Key Highlights

The home seller must disclose the knowledge they have about unpermitted work.
The "Seller's Property Disclosure" document protects the seller from liability and litigation after the sale of the property.
Some minor unpermitted work isn't likely to hurt the sale of your home.
Open Violations will keep financed buyers from getting a loan, leaving you with cash buyers only.
How to navigate a sale when your home has unpermitted work or a violation.

Introduction

The answer is yes, and here’s how to do it successfully. Many homes in the United States have some unpermitted work in them, and Miami is not an exception. The work may have been made by the current owner of by previous owners. You may not be aware of unpermitted work because each municipality have their own Zoning and Building Permits ordinances and you may have made a change without knowing you needed to get a permit first.

Homes with unpermitted work in Miami can be sold successfully as long as you disclosed the knowledge you have about it. As a Real Estate Broker myself, I provide clients with the forms needed to cover this requirement and protect them from litigation after the sale.

Homes with violations can also be sold, but will only be purchased by cash buyers because code violations are a cause for disqualification of the conventional loans most homebuyers use. This means these homes will often be sold for less than market value because the home is only available to a reduced numbers of sellers -cash-buyers only- and the fact that a buyer will have to remedy the violation.

Transparency is Key to Stay Trouble Free

Florida Real Estate law stipulates that the seller must disclose the information they have that materially affects the value of a home and permits, liens and violations qualifies as material information. So, in order to keep you protected from liability and future litigation (even after the sale) you should share the information you have with your Listing Agent and disclose it to the buyers using the correct channel. Your Listing Agent will use a form called "Seller's Property Disclosure" and guide you on how to fill it so that you are compliant with all disclosure requirements specified below.

Florida statutes set out specific requirements, which include that sellers disclose (see legal statues linked below in each one):

The dangers associated with radon gas, which occurs naturally and is often found in buildings in Florida (Florida Statutes §404.056(5), by including a written statement in the transfer paperwork
If selling a coastal property, the potential for erosion, and that the property might be subject to regulations regarding construction, rigid coastal protection structures, beach nourishment, and the protection of marine turtles; also in writing within the transfer paperwork (Florida Statutes §161.57)
If the property is in a community governed by a condo or homeowner's association, information about the mandatory membership, the requirement to pay monthly or quarterly fees as well as assessments, and what documents contain more details about the association and its rules (Florida Statutes §720.401); also, there's a similar statute specifically for condominiums (Florida Statutes §718.503)
The existence of any pending code enforcement actions against the seller, per Florida Statutes §162.06; the seller must not only disclose this in writing but also notify code enforcement officials of the property transfer, and
A property tax summary containing statutory language essentially stating that a buyer cannot assume that the amount of property taxes currently paid by the seller will remain the same after the sale, and that making improvements could trigger a reassessment (Florida Stat. § 689.261).

Determine If You Have A Problem Or Not

As a Miami Real Estate Broker, I find myself addressing this topic often with agents and homeowners alike. And I would like to start by saying that most homes have unpermitted work and you can still sell it successfully as long as you disclose what you know. An experienced Miami agent understand this is a common issue and should know how to help you handle it.

When selling your home, it's important to be transparent about any illegal constructions or unpermitted work that may be present. Potential buyers will likely hire a home inspector to assess the condition of your home, and any unauthorized constructions or unpermitted work can raise red flags.

To identify illegal constructions or unpermitted work, it's essential to carefully review your home and gather any relevant documentation or permits. This may include architectural plans, building permits, or receipts from contractors.

In preparation of this article, I inquired the City of Miami Building Permit Department regarding this and got the following response about this: “If you are unsure about the legal status of certain aspects of your home, it's advisable to consult with a real estate attorney or contact the city’s building department for information. They can help you determine whether any constructions or modifications in your home comply with the local building codes and regulations.” - Asael Marrero, Building Department Director.

Identifying What Permits Have Been Pulled In A Home

Any person -owner or not- concerned about the permits in any home can consult the history of the permits from the city or county where the home is. You can also get the microfilms for a home, which is all drawings and blueprints registered with the city, where you can see the past work that has been legally been done in it.

Here is a list of links you can use depending on the location of the home:
Miami-Dade Building Permits website
City of Miami Permits website
City of Coral Gables Permits website
City of West Miami
City of Doral
City of Sweetwater
If you need information on any other city, you can typically google the name of the city and the words "Building Department" or "Building permits" and you are likely going to find the relevant website. You can also go in person, but who wants to spend three hours doing something you can do in 15min online?
Then by comparing the information you found with the actual condition of the home, you can easily determine what work has been done with permits and what has not.

Understanding Code Violations and Liens

In your research you may find other issues, as a home seller you should address these right away to ensure a successful sale for top market value.

Open Permits: These are permits issued by local authorities for construction or renovation work on a property that haven't been closed or finalized after the work's completion. They indicate that the work either hasn't been completed or hasn't passed the necessary inspections to ensure compliance with local building codes and safety standards. Open permits cause a financed buyer to be unable to close on the purchase of your property. Closing an open permit requires completing the work and passing a final inspection.

Code and Zoning Violations: These refer to any violations of local building codes or Zoning regulations, such as issues with electrical systems, plumbing, or structural integrity, additional dwelling units or even illegal additions.

Code violations should be repaired and re-inspected in order to close the violation. You can often get an extension of time before fines start accruing, and if you show good will to the city, they are likely to work with you so you can fix them. Cities are typically interested in working with homeowners to have them remedy violations.

Liens: These are legal claims or encumbrances on a property that may affect the title or ownership rights. These can include unpaid taxes, outstanding debts, or judgments against the property owner.

To ensure a successful home sale, it's crucial to address these code violations and liens. This may involve working with a real estate attorney or consulting with the local building department and tax authorities. By resolving these issues before listing your home, you can avoid potential complications during the selling process.

How to Fix Code Violations, Open Permits or Liens

Here's a list outlining the steps to address open permits, code violations and liens:

Obtain a copy of your property's title report to identify any existing liens.
Contact the relevant authorities or agencies to address any code violations.
Pay off any outstanding debts or taxes associated with the property. Or if a permit is open, request a final inspection after finishing the work.
Obtain a release or satisfaction of lien from the appropriate authorities.
Prepare to provide documentation of the resolution of code violations and liens to potential buyers.

By taking these steps, you can ensure a smooth and legally compliant home sale.

What If I Cannot Fix The Problems My Home Has?

You are not alone and still have options. You can still sell your home with problems like the ones we described before, but you will get less than top market value for it. Our goal is to help you get the most money for your home, that's why our first option is to help you fix those issues for you.

Option 1: Get help to resolve these issues and still sell for Top Market Value: We can work with you to try to resolve these issues and help you sell your home for the most amount possible. This is my area of expertise, so the first thing I do for my clients is to try to resolve the problem by working in collaboration with Contractors, Permit Specialists, the City and the Homeowner themselves to coordinate fixing these issues.

If the cost of paying the fines or doing the work needed is something the seller cannot afford, we have financing partners who have programs that may enable you to do all repairs without out-of-pocket cost, so you can sell for more money and then pay them back from your increased profit.

Option 2: Sell the home for Cash in the market in 30-60 days: Listing the home for sale and market it for cash buyers only. We can market your home professionally and attract the right type of buyers to bid for it, and sell it to the highest bidder. This is an easier process and can yield a successful sale.

Option 3: Sell off-market in 7-14 days: Many investors look for distressed properties to buy and can close in one or two weeks. As Real Estate Broker I have many investor clients who may be interested in buying your home cash quickly and can compare multiple offers to help you get most money for it.

Conclusion

Selling a home is always possible, even with unpermitted work, violations and liens. The first isn't likely to keep you from selling for top value but the latter will disqualify most buyers leaving you with less bidders for your home.
Consult with your preferred listing agent to determine the impact of unpermitted work and code violations on your home's value and sale price.
Work with an experienced real estate agent who can guide you through the process and help you find the right price for your home.
Always consider disclosing any unpermitted work or code violations to potential buyers to maintain transparency and avoid legal issues.
In some cases, it may be necessary to address the unpermitted work or code violations before selling the home. This could involve obtaining permits, making necessary repairs, or negotiating with the buyer to handle the issues after the sale.

By addressing these issues proactively and working with professionals, you can navigate the challenges of unpermitted work and code violations and sell your home successfully.

Frequently Asked Questions

How can I sell my house with unpermitted work?

Selling a house with unpermitted work can be challenging, but it is possible with the right approach. Here are some steps to consider:

Work with an experienced real estate agent who has dealt with similar situations before. They can help navigate the process and determine the impact of unpermitted work on the final sale price.
Disclose the unpermitted work to potential buyers and provide any relevant documentation or permits that may be available.
Consider offering a cash offer or accepting the best offer that takes into account the unpermitted work. Some buyers may be willing to take on the responsibility of addressing the work themselves.
Finding the right real estate agent who understands the local market and can negotiate on your behalf is crucial in selling a house with unpermitted work.

By following these steps and working with professionals, you can sell your house with unpermitted work and achieve a successful sale.

What are the implications of selling a home with code violations?

Selling a home with code violations can have implications for both the seller and the buyer. Here are some key considerations:

The comparative market analysis (CMA) conducted by your real estate agent will take into account the code violations and their impact on the home's value and purchase price.
Potential buyers may require additional inspections or assessments from their own experts to evaluate the extent of the code violations and determine if they are willing to proceed with the purchase.
The buyer's agent may negotiate for repairs or financial concessions from the seller to cover the cost of addressing the code violations.
The closing date may be delayed if the code violations require time-consuming repairs or resolution before the sale can be completed.

It's important to work closely with your real estate agent and legal professionals to navigate the implications of selling a home with code violations and ensure a smooth transaction.

How much would be the Price Difference between selling with violations vs. fixing all problems?

It varies widely based on the cost and time it takes to fix the problems. Doing so, often includes re-doing work at the property, pass inspections and paying fines to bring the property up to date. And cash buyers typically pay between 10% and 25% less than market value to account for the trouble of fixing these problems and deduct the cost of fixing the problems from their offer price. In exchange, home-sellers get the convenience of selling quickly and avoiding the hassle, effort, costs of going though this process.

Can I sell my Miami home with unpermitted work or violations?