With interest rates at record lows, the looming threat of increased rates, and continually increasing rent and inflation, Americans are seeking a better investment for their well-earned dollars via home ownership. From Duval County to Manatee County, Sarasota to Miami, Florida has seen an influx of Americans from other parts of the country seeking a reprieve from the potential of future lockdown restrictive pandemic measures. However, while interest rates are still low, the price of a single-family home has gone up. The market is a seller's paradise, and many buyers feel the need to scramble to lock in a property and interest rate.
Who cares if the open floor plan stems from a few floor-to-ceiling walls that were knocked down or if the windows were replaced without a permit? You and I should care.
Permits are issued for many reasons in Florida to ensure that the work is done safely and to code. The permits are noted on the property appraiser's website and can help show the history of the property as well.
Purchasing a home with unpermitted renovations can put not only your physical safety at risk, but also your financial security.
- You may not get clear title and could be unable to get a mortgage or close on your home.
- If you file a homeowners' insurance claim, your carrier could deny the claim if the renovations were the cause of the damage.
- Some lenders could “call in” the balance of your mortgage – causing your balance to become immediately due.
- You could be responsible for obtaining the permits, needed inspections, and any additional work that may be needed, even after closing on the property.
- You could be responsible for penalties, fees, and/or fines depending on your location and the coding issues involved.
Why does a consumer debt defense firm care about unpermitted renovations?
In my own search for a residence, I have encountered situations where renovations were not permitted. While the seller's purchase may have been lowered to accommodate, I had to determine whether the risks involved were worth it for myself and my family. As I reviewed above, the risks of unpermitted work in a residence for myself were not worth it, and I could see how this situation could play out in the lives of my clients in today's economy.
How can you minimize your risk of purchasing a residence with unpermitted work and maximize your chance of a good investment? Below is a list of suggestions to get you started:
- Don't trust the advertisement. An “open floor plan” could be your dream layout, but if walls were removed without a permit, you could end up saddled with unexpected expenses.
- Research the property. Check your county property appraiser's website to find out information on prior renovations and permits. If the ad says a new roof in 2021, but the improvements are not listed on the site, it may be better to walk away from the property.
- Don't skip a full inspection. Find an inspector with a good background and ask them questions to confirm they are the right one for your needs. Attend the inspection with them and ask the questions you need to make sure you are investing wisely in a secure and safe residence. Hiring your own inspector helps to protect your interests – they are hired to work for you, not your realtor or the seller.
- Be honest with yourself. Have a budget, a plan for approaching your investment, and stick to them.
What can you do if your home is already underwater?
While prevention is the best course of action, if you find your debts already spiraling, do not wait any longer. At Holland Law Group, we are your “Partner in Law” and here to help you in the event that you find yourself facing debt-related hardships. With a free consultation, our office can quickly evaluate your circumstances to see what options are right for you and your family and get you on a path to financial recovery – whether through bankruptcy, foreclosure, or defense of a collection action. The combined knowledge of our experienced attorneys could be the solution you are looking for.