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I am looking for a house and the realtor mentioned that there is a non-legal bedroom and bathroom in the basement, however, that bathroom is included in the listing. If I buy this house, will I face any issues obtaining insurance?
I am looking for a house and the realtor mentioned that there is a non-legal bedroom and bathroom in the basement, however, that bathroom is included in the listing. If I buy this house, will I face any issues obtaining insurance?
By "non-legal" I expect you mean it was remodeled without permits to add the bedroom and bathroom?
That will depend on the insurance company policies and if they are aware it is there. What you also need to keep in mind is that insurance companies will write binders on the home and not look or see what is there. Then afterward at some point when they may discover it they may change their approach and cancel the policy. That will wind up in a CLUE report that other insurers will see and may also declined coverage. If it were my situation I would make sure the insurance company is aware before you close on the house and better before any option period has expired.
Another aspect is even if you get the insurance there is no guarantee the insurance company would pay out on issues that arise with the un-permitted areas or any injuries/damages caused by them. They may cover everything else except those areas.
It could mean that the construction work was not done under a permit; it could mean that the work doesn't meet code; it could mean that because there's no closet in the "bedroom" it can't be officially listed as a bedroom; or it could mean a bunch of other things. No way to know from the information provided here.
It could mean that the construction work was not done under a permit; it could mean that the work doesn't meet code; it could mean that because there's no closet in the "bedroom" it can't be officially listed as a bedroom; or it could mean a bunch of other things. No way to know from the information provided here.
It would be something that needs to be fully understood before moving forward on the purchase. It is probably being taxed as a one bathroom also. At least in KS, the owner has to fill out that pre-purchase condition form, and it should be stated there that this work that was done. I would probably check with the city/county and not be specific, but ask how this would work had someone done it, as far as their involvement: codes and real estate taxes. Here, I can look up on the county real estate tax website and find out the bedrooms and bathrooms that are recognized by the county.
A potential issue for a home buyer is that the municipality (city/county) may force the new owner to either bring the home up to building code or remove any unpermitted renovations. Unpaid property taxes on the renovation could be levied by the municipality as well. There are a lot of potential pitfalls to look out for. Talk to a real estate attorney in the area of the home to cover yourself before buying such a home.
I am looking for a house and the realtor mentioned that there is a non-legal bedroom and bathroom in the basement, however, that bathroom is included in the listing. If I buy this house, will I face any issues obtaining insurance?
Depends on why it is consider non-legal.
Was it non-permitted work or is it non-legal in that it doesn't have proper egress, no closets, etc. What about it makes it non-legal?
A potential issue for a home buyer is that the municipality (city/county) may force the new owner to either bring the home up to building code or remove any unpermitted renovations. Unpaid property taxes on the renovation could be levied by the municipality as well. There are a lot of potential pitfalls to look out for. Talk to a real estate attorney in the area of the home to cover yourself before buying such a home.
Sometimes the owner can go for an after the fact permit. Call the city/county and ask if there is a path for this.
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