Expert: Karyn Foley - 2/21/2005

Question
Hi.  I'm thinking of listing my home for sale in the near future.  I live in Maryland.

I renovated my basement into a rec room and office 3 years ago.  I did all of the work, except the electrical.  There was no plumbing involved.  I did some of the simple electrical, and hired an electrician to do the more complex items.  I never got a building permit for any of the work.  

So far as I know, it is all according to code, with the only exception that I did not place electrical outlets every six feet, because I did not have a need for that many outlets and it was expensive.  There have been no problems for 3 years.

Do I need to disclose the lack of building/electrical permits to potential buyers?  Should my sales contract have any special wording to protect me from a future lawsuit by the new owner?  Again, I am not aware of any problems.  Thanks!

Answer
Dear Scott:  Yes!  Simply state that the basement renovation has no permits.  Do you even say if it is or is not to code.  You have no proof.  And, yesterday's code may not be today's code, and if the new buyer wishes permits it would have to be retrofitted to today's code.  Your sales contract should state that it has no permits.  Plus, your listing agent should also state in her publicity flyers that there is a basement renovation but that it has no permits.  That way, the buyers know about it in advance, when they see the property and when they make an offer.  Do not get into a situation where you agree to bring it up to today's code for any new buyer.  The new buyers should have the opportunity to do full investigative work into the home and into the renovation in particular.  Let the buyers rely on their inspector rather than your word.  Many homes have repairs, additions, renovations et cetera.  As long as there is full disclosure and buyers can investigate, you should not have a problem.  Wise of you to ask, and good luck to you!  KARYN FOLEY