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I'm currently working on buying a house out in rural eastern North Carolina, USA. The house has a finished attic, which apparently was never permitted or inspected. Because of this, my appraisal has come in way below the agreed upon price (since about 25% of the square footage of the house can't be counted since it wasn't permitted), and the bank won't approve the loan.

The buyer is refusing to reduce the price of the house, but claims they'll get the space permitted after-the-fact in the next 2 days. That sounds ridiculous to me, because my experience is usually that such things take quite a long time, and also that a permitted project requires a rough-in inspection to verify plumbing and electrical and whatnot before the drywall goes up. I've heard of inspectors requiring people to open up drywall so they can verify electrical was done properly during an after-the-fact permitting process.

But it gets worse - the ceiling in the attic bathroom is 6.6ft, according to the appraisal. The ceiling in the rest of the attic is 6.9 feet. Based on my understanding of NC building codes, the minimum ceiling height is 7ft. So I'm not even sure this can be permitted.

My questions for somebody more experienced are these:

  1. Does it actually seem reasonable that this attic is going to get permitted properly and above-board in the next few days? My instinct is that there's no way it's going to happen, or if it does, that something improper will have happened or corners will have been cut.
  2. If you're aware of NC building codes, am I understanding the ceiling issue correctly? Can this even be permitted with less than 7 foot ceilings?
John Chrysostom
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  • Would go with your instinct, if you don't, quite sure the bank and insurance company will have something to say. – crip659 Jun 02 '21 at 11:23
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    Yeah, thank you. It may very well be that the bank isn't going to be enthused about this situation regardless of whether the permit gets done. In that case, it'd either be drop the price or blow up the sale. – John Chrysostom Jun 02 '21 at 11:50
  • Also have worry that after buying, things might change for the worst and be forced to rip it out. – crip659 Jun 02 '21 at 12:11
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    When weird stuff comes up on a home you have not purchased yet, the best option is to walk way. Possibly that will induce the buyer to lower their price, and you can choose to walk back if so, but in this case, you are looking at HARD problems with the unpermitted work, and your best bet is to make them someone else's problems, NOT yours. Beware the trouble having emotionally attached yourself to the idea of buying *this particular house* can cause you. There will be other houses. – Ecnerwal Jun 02 '21 at 13:57
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    I'd be wondering what else the selling did not disclose to you. If this were me, I'd probably walk since the seller seems intent on getting their price regardless of how much they messed up the deal. – jwh20 Jun 02 '21 at 13:59
  • If you're someone who likes to flip homes and doesn't mind opening up walls for inspection and are able to absorb a nasty surprise from time to time, the way to buy this house would be for cash .. if you have it. If this is your primary home and you need the mortgage and you don't want nasty surprises ... this is not for you. Perhaps you could agree a contingency in the contract, ie the seller delivers to you a fully permitted house with all zoning and building issues closed out. Put $x from the purchase into escrow, and if the issues are not resolved by an agreed date the money is yours. – jay613 Jun 02 '21 at 15:10

1 Answers1

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TL;DR

Correct, there is almost no chance of this space being permitted.

If it does get permitted then you need to seek the details as to how. Check the inspector's certification, check with the town, find out if they qualified for variances, etc...

Occupiable spaces, habitable spaces and corridors shall have a ceiling height of not less than 7 feet 6 inches (2286 mm). Bathrooms, toilet rooms, kitchens, storage rooms and laundry rooms shall have a ceiling height of not less than 7 feet (2134 mm).

https://up.codes/viewer/north_carolina/ibc-2015/chapter/12/interior-environment#1208.2

The buyer is refusing to reduce the price of the house, but claims they'll get the space permitted after-the-fact in the next 2 days.

After "what fact" exactly? After you give them money? Heck to the NO!

I live in NY and generally you should be working with a real-estate agent. If you've submitted a purchase offer and are now going through the flow of buying the house then you need to amend the purchase offer to add a contingency that the seller needs to get everything permitted and inspected before the sale can proceed.

If they want to sell to you then they will agree to this but if they throw a stink then that's your cue to walk away, period.

This of course assumes that you even want the house still. Would you even buy it for the current appraised value given this revelation? If you buy and wish to sell in a few years then the unpermitted work is now YOUR problem.

DIY-ers and weekend-warriors are crafty and that's not a compliment. They have added 33% of conditioned space to their home; do you really think they did it properly? How's the HVAC by the way. If the ductwork and equipment is still pre-addition then expect it to be woefully uncomfortable in the new part of the house.

MonkeyZeus
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  • Thanks for confirming my suspicions. This is helpful! – John Chrysostom Jun 02 '21 at 18:00
  • @JohnChrysostom You're welcome! Hopefully you can end up in a safe situation after all of this. In my area a bank appraisal costs about $400 but I'm sure that's a heck of a lot cheaper than the seller's asking price! – MonkeyZeus Jun 02 '21 at 18:52