Buyer Being Retroactively Held Responsible for Building Permits Not Obtained by Seller

Real Estate Agent with Warmath Real Estate @ Keller Williams North Atlanta

Here is a crazy situation.  I was curious is anyone else has run across this and how they handled it.

Location:  Cumming , GA (suburb of atlanta)

My client the buyer purchases a house a year ago.  House had a finished basement.  Seller's disclosure says that any required permits have been obtained.

Last week, the doorbell rang.  It was the building inspector, who had been called by a nosy (and I'll add asinine) neighbor who had seen painters at the house.

Inspector explaines that they have to respond to all calls.  My client shows him the basement, which has clearly been finished for a while and is being very lived in.  Inspector then says he has to check to see if the proper permits were filed to finish the basement and if they were not that my client, the current owner, would be responsible for paying for the permit and that the inspectors would have to "open the walls and ceilings" to inspect the plumbing and electrical.  My client would then have the cost of repairing the walls, etc.

First of all:  Can the County do this after the fact?  Secondly, what sort of recourse does my client have against the previous owner if indeed the county does come in and do the "destruction inspection."

Comments (4)

Jessica Beganski
William Raveis Real EState - West Hartford, CT

I've heard of this happening but I thought it was an urban legend...

It would seem to me that your buyer could sue - you, the listing agent and the seller. You and the listing agent because permits would be the type of thing we are expected to know about and disclose to the buyer and the seller for misleading the buyer.

Do you have anything in writing from the seller where they say there were permits?  If so, I would think that would put you in a better position - even if your buyers choose to only sue the seller.

One other thing I've been telling clients in my area regarding permits is that one day, not now, insurance companies may deny claims for damage done to areas of a home that don't have the proper permits.  I heard this was the case in New York.

I think it's always safer to find out about the permits (I go to town hall personally), disclose to your buyers what's missing and let them decide what to do.

Good luck and I hope your buyers are able to work something out so no one has to be sued.

Aug 27, 2008 06:43 AM
Kevin Warmath
Warmath Real Estate @ Keller Williams North Atlanta - Alpharetta, GA

The seller's did provide a standard Georgia Seller's Disclosure where they clearly state that all required permits were obtained for any modifications to the property.

To me that would seem to cover the Listing Agent and the Selling Agent (me).  It might be nice that you go to the courthouse and verify that permits were obtained, but i don't see that as an obligation of either agent, particularly with a seller's disclosure.  I made no warranty either way weather permits were obtained.

It will be interesting to see how this plays out.

Aug 27, 2008 07:16 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

I would say that if the sellers said there were permits and they knew there were no permits the sellers committed fraud by saying they had obtained permits.

But as the selling agent I'm sure you are not responsible for checking to see if permits were pulled.

I think your best bet would be to advise your purchasers to hire an attorney to know what their options are before the county comes and tears down walls.

Keep us posted. I'm very curious as to the outcome of this situation.

Sep 21, 2008 11:42 AM
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Nov 29, 2008 04:47 AM
Jason Wier


Thanks for writing this entry.Other buyers now know for sure what to check before buying a house.They will see to it that they are not tempted by the seller.

Jan 13, 2009 04:57 PM