Here's What Happens When You Renovate Your Home But Fail to Get a Permit

Home prices have been sky-high in recent years. Between that and the fact that mortgage lenders have been charging a bundle to borrow, some people are opting to renovate their existing homes rather than try to buy new ones.

In a late-2023 survey by CRAFTSMAN, more than half of Americans said they didn't want to sell their current homes, as they'd have to give up a low rate on an existing mortgage. And 65% of homeowners see home improvement projects as a viable alternative to moving and buying a new home.

If you're thinking of going this route, you may be inclined to do the renovation work yourself to save money. And you may also decide to skip the permitting process. That way, you won't have to deal with potential delays or fork over the permit fees your town charges. According to Angi, building permit costs range from $460 to $2,776, depending on your location and the complexity of the work.

But renovating a home without getting a permit can backfire on you in a very big way. Here are some of the negative consequences that might ensue.

1. You could face costly fines

Doing work that requires a permit could end up costing you in the form of fines if your town finds out about it. And sometimes, all it takes is a nosy neighbor to make that happen.

Of course, the extent of the penalty will depend on where you live and the violation in question. But if your goal in not getting a permit is to save money, know that you might be costing yourself more money if you get caught.

2. You could have trouble selling your home

When you sell a home, you're generally required to obtain a certificate of occupancy to present to your seller. That usually means having your home undergo an inspection by a town official.

If, during that inspection, an official finds work done with no associated permit on record, they may refuse to issue you that certificate. The result? You might have a really difficult time selling your home.

3. Your homeowners insurance may not cover a claim for damage

In the course of renovating your home, things have the potential to go wrong -- whether you're doing the work yourself or have hired a contractor. In many cases, homeowners insurance will pay for damage incurred during a renovation gone awry. But if you don't obtain the proper permits, your insurer might refuse to pick up the tab.

Similarly, let's say your renovation goes off without a hitch, only some of the work is done incorrectly, resulting in damage to your home down the line. If that project in question doesn't have a permit attached to it, your home insurance company may not pay out.

4. You could risk damage to your home -- or worse

A big reason towns require permits for renovations is that part of the process involves inspections to make sure the work is done correctly. If you skip the permit and associated inspection, you risk having improper work done.

That could, depending on the nature of the renovation, lead to damage caused by water or fire. There could also be structural implications that not only cause damage to your home but, worse yet, compromise the safety of its inhabitants.

You may be inclined to skip the permit when you're doing a renovation that seems simple enough. But if it's a project that your town requires a permit for, chances are, there's a reason you're supposed to get that permit. So your best bet is to pay the fee and go through the inspection process. That might seem like a hassle initially, but you risk incurring an even greater hassle if you don't go through the correct channels.