Pandemic renovations are coming back to haunt home buyers

Something was very wrong with the attic insulation.

Lisa Alajajian Giroux, a home inspector, knew right away what she was looking at in the Massachusetts home she was examining on behalf of a potential buyer. The owner had built a half-million dollar addition — a huge selling point — but Giroux could plainly see that not all the work met building codes. The spray insulation under the addition’s rafters wasn’t properly formulated or applied. Water condensed and dripped. Mold invaded.

As an experienced inspector, and as president of the American Society of Home Inspectors, Giroux knew that this, and other likely infractions of home permit ordinances, would have to go in the report to the buyer.

She’s writing that kind of letter a lot these days.

The high cost of pandemic-era shortcuts

During the pandemic, plenty of homeowners hastily renovated their houses, using the confusion of the moment to skip legally required permits, according to inspectors and contractors who spoke with Straight Arrow News. Now, some of those houses are coming on the market, and the unpermitted, illegal work is creating big problems for prospective buyers. 

“I see suspected unpermitted work four of five days a week,” Giroux told SAN, estimating that for 20% to 50% of the houses she inspects, she ends up recommending that buyers verify the property’s permit history.

Buyers acquire liabilities of unpermitted work along with the house. 

“When you buy a house you take on the future liability,” Constantine Anest told SAN. Since 2012, he has run Denver contracting firm Ethos Roofing & Restoration. These days, he often runs into illegal improvements, such as a deck he recently saw that was falling off the house it was supposed to be attached to. A seller’s disregard for local building codes signals more than disrespect for the standards for renovations: it can also reveal their attitude toward maintenance and repairs.

Or, as Anest put it: “If they’re not being truthful up front, you don’t want to do that deal.” 

Because nobody in the home buying process takes full responsibility for assessing the legality of any improvements, the role of permit detective is forced on buyers.

By definition, off-the-books renovations are impossible to track: Municipal building code departments can’t track what they don’t know about. However, the issue is sufficiently concerning that last July, a major home listing site, Realtor.com, added a data field to its standard listing template that enables homeowners to click through to a listed property’s permit history. Realtor.com compiles listings from regional multiple listing services, which are the primary point of entry for listings. Not every MLS includes the permit history field, a Realtor.com spokesperson told SAN. Neither does the database track the activity of the permit history function, the spokesperson said.

Prospective buyers are on their own to ascertain the status of recent improvements on a property they’re considering.

Some states require sellers to disclose any unpermitted work, but sellers usually aren’t required to provide any details. Agents typically follow the letter of the law, say inspectors and contractors, but nothing more. The National Association of Realtors declined to comment about the rising prevalence of unpermitted work and implications for agents, but pointed to its code of ethics, which stipulates that agents and brokers follow state law.

For buyers, the best line of defense, say inspectors and contractors, is to allow plenty of time and money to thoroughly research all aspects of improvements and replacements completed by the current homeowner. The more that buyers know about the permit process for the municipalities in which they’re househunting, the better positioned they are to deal with illegal work.

That starts with choosing a home inspector who will expand the scope of their engagement to pay special attention to renovations, especially those involving structural work, plumbing and electric, said Giroux. It’s usually up to the homeowner to track down permit paperwork — a chore often streamlined by online platforms that list permits by property and, separately, by contractor. The homeowner can trace the permit trail for a specific project to ascertain what permits the homeowner or their contractors obtained; if and when the work was inspected and approved; and if and when the permits were closed.

Then, it’s up to a buyer to bring the permit trail to the home inspection, Giroux said. 

“And you should accompany the inspector when they go through the house,” using the permit history as a guide to potential problems, she said.

Permit trails also can yield information about problems a contractor was supposed to solve, said Mitch Coluzzi , founder of SoldFast, a national chain that helps  home sellers renovate and sell their homes.

“In our disclosures, we detail, this is the contractor who did the work, this is the scope of work, and we show tests, where needed, before and after, to show that  problems like mold are fully abated,” Coluzzi told SAN. Potential buyers should request proof not just that work was completed, but that the problem was resolved.

The 16% collapse: Why record numbers of home sales are failing

Permit chaos might explain why a high rate of home-sale deals collapse. In December 2025, according to national brokerage Redfin, 16.3% of home purchase agreements were canceled — one of the highest rates ever. That process creates its own paper trail, said Coluzzi, that can tip off prospective buyers to permit problems.

“Most inspections happen within a seven to 10 business day window, and the buyer brings the issues to the seller,” he said. “It’s only after that when the financing kicks into action. If a deal falls apart quickly, it was likely due to an inspection.” If so, prospective buyers can request the prior inspection report from the listing agent to see if they want to proceed and if so, where to concentrate further examination of the house.

How to spot a hidden liability

Experienced buyers’ agents should have a strategy for dealing with unpermitted work, said Fisayo Alade, managing director with Dallas-based real estate investment firm AFM Advisors. 

“Especially if the area where you’re looking primarily has older, upgraded properties, you have to understand how knowledgeable the agent is in dealing with that,” Alade told SAN. 

“If the burden is just to disclose it and not to correct it, there’s not much for sellers to do,” he said. “It comes down to the buyer to make sure that it’s up to code and that the renovated or added space is registered as living area with the county.”

An appraisal may or may not reveal unpermitted work because the appraiser measures the space and compares it to the space on record. 

At that point the buyer has to decide if it’s worthwhile to negotiate a cure or to just let the deal collapse.

Negotiating a fix involves bringing in specialized contractors to diagnose the details of the problems, said Anest, then estimating the cost to fix or replace the subpar work, in compliance with building codes. While it seems that this should be the seller’s responsibility, it’s actually to the buyer’s benefit to take control of the correction process, he said, because the buyer can then ensure the work is done to their standards. 

“I would negotiate a dollar amount that it would cost and have a contractor of my choice do the repairs,” Anest said. “That way, you get to select the contractor and see the work. If you have the seller do it, they might do it cheapest way possible and you won’t have any control over the work they do.”

Even if a home buyer is willing to overlook unpermitted work and take on the risk, their mortgage lender and property insurer might not be.

 “I’ve had buyers tell me, ‘I can’t get insurance coverage or financing,” said Giroux. “Our goal isn’t to alarm people, but to give them the information they need for an informed decision.”

Ella Rae Greene, Editor In Chief