Buying non permitted property

[Amber Straub]

I am purchasing my second house hack! I have found a property where the main home is currently being rented and the previous owner has converted the shed (permitted as a shed) into a 2 bedroom one bath home/ADU. The ADU looks great but the problem is that is has not been permitted by the city. I am getting mixed signals about how important that is and/or what type of issues or concerns I should have about it. I plan on keeping as a rental but doing a refinance in the future. Coming here looking for any experienced advice on this dilemma. Thanks!

[Jay Thomas]

When someone converts non-living spaces, such as warehouses or garages, into living space without proper authorization, it is considered illegal and violates the International Building Code (IBC). Most cities have strict regulations in place to ensure that real estate conversions are compliant with local laws, and violations can result in significant fines and other penalties.