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California Looks to Curb Sales of Houses with Unpermitted Work

(, June 26, 2013 ) Sacramento, CA -- When it comes to house flipping, time is money. The Bay Area building officials are now saying that the reality business model has led to flippers cutting corners in order to get permits and pass city inspections.

While there are unpermitted work that is a problem for the cities in the area, the largest factor in the dilapidated foreclosures changing hands leads to more rehabbing being done, which leads to folks skipping basic requirements when prepping flips.

To be fair, it is not simply flippers who make the renovations that are not up to code.

“If you stand on a street in the inner Sunset and look down the block at 20 homes, probably 12 or so would have done extensive remodeling without permits,” said Mark Colwell, an agent with Redfin in San Francisco. “The reason is because of feasibility and what it means to do improvements in San Francisco. If there is space from a basement or a bonus room below your little two-bedroom bungalow in the Sunset, it’s pretty cheap to add another bedroom and bathroom, even if it’s kind of funky and has a low ceiling height. A lot of people go to Home Depot, do some research on plumbing, (do the work) and put Mom and Dad in there.”

California mandated a disclosure form policy that is to include a section to stop work being done without the proper permits. Buying houses that includes unpermitted work means big hassles for new owners, and the state hopes to curb the hassle of such cases.

“People don’t always know because the property may have been sold four times in the past 20 years,” Colwell said. “They say, ‘We think the kitchen was done with permits but aren’t sure.’ It’s a buyer-beware situation. I make clear to my clients that what that means in the real world. If you were to go pull permits to do an extensive expansion of your kitchen or something like that, and the city were to come out and poke around and say, ‘What’s this here, did you get permits for that?’ they could potentially put an abatement on the property and require that you do it correctly or rip it out and return it to its previous use.”


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