Selling a House With Unpermitted Work in California

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Yes, you can sell a California home with unpermitted work, but you have to disclose what you know about it. The state’s Transfer Disclosure Statement asks directly about additions, structural changes and repairs made without needed permits, and an "as-is" sale doesn’t erase that duty. Your choices are to get the work permitted after the fact, sell as-is with full disclosure, or price the home to reflect the risk. Start by pulling the permit history from the city or county building department.

This guide covers the disclosure rules, each option, how to look up permit records in the counties we serve, and how buyers’ lenders and appraisers treat unpermitted space. It’s general information, not legal advice. For a garage conversion or backyard unit, also read our guide to selling with an unpermitted ADU.

What California requires you to disclose

Most resales of single-family residential property are covered by the Transfer Disclosure Statement (TDS) rules in Civil Code sections 1102–1102.17. Section 1102 says any waiver of these requirements is void as against public policy. A buyer can’t agree to skip the TDS just because you’re selling as-is.

The TDS form itself, set out in Civil Code section 1102.6, asks you to flag two items in Section II.C:

• room additions, structural modifications, or other alterations or repairs made without necessary permits, and
• room additions, structural modifications, or other alterations or repairs not in compliance with building codes.

You answer from what you know. If you know a bedroom was added without a permit, or you suspect it because a permit search came back empty, say so and explain. Vague answers invite disputes later. For a full overview of the forms, see our California seller disclosures guide.

Sold within 18 months of buying? There’s an extra disclosure

Civil Code section 1102.6h applies when you accept an offer within 18 months after taking title, for offers accepted on or after July 1, 2024. You must disclose:

• additions, structural changes, alterations or repairs made since you took title by a contractor you hired,
• each contractor’s name and contact information, when the contract price exceeds the threshold in Business and Professions Code section 7027.2, and
• a copy of any permit you obtained for that work.

Who is exempt from the TDS?

Civil Code section 1102.2 exempts certain transfers. These include court-ordered sales such as probate sales, foreclosure-related sales, and many transfers by a fiduciary administering a trust or estate. There’s an exception: a trustee of a revocable trust who is a natural person and lived in or owned the home within the past year is not exempt. An exemption from the TDS form isn’t a license to hide a known problem, and other disclosure duties can still apply. Our probate sale guide covers what fiduciaries usually provide.

Your three options at a glance

These aren’t either-or. Many sellers disclose, price for the risk, and leave legalization to the buyer.

Option 1: Get a permit after the fact

Building departments can issue permits for work that already exists, often called "as-built" or retroactive permits. State law backs this up. Health and Safety Code section 17958.12 says that when there’s no permit record for an existing residential unit, the local building official may determine when it was built, apply the building standards in effect at that time, and issue a retroactive permit. The section says it restates existing law, and whether the official uses it is up to the local department.

What to expect:

1. Pull the permit history first. See the county table below.
2. Meet with the building department. Ask what plans, engineering or inspections they need, and whether walls or ceilings must be opened.
3. Budget for corrections. Electrical, plumbing, fire separation, egress and structural items are common.
4. Watch the calendar. A permit that’s opened but not finaled can complicate a sale. Ask whether you can finish before close of escrow, or disclose the open permit.

For older detached units and garage conversions, state ADU law has its own pathways. Our unpermitted ADU guide covers them.

Option 2: Sell as-is with full disclosure

Selling as-is means you won’t make repairs. It doesn’t mean you can stay quiet. Disclose the work on the TDS, attach what you have (permit search results, contractor invoices, photos from construction), and encourage buyers to inspect. A pre-listing inspection can help you describe the work accurately. Read our selling as-is guide for how the contract handles inspections and cancellation rights.

Option 3: Price for the risk

Buyers will value the home based on what they can finance, insure and use legally. Ask your agent to run the comparable sales both ways, with and without the unpermitted space, so you understand the gap. You can also request a home valuation to see that range.

How lenders and appraisers treat unpermitted space

The buyer’s loan program, not the seller, decides how much the space counts. Using Fannie Mae as an example:

• Additions without permits. Under Fannie Mae Selling Guide B4-1.3-05, the appraiser must comment on the quality and appearance of the work and its effect on market value.
• Accessory units not allowed by zoning. The same section lets the property remain eligible only if several conditions are met. The unit can’t jeopardize future insurance claims, the use must fit the neighborhood, and the report must show the use as noncompliant. The appraisal also needs at least two comparable sales with the same noncompliant use, out of at least three closed sales in total.

FHA, VA and portfolio lenders have their own rules, and the appraiser’s comparable sales drive the result. If the space can’t be credited, the appraised value may come in below the contract price. See our appraisal contingency guide.

How to look up permit history in the counties we serve

Permits are issued by the city if the home is inside city limits, and by the county if it’s in an unincorporated area. Permit Sonoma, for example, says permits inside city limits are handled by that city, with exceptions for well and septic permits.

We’ve also written county- and city-specific research guides for El Dorado County, Placer County, and Santa Cruz County. Fees and turnaround times change, so check the department’s current figures before you order records.

Compare what you find with the assessor’s record, the listing’s square footage and what’s actually built. Gaps between the three are what buyers and appraisers notice.

Getting it right before you list

1. Order the permit history and the assessor record.
2. Walk the home and list every addition, conversion and major system change.
3. Match each item to a permit, or note that none was found.
4. Decide: legalize, disclose and sell as-is, or price for it.
5. Describe square footage and room counts carefully in the listing. Use permitted figures, or label the rest clearly.

That’s how we prepare listings at Diamond. If you’d like a second set of eyes on your permit file, see how we approach selling your home or contact us.

Questions people ask

Is it illegal to sell a house with unpermitted work in California?

No. Selling isn’t illegal, but failing to disclose known unpermitted work can expose you to claims. The TDS asks specifically about work done without necessary permits, and Civil Code section 1102 makes waivers of the TDS void.

Do I have to disclose unpermitted work done by a previous owner?

You disclose what you know. If you learned about it from your own purchase disclosures, an inspection, or a permit search, include it and share the documents you have.

Can a buyer get a loan on a house with unpermitted work?

Often, yes, but the space may not count toward value. Fannie Mae requires the appraiser to comment on unpermitted additions and their effect on value, and sets extra conditions for units that zoning doesn’t allow. Other loan programs have their own rules.

What is a retroactive or as-built permit?

It’s a permit issued for work that’s already built. Health and Safety Code section 17958.12 lets a building official apply the standards in effect when a unit was built and issue a retroactive permit. Each department decides how to apply it.

Does selling as-is protect me from disclosing unpermitted work?

No. As-is means you won’t make repairs. Your disclosure duties still apply, and waivers of the TDS requirements are void.

How do I find out if work on my home was permitted?

Request the permit history from the building department that has jurisdiction. That’s the city for homes inside city limits and the county for unincorporated areas. In San Francisco, order a 3R report from DBI.

Will the buyer’s inspector find unpermitted work?

Inspectors often note signs of unpermitted work, but a home inspection isn’t a permit search. Buyers usually compare the permit history with what’s built, so it’s better to do that comparison yourself first.

What if I flipped the house within 18 months?

Civil Code section 1102.6h requires you to disclose contractor work done since you took title, the contractor names and contact information above a price threshold, and copies of permits you obtained. It applies to offers accepted on or after July 1, 2024.

Sources & notes

1. Civil Code §1102: scope of the TDS article; waivers void. Text reviewed through a public statute mirror.
2. Civil Code §1102.2: exemptions (court-ordered, foreclosure, fiduciary, spouse and family transfers).
3. Civil Code §1102.6: TDS form, Section II.C items on work without permits and not in compliance with codes. Form wording reviewed through a published copy of the statute.
4. Civil Code §1102.6h: 18-month resale contractor and permit disclosure.
5. Health and Safety Code §17958.12: retroactive permits using standards in effect at construction.
6. Fannie Mae Selling Guide B4-1.3-05: appraisal treatment of unpermitted additions and noncompliant accessory units.
7. Permit Sonoma, Records.
8. Napa County PBES, Public Records Search.
9. San Francisco DBI, Request a 3R Report. Check the current fee on the city’s page.
10. Placer County, Building Permit Research Request.

General information, not legal, tax or lending advice. Updated November 2026. Primary sources are linked in this guide.

Related: Unpermitted ADU guide · Selling as-is · California seller disclosures