Risks of Remodeling Without a Permit. By law, most cities require that homeowners obtain a building permit before making modifications to their residence. Which modifications require a permit vary by city. Also, some cities are more vigilant than others in enforcing permit laws. Permits are serious business in San Francisco.

In order for the homeowner to receive a permit, the homeowner or his/her designee is required to file plans and pay fees to the city. In addition, the improvements are given a value which, if they increase the value of the property, may result in an increase in property taxes. Inspections are often required, and this means having to schedule and then wait for inspectors to approve the work that has been done. This process can be time consuming and inconvenient in the short run. It is for this reason that some homeowners skip the permit process.

If a permit is needed and you fail to get one, the city may discover this at some time in the future and getting a permit retroactively can frequently be significantly more expensive and much more problematic than having obtained the permit before work commenced. If work is not done in accordance with city procedures, or if the inspector is unable to determine if the work has been done properly, the homeowner could be required to open walls, tear up floors, so that the inspection may take place.

In addition, the law states sellers must disclose work that was not done with a permit where a permit was required. This may cause the owner to have to discount their sale price or to do costly or time-consuming repairs before title can be transferred.

For prospective buyers of a property, save yourselves future hassle and money by researching whether all work on the premises has been done according to code and with the proper permits. You may obtain these permits by going directly to San Francisco's Building Department and requesting the 3R Report (Report of Residential Building Record). Review the seller's and listing agent's disclosures. Have they stated that any work was performed? Was the work done with permits? Have they stated that some of the rooms or additions were done without permits or are unwarranted? Check this against the 3R Report. Is the report correct, complete? Your agent can scrutinize the 3R Report for you but it is your responsibility to ensure it is accurate and complete, and your decision as to whether you want to purchase a property where work has been done without permits.