When you are looking to buy a house, or if you are selling yours, you may come into a situation where you are told the house isn’t up to code. If you have never faced this before, you might be wondering what this means and what you need to do about it (especially if you are trying to sell your house). Having a clear picture of what you might need to do to remedy the situation can help you move forward. Here is a better explanation of the definition of when a house isn’t ‘up to code’ and how to approach this situation:
What does it mean if a house isn’t up to code?
Building codes are in place to protect public health, welfare, and safety, with different rules by state and across the country. For example, the National Electric Code (NEC) covers electrical design, installation, and inspection of electrical equipment. This code is revised frequently, so it’s possible that if you are living in an older home there may be features of your home that need to be updated. Other issues that might come up are fines for not keeping a pool clean, neglected yard maintenance, and roof repairs. Some of the most common code violations are:
- Smoke alarms not properly installed
- Bathroom exhaust fans that vent into an attic instead of outside
- Electrical problems like inadequate amp circuits
One key detail to keep in mind for buyers is that an electrical or plumbing feature that isn’t up to code won’t necessarily stop someone from buying a house, as long as the home is functional. However, certain types of loans may require code violations to be remedied and insurance for a home that isn’t up to code may have a higher premium than a home with all of the Ts crossed and Is dotted. The best strategy is to take care of code violation issues up front before they turn into a bigger problem.
Do you need to disclose violations as a seller?
Most states will require homeowners to disclose a home’s known defects in writing and even if your state doesn’t require it, insights from real estate agents determine that it’s best to be upfront about code violations to avoid problems in the future (like a potential lawsuit). If you are a homeowner you may find that instead of repairing or replacing what’s outdated in an older home with older materials (like plaster walls), your policy may pay for repairs using current standard materials and techniques to get you up to code.
How to sell a house with code violations
If you can’t afford to make repairs on your home, you have a few options as a seller: You can offer buyers a credit at closing, or you can explain your interest in selling a house “as is” at a lower price to your real estate agent.
Code violations don’t mean that you can’t sell or buy a home, but being aware of the challenges can help you achieve your real estate goals and move forward, despite them.