellers. I should mention that she's already willingly paying more than any of the comps in the building because she likes the place and plans to stay. So, after agreeing to an overpayment of about 10k (and forgoing representation because the seller's won't pay a buyer's broker) she's nearing the point of saying, "forget it."
Fascinating. Where do you find building plans online on the DOB site???
Btw, going through something similar, best of luck to your SIL.
She showed it to me and I don't fully remember, but you go to the DOB site and plug in the address. It pulls up a page that tells you all kinds of useful stuff; violations against the building, complaints, alterations that have been filed, whether the building is landmarked, subject to local-law 11, etc.
Good luck to you, too. What's holding your purchase up, if you don't mind my asking...
Mine's a plumbing/boiler issue.
w23rd's SiL, take a powder, then rat the seller out to the DOB. Squawk. Sing like a canary.
http://www.nyc.gov/html/dob/html/home/home.shtml Lower left corner.
I found this expediter helpful and friendly (used him for a similar situation)
ARCHITECTURE WORK, P.C. - 200 EAST 87TH STREET- 23A
NEW YORK, NY - 10128 / 212-289-5700 / 212-289-5863 FAX