The Building Codes Division of the Oregon Department of Consumer and Business Services has put out a public information press release regarding new provisions to the Seller’s Property Disclosure Statement asking sellers to disclose whether they had building permits for any remodeling done to the house. The press release implies there is some new law that requires sellers to get building permits for any past remodeling done without permits. There is no such new law; however, that doesn’t mean building permits aren’t important.
The lack of a required building permit is a potential material defect because, if discovered, the building code officials can require the present owner to get the permit. That can mean considerable trouble and expense. There is, however, nothing new about that. Building permits have been required in most jurisdictions since the 1970s.
What has happened is that in many areas of the state, building code permit requirements have not been enforced. That has lead to a lot of remodeling without the required permits. Now building officials are starting to enforce the building code permit requirements and that is what is causing the problem.
What typically happens is someone buys a house and wants to do some remodeling, so he/she applies for a building permit. During that process, past remodeling is discovered by the building officials, who then demand the buyer get permits for the previous work causing the buyer unanticipated trouble and expense. The buyer then sues the seller or seller's agent or his/her own agent to try to recoup the expense.
To get ahead of this, the most recent version of the Sellers Property Disclosure Statement form asks the sellers if they have done any remodeling and whether, if they did, they had a permit. That doesn't mean permits are "required" to sell, only that sellers must disclose whether they did remodeling without one. Buyers, once they are aware of the problem, are likely to demand the seller get the permit. If they don’t, they could end up having to get the permit later when they do some remodeling or when they try to sell the house.