Buying a house with unpermitted work in San Jose

The house you want in San José may have a converted garage, an added room or a new bathroom that was never permitted. That does not have to end the deal, but it changes what you should check before you close. This guide covers what the seller has to disclose, how to look up the records yourself, how lenders and insurers treat unpermitted work, and how to legalize it after you buy. Every rule below links to the City, state or lender source.

What the seller has to tell you

California's disclosure article applies to any transfer by sale of single-family residential property, except as provided in Civil Code 1102.2.¹ The disclosures must be made on a copy of the state's disclosure form.² The online statute does not print the form itself. The state's site notes that the Transfer Disclosure Statement appears in the published bill, Chapter 370, Statutes of 2020.² Read your copy of the form line by line, and ask the seller in writing about any room, garage or unit that looks added or changed.

If a seller skips a duty, the law does not undo the sale for that reason alone. But any person who willfully or negligently violates a duty under the article is liable for the actual damages the buyer suffers.¹ Whether that applies to your purchase is a question for a real estate attorney, not a contractor.

Check the records yourself before you close

Do not rely only on the seller's answers. Start with these public records:

1. Pull the permit history. The City's SJPermits.org search shows property information, permit and application status, permit histories, and imaged documents such as inspection records, plans and certificates of occupancy.³ You can search by address, APN or permit number.³ The City says this search lists all permits that have been pulled for a property.⁴ Compare that list with what you see in the house.
2. Look up Code Enforcement cases. The City lets you search active and closed cases from the past two years by address or case number, or on an interactive map.⁵ Results show the case status, the assigned inspector, the Council District and the case number.⁵ The complaint description is the reported allegation, not necessarily a confirmed violation.⁵ See how to look up a San José code case.
3. Check the County Assessor record. The Santa Clara County Assessor lets anyone view basic property information free, including assessed value, the parcel number, the address and parcel maps.⁶
4. Request the City's files if you need more. The City takes public records requests through its online Public Records Center.⁷
5. Walk the house with someone who builds. Look for a garage that is now a bedroom, a room behind the original back wall, a second kitchen, or new wiring and plumbing with no permit on record.

The City says building permits are typically required for any structural work and for electrical, plumbing and mechanical work.⁴ Planning permits are typically required for exterior work beyond cosmetic, including windows, walls, stairways and decks.⁴

How lenders treat unpermitted additions

Fannie Mae loans. If the appraiser finds an addition without the required permit, the appraiser must comment on the quality and appearance of the work and its impact, if any, on market value.⁹ For an ADU that zoning does not allow at all, the property can still be eligible if the lender confirms the unit will not jeopardize a future insurance claim and the zoning appraisal rules are met.¹⁰

FHA loans. HUD's handbook tells the appraiser to count a room addition or garage conversion as living area only if it is reachable from inside the house in a functional way, has a permanent and sufficient heat source, and was built to the design and quality of the main house.⁸ If it misses those tests, it goes on a separate line, and the appraiser must address the effect of inferior work on marketability.⁸ An ADU is never added to the main home's living area.⁸ If the property does not meet current zoning but the City accepts it, the appraiser reports it as legal non-conforming and states whether it could be rebuilt if destroyed.⁸

What this means for you: the square footage in the listing and the square footage the appraiser counts may not match. Your lender makes the final call on the loan.

Insurance

The California Department of Insurance's consumer guide to homeowners insurance does not mention permits at all.¹¹ We could not find a state rule on how insurers must treat unpermitted work. Ask your insurance agent in writing, before you close, whether the policy covers the added space. Fannie Mae's own ADU rule turns on the same question.¹⁰

Who is responsible after you buy

The City's guidance is written to property owners. It says it is illegal to do certain projects without first getting the right permits.⁴ The Contractors State License Board says construction done without a permit can expose a homeowner to additional liability and costs.¹² A contractor who skips a required permit can face CSLB discipline, including civil penalties of up to $8,000 per violation.¹²

We did not find a City or state page that says in plain words whether a buyer takes on a prior owner's permit problem. That is a legal question. What the City does say is that its Code Enforcement goal is voluntary compliance, and that uncorrected violations can lead to citations, per-day fines, abatement or receivership.¹³ If you inherit an open case, see what to do after a code enforcement notice.

Legalizing the work after you buy

The City invites owners to speak with a Code Enforcement Inspector about the permits needed or how to legalize unpermitted construction, at (408) 535-7770 or CodeEnforcementInformation@sanjoseca.gov.⁴ The path depends on what the work is:

• An added room or other addition: see legalizing an unpermitted addition.
• A converted garage: see unpermitted garage conversions.
• A separate unit built before 2020: San José's AB 2533 program is a penalty-free path to legalize an unpermitted ADU or JADU built or converted before January 1, 2020.¹⁴ You must prove the construction date, the unit must meet the state definition of an ADU or JADU, and any substandard conditions must be corrected first.¹⁴ The application includes the date evidence, a signed Substandard Housing Checklist, as-built plans, and the permit application and owner declaration.¹⁴ The City says the process typically takes 4 to 6 months from a complete application.¹⁴ See legalizing an illegal unit as an ADU.

If you are on the other side of the deal, see selling a San José home with code violations. For open cases tied to permits, see code violation and permit resolution.

How we help

We are a licensed general contractor, CSLB #1050108. Before you close, we can walk the house, compare what is built with the permit record, and tell you what the City is likely to ask for to legalize it. After you close, we coordinate as-built plans, price and do the corrections, and schedule the City inspections. The City decides what it will approve. All of our guides are on the San José code compliance page.

Common questions

Sources

• 1. California Civil Code 1102 to 1102.17 (Article 1.5): disclosures on transfer of residential property, including 1102(a) and 1102.13
• 2. California Civil Code 1102.6: the Real Estate Transfer Disclosure Statement form
• 3. City of San José: SJPermits.org Public Information Search
• 4. City of San José: Legalizing Construction
• 5. City of San José: Code Enforcement, Request Service and Check Status
• 6. Santa Clara County Assessor: Searching Records and Buying Maps
• 7. City of San José: Public Records Center
• 8. HUD Handbook 4000.1, FHA Single Family Housing Policy, Section II.D.3 (appraisal reporting)
• 9. Fannie Mae Selling Guide B4-1.3-05: Improvements Section of the Appraisal Report
• 10. Fannie Mae Selling Guide B2-3-04: Special Property Eligibility Considerations
• 11. California Department of Insurance: Residential Insurance Guide for Homeowners and Renters (updated May 2024)
• 12. CSLB form 13I-29: Building Permit Violation Referral
• 13. City of San José: Code Enforcement Process
• 14. City of San José: AB 2533 ADU and JADU Legalization Program

This page explains the construction side of San José's rules. It is not legal advice. The City and its inspectors decide what applies to your property.