Scared to buy renovated townhouse without DOB renovation permits
Greetings Brownstoners. My wife and I have been trying to buy a townhouse in Bushwick/Bed-Stuy for 2 years now. We have looked at many house that have had full gut renovations (fully new plumbing, electric, support walls removed, etc.). In most cases, the owners (who are also the developers/flippers) did not apply for any permits with the DOB. We had an engineer come to an inspection who advised us against purchasing one such property. Our lawyer says “nobody really knows what could happen down the line with all of these non-DOB permit renovations. It seems like people are buying these buildings up without concern with regard to this. Has anyone heard any horror stories about this? What is the worst case scenario here? What we are worried about is: 1\. Shoddy work (developer is not held accountable to any standards as no permits/DOB inspections have taken place) 2\. The DOB coming after us if we do want to do another permitted renovation 3\. The DOB deciding to come after homeowners in such a position (making them pay fines for non-permitted work). Thanks! Matt
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in Legal 10 years and 6 months ago
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17 replies
slopefarm | 10 years and 6 months ago
“@slopefarm, would you buy a car if you didn’t know how to drive?” If I was wealthy and could afford a driver, yes. But the analogy is inapt here, in any event.
c_w | 10 years and 6 months ago
Given all the criteria that needs to be satisfied in buying a property, I think that quality – especially above standards – is usually not a deciding factor. This is just a byproduct of the market, real estate practices and developer economics. However, people do recognize and appreciate it when they do encounter true quality.
brucef | 10 years and 6 months ago
This conversation has special meaning for us because we are in the reverse situation. We are selling a house that we fully renovated (twice, once in 1980, and again these past two years). Because we know what we are doing, all aspects, both outside and inside the walls are done correctly. We fix old errors, some as old as 100 years, some from the 1950’s. We never close a wall or ceiling because, who would ever know?, or because it is a pain. So how do we effectively get the message out, that this isn’t a “flip”, and that the only thing you will see inside the walls is twice the strength, and heavier cable than in the code, and piping that can be isolated at every point? I did run out of money back in 1983, and had a family to raise, but I waited 35 years to finish correctly what I started. I had thought of offering 200 hi-res photos of what is behind the walls, which sure would come in handy if troubleshooting or future changes were considered. The realtors have said to us, “Too much information”. Aren’t there families looking for true quality?
no-permits | 10 years and 6 months ago
@cate, a master plumber or licensed electrician would never put their license on the line by taking out a permit and letting a flipper do the job. that’s not how it works. flippers will get a permit for minor general work , then do all sorts of work outside the scope of the plans/permits just so they have a permit to hang on the window.
no-permits | 10 years and 6 months ago
@slopefarm, would you buy a car if you didn’t know how to drive? or maybe you would want learn how to drive and then buy an inexpensive car that’s easy to maintain (an apartment). you’re not going to go out and buy a ferrari that requires a lot of attention and expensive maintenance (a house) unless your really into it. maintenance costs between a car and house are very very different. my comment was general and not necessarily directed at the OP.
bbbad | 10 years and 6 months ago
I just bought a townhouse close to your location. If you make the decision to buy the house, make sure you have extra money for what you may have to go thought. How much? We just started and I think we already spent 10k in repairs (pluming, HV/AC, roof, contractor) and there still more work to be done. If the basement is all cover with drywall it may be hiding the real situation of pipes, etc. (that was our case). If the house has a rear extension, check the walls sheared with the neighbors. Make sure to bring a good inspector who knows about old houses and cheap gut renovations but if the main things are covered they cannot see them. All this information is going to help you to negotiate if you really want the house. As Cate said, keep in mind the insurance company and as HousNut said, be ready to go though the process.
slopefarm | 10 years and 6 months ago
Yeah and don’t buy a car if you can’t take apart and repair the transmission yourself. Seriously, don’t listen to no-oermits. If you are not handy there are people who are who you can pay to fix things. What you want to do in buying a house is make sure you understand the level of risk you are taking on and making sure you are protected for it. If you are handy, great. But if not, get good advice, understand the risks, and make sure you can cover the expenses. You are trying to understand the risk you would be taking on witha flipper-renovated house where the job was unfiled. good for you. It may be a risk worth taking, but too many people got screwed by not kicking the tires. Kick the tires hard here, and make an informed decision.
cate | 10 years and 6 months ago
Maybe look for a house that was flipped several owners before you, in solid condition, with no prior sagging/leaks, little change to the layout, and perhaps somewhat outmoded builder-grade kitchens and baths. Then you can just re-do those rooms only.
cate | 10 years and 6 months ago
Not to be a scaremonger, but what about insurance? If something happens like a fire and the electrical wasn’t permitted, will the insurance company refuse to pay?
no-permits | 10 years and 6 months ago
in my opinion, there are way too many people on this site that should not own houses. apartments are fine. forum questions/posts are the biggest indicator. what is the draw for these people to own a house? yes, yes, it sounds nice. but you really have to be devoted, very handy and understand and be able to do the basics unless you have enough money to not care. stick to apartments people.
rastermon | 10 years and 6 months ago
#1 is a real concern, especially if it’s a flip and not a renovation that was done for an owner occupant. Having been involved in renovation both unpermitted and fully permitted, I think you are going to see much better quality on a permitted job, not just because the DOB is watching but also because you have licensed professionals and tradespeople involved at every step of the way. You should be very concerned about what’s behind the walls on an unpermitted gut renovation. And as a matter of principle I would not trust a full gut rehab done by somebody who won’t spend the extra 10 or 15 or 20% to engage architect and engineers and pull the proper permits. #2 might be a concern if you plan on doing additional renovation work right away. But, I think the biggest problem will be finding people to do that work for you. Licensed electricians and plumbers are really wary of getting involved with filing for work related to unpermitted work done by somebody else. #3 is the one thing I think you don’t have to worry too much about. If you do wind up getting an ECB violation for work without a permit, the fact that the work was done before you bought the house should be a good defense for getting the violation dismissed. I know a neighbor who was in that situation for a basement conversion by the previous owner, and got off without having any fines to pay–but they had to go through a whole lot of trouble in the process.
no-permits | 10 years and 6 months ago
if you’ve really been looking for TWO YEARS.. it sounds like you’re more scared of pulling the trigger. you’ve had to see a variety of property over that two year period, not just flips. like someone else said, all houses have problems. maybe an coop/condo apartment is better for you?
zagor | 10 years and 6 months ago
You are right to worry about the quality of a flipped property. Your options are to pay a premium for a well done renovation which is hard to find or buy a gut job, which is also hard to find before the flippers or other investors get their hands on it. If you’re buying a flip assume the worst and have a contingency repair budget. Bring an inspector and maybe even a contractor to find as many problems as possible and use this to negotiate.
cate | 10 years and 6 months ago
Are you sure absolutely nothing has been permitted, including individual electric and plumbing jobs? My understanding of the way flippers work (at least the visible outfits) is that they don’t file for the overall construction, but they have a relationship with a master plumber and electrician. Those license holders file electrical and plumbing permits as needed, and self certify, while a variety of skilled to unskilled laborers do the actual work. The theory (polite fiction?) is that supposedly the flippers aren’t moving any plumbing, fixtures, walls, egress, etc., so no overall construction permit is necessary. . You can always claim no fixtures etc. were moved also, unless there is evidence to the contrary. . As to the actual quality of flips, I’ve heard of and seen results all over the map from bad to perfectly acceptable. . I suppose you can’t really make generalizations, but if the house has always been dry to start with, and few changes have been made (such as relocating wet rooms), your chances of success should increase. Of course you also want the people putting in the plumbing and electric to have basic skills and use the right materials.
slopefarm | 10 years and 6 months ago
We went into contract with a flipper for a fully reno’d house while the reno was ongoing. Before the work was done and before we closed we found all kinds of shortcuts that the inspector can;t see — joists cut to accommodate plumbing, mold, water-damaged joists, less-than complete insulation hidden behind new sheetrock, non-code plumbing and dangerous wiring, not enough outlets or amperage, etc. Can’t say that is what you will get but you are rolling the dice. Sometimes the flipper reno is just on the surface and you are really getting an old house with new sheetrock and finishes. One question is how much CAN your inspector see. Is the ceiling open or sheetrocked in the cellar? How much of the mechanicals can you see? Can you tell what is new or upgraded in terms of plumbing, electrical etc? Too much sheetrock in the cellar (IMHO there should be none) might mean they want to hide things from you. If you want to proceed, perhaps bring in a plumber and electrician to test the mechanicals. Electrician can tell you quickly enough if the wiring is balanced, safe and will support 21st century living.
HouseNut | 10 years and 6 months ago
I bought such a house that was renovated by a flipper close to 4 years ago; it had previously been abandoned for at least 2-3 years. We worried about the same things, but the house met our other purchase criteria and we weren’t finding anything else, so we took the leap. The first year was pretty rough as a lot of issues emerged that the engineer didn’t or could not have caught: the roof leaked and there was no gutter, the boiler broke down, a pipe burst as it was close to an exterior wall lacking insulation, electricians discovered several poor wiring issues. I think we spent about $40k more than we expected in that first year. We look back now and wonder how we made it through (as we did this while Mr housenut started a new career and our twins were born). That said, we feel pretty fortunate now. The house still has issues, which we continue to address, but the value has close to doubled from our purchase price. In the end, I agree with the previous poster that your comfort with risk is a personal issue, and would add that it helps to have additional savings to address any issues which may arise.
mousta | 10 years and 6 months ago
Those are all real concerns (maybe not #3 so much, just never let them in!). If you decide to do permitted work down the line you might have to remediate some issues but as with anything it all depends. Unless something is egregiously wrong inspectors are focused on what you are trying to get permitted. They aren’t there to do a whole inspection of the house. If you are doing a kitchen and need to move plumbing that might lead to finding things like improper venting, gas line issues. Who knows. But this is a common situation. As for the shoddy work, that is a real risk and one that is hard to assess if the bad work is behind the walls. But usually bad work behind the walls means bad work on the surface too. Basically buying any house is a risk. If there weren’t open violations and the work looked good to me, an inspector and other reliable, knowledgeable people then I personally wouldn’t hesitate in buying a place that fit my purchase criteria. But it’s all a personal choice.