There is a home in my neighborhood that had an addition built on to it many years ago (by a previous owner) and it was never "permitted". The addition is approx. 600 sqft. The MSL listing for the home shows it as the much smaller size, though the flyer states the larger size (and something about it being stated by the owner).
What are the implications of this? Will the current owner have to have the tax man re-asses the property, will there be a fine, have to pay back taxes for a higher apprasal, etc? Or, will the new owner have to do this.
Should a potential buyer walk away from such a situation?
Though it may be different where you are, here if the addition were permitted and inspected at the time it was built a certificate of occupancy (C of O) would be issued upon final inspections. Naturally this would cause an increase in taxes if it is additional living space or some other type of addition such as a deck or porch.
If a C of O were not obtained at the time of construction, the seller is required to obtain one for the addition before he can sell the house. There is no fine or back tax issues but now the addition must pass a structural, electrical and plumbing inspection which will of course be much more stringent than if things were filed for by ligitimate contractors and inspected when due. If anything is red tagged it must be corrected at the owner's expense regardless of cost.
Sometimes there are fundamental problems before you even get to the actual way it was constructed such as where the addition violates property setbacks, maximum lot coverage etc. The owner could apply for a varience from the municipality but if it is not granted (and don't look for any sympathy) the addition would be required to be torn down.