Starting Out and Question on Work Without a Permit

[Nicholas Bolcon]

Hello Bigger Pockets community,

 My name is Nick, I am from Rhode Island, and I am trying to get my foot in the door of the rental property business.  I have been browsing the forums for a while now but just got around to making an account, although my partner has posted a couple of times.  I look forward to continuing to gain knowledge through this forum and hopefully giving some back.

I have started searching for properties and putting in offers through a Real Estate agent I trust.  I currently have an offer in on property in West Warwick, RI.  It is a side-by-side duplex with two large units.  We will call them units 1 and 2.  Both units originally have 2 beds one bathroom, and they are large.  In addition, unit 2 has some basement space converted into an additional bedroom and bathroom and also an additional kitchen.  So unit two is listed by the selling agent as a 3 bedroom 2 bath "potential in-law".  The numbers with a 2 bed 1 bath and a 3 bed 2 bath work out pretty well at what the offer is.  The seller has not accepted the offer yet because they are leaving it on for a week and have an open house.  This has given time to do some extra digging and I just learned from my realtor today that the extra bed, bath, and kitchen in unit 2 never had construction permits pulled for adding them to the living space.  

I have read some info on un-permitted units as a whole (as in a actual 3 unit with a whole 4th unit un-permitted or un-zoned).  This seems a little different because in this case the unit is still zoned properly as a two unit but the additional bed and bath are not there as far as the town in concerned.  Does anyone have any thoughts or advice on if this would be a problem for renting it as a 3 bed 2 bath unit?  Thank you for any help and nice to meet you all.

[Ed Emmons]

It is definitely a concern. A lot depends on the local code officer. You have a couple choices. 1. Don’t say anything but be prepared to tear it all out if requested. This is providing all egress and safety codes were met. If not and there is a fire, you may have just ended your career. 2. Which is what I would recommend. Talk to the code officer ahead of time and explain what you are doing and you want to do everything right. You don’t necessarily have to give the address at this point. Gage his demeanor. See if you can apply for permits and have it inspected for a CO. That way you are covered and you will earn a lot of respect. That respect with the code officer may lead to other good deals. If he says no to this project you can ask if there are any he knows about or any properties where he would like to see a change of ownership in. Being a friend of the code officer is a great asset.