Property Owners wanting to do improvements are always asking us if acquiring building permits is really necessary.
Let’s take a poll: Raise your hand if you can actually park two cars in your garage. Closet anarchists are we? As if it’s anybody’s business what you do on your own property, right?
Wrong! In boom years gone past, even the malicious whistle blowing of a jealous neighbor could be hushed with phrases like “pre-existing condition” or “grandfathered- in”. Upon selling the house, a good broker would list only the legally permitted square footage then work multiple offers over the asking price due to the “bonus second story master suite” or the “backyard editing studio”. With an interest only, stated-stated loan, escrow would close long before anybody asked the City’s Building and Safety Department for permit records.
These days there is a new whistle blower and it’s the LENDERS! BMR recently represented a Buyer in the purchase of a home near Griffith Park. In order to comply with new Federal underwriting guidelines, the Seller had to remove an unpermitted guest house from the garage and drywall over the staircase leading up to the unpermitted bedrooms in the attic. Not only did her house just shrink by HALF, but it cost her $8,000 out-of-pocket and three weeks of despair! Lenders are now more liable than ever for the integrity of the properties they finance and with their capital so severely limited, they will find unimaginable reasons not to approve a loan. Do you want to be stuck hanging upside down in your property for the next
Consult with licensed professionals to permit your projects and always seek to justify even the most indulgent improvements by their market value.
BMR Enterprises is a real property firm based in Los Angeles with general
contracting and real estate sales licenses. Our team draws from extensive experience in architectural design development, construction, real estate brokerage, syndications, and financial analysis to develop creative and thoughtful real property solutions that enrich our clients’ homes, businesses and lifestyles.