What Requires a Permit, & Does Unpermitted Work Affect Your Ability to Sell?

My July 25th column described how a seller got into a legal dispute from not having disclosed an unpermitted basement finish done decades earlier. That story raised a question common among homeowners — what work requires a permit, and does failure to obtain a permit make it harder to sell a home?

Incorporated cities like Denver, Arvada, Lakewood and Golden issue the permits within their jurisdiction, but residents of unincorporated areas must get permits from their county’s planning and zoning office. 

Each jurisdiction has slightly different requirements. For example, Golden lets you install a backyard fence up to 7’ without a permit (unless on a corner lot or in an historic district), but Jeffco requires a permit for any fence over 42 inches tall.  Denver is more generous, exempting “posthole-dug fences” up to 8 feet high.

When it comes to structures, whether habitable or not, the requirements are fairly consistent. There is an International Residential Code (IRC) which is updated regularly, and most jurisdictions adopt the updated code with only minor adjustments.

I found only one jurisdiction, Golden, which provides a simple one-page PDF listing what does and does not require a permit. Click here for a link to that PDF.  If you are in another city or unincorporated area, you can still expect that document to reflect what your jurisdiction might require of you.

Basically, any modifications to the walls, windows, roof, plumbing or electrical system of a home requires a permit, and it’s a good idea to obtain one, even though you can sell a home which had unpermitted work done, so long as you disclose that fact to your buyer.

Call or visit your jurisdiction’s planning department to find out what permits are and are not required for your home. You’ll find that most jurisdictions don’t require a permit for replacing cabinets, countertops, light fixtures, ceiling fans or plumbing fixtures in existing locations, or for roof or siding repairs/replacement (10% or less).

Denver exempts oil derricks, which I found to be a strange inclusion in its list of exemptions.

As mentioned in my earlier column, the standard Seller’s Property Disclosure form provided in the course of a real estate transaction asks the seller to disclose any work done without the required permit in the previous 12 months.  If so, the seller should check “Yes” and use the space provided on the form to describe what was done.

If, however, the seller had work done more than 12 months prior to completing that disclosure form, I recommend that he or she use the comments column to describe the work done without a permit and when it was done.

    Typically, this disclosure form is provided to the buyer prior to hiring a professional inspector to conduct a thorough inspection of all the home’s components. That way, the disclosure  can be given to the inspector, which would cause him or her to pay special attention to the area of unpermitted work to determine if the work was done “to code” and without defects that the buyer might then ask the seller to fix.

   By disclosing all unpermitted work in that document, the seller can forestall any claim after closing such as I described in my July 25th column. Listing agents should ask that question about older unpermitted work and handle it in this manner.  I certainly will from now on!

If you’re in an HOA, you probably will need to get approval for repainting the outside of your house, concrete repairs, landscaping changes or even the location and color of exterior radon mitigation equipment — things that don’t typically require a city or county permit.

The reasons that permits are required make sense. Consider, for example, replacing a water heater or furnace. If they are gas appliances, today’s code requires that outside combustion air be provided so that the appliances don’t deplete the oxygen in your home, and gas-fired devices emit deadly carbon monoxide, so it’s important that they be installed correctly. It is only by getting a permit that you ensure the work is inspected by the city or county, which is a good thing, especially when it comes to health and safety.

In those cases, you’re probably hiring a contractor to do the work, and the contractor should be licensed with the city or county where the work is being done and should obtain the permit for you.  If you are a do-it-yourselfer, you can get the permit as a homeowner, but the city or county may have you take a written test to show that you’re competent at the work being done — and it will be inspected. (I remember taking such a test when applying for an electrical permit in Denver — I failed the test…)

Permitting fees and requirements cause some homeowners to do work without getting a permit and hope they’re not caught. If the city or county catches you mid-project without a permit — something that happened to me in Denver in the 1990’s — expect them to issue a stop-work order and to double the permit fee. 

At least in Golden (speaking again from experience), you can turn yourself in and get a post-facto permit without paying a penalty, but you’ll need to show that the work was done to code and have it inspected.

Property taxes are based on a market valuation of your home by the county assessor, and getting a permit for your finished basement, new deck or detached garage, etc. could result in a higher valuation and therefore higher property taxes for your home, but that’s not a good reason to avoid going through the permitting process.  How much will your taxes go up?  Let’s say your basement finish cost $50,000. It’s unlikely your home’s value will increase by the full amount of any renovation, but even if it did, the assessment rate is now 7.15%, which means your assessed valuation would only increase by $3,575. If your mill levy rate is, say, 100 mills, that means your annual property taxes would increase by only $357.  But it won’t. And if you were to spend the same $50,000 on a kitchen or bathroom remodel, it might not increase the assessor’s valuation of your home at all, even though it was permitted, because it didn’t add any finished square footage to your home.

What the assessor values your home at is not based on what you paid for it, and neither is it based on what you spend to improve it. Your home’s valuation is based on the sale of comparable homes to determine what your home might have sold for on June 30th of the most recent even numbered year. Thus, even if you purchased your home on June 30, 2018 (the valuation date), the assessor won’t use what you paid for your home as the value of your home.

Theoretically, the county assessor’s office could monitor MLS listings and compare the description of your home with what their records show. But I have never heard of anyone’s assessor records being changed based solely on an MLS listing of their house.

If you have any questions that this column did not answer, please feel free to call me or any of our agents at the phone numbers below. I’m always happy to hear from my readers, and all of us are happy to answer your real estate questions.

Jim Smith, Broker/Owner,  303-525-1851

Broker Associates:

  • Carol Milan — 720-982-4941
  • Norm Kowitz — 303-229-3891
  • Andrew Lesko — 720-710-1000
  • David Dlugasch — 303-908-4835
  • Chuck Brown — 303-885-7855
  • Kristi Brunel — 303-525-2520
  • Carrie Lovingier — 303-907-1278
  • Jim Swanson — 303-929-2727

Author: Golden Real Estate, Inc.

Golden Real Estate is a prominent member of the Denver/Jefferson County real estate scene. Based in Golden, we service both Denver and Jeffco, representing both buyers and sellers. We're well known for Broker Jim Smith's weekly "Real Estate Today" column published in the Denver and Jeffco editions of the Denver Post's YourHub section each Thursday. The column also appears in several weekly newspapers and is archived at www.JimSmithColumns.com. We have nine agents, all of whom are Realtors and EcoBrokers. Our office is solar powered and several of us drive electrics cars. Known for our sustainable practices, we accept polystyrene (aka "Styrofoam") for recycling, keeping 200 cubic yards per year out of area landfills.

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