Home Improvements
Mesa, AZ
Elynor bought this home near Phoenix, as a
"fixer upper". She hired a remodeling contractor, but when the contractor applied for permits,
the application was denied. The city inspector pointed out that a previous room
addition was done without a building permit. Worse, the addition wasn't built
to code - so it would have to be demolished.
Like many Phoenix area homes, this one was originally built with a carport. A
prior owner simply enclosed the carport to create the room addition. But the
foundation, framing and electrical wiring were inadequate.
Fortunately, Elynor had purchased an "Enhanced Owners Policy". As the most
comprehensive form available, the Enhanced Owners Policy insures against risk
that a residential structure, or any portion thereof, has been constructred
without a valid building permit.
In this case, the coverage was subject to a deductible of $519 and a maximum
liability of $25,000.
After receiving her contractor's estimate, her Enhanced Owners Policy paid $20,
271 to help her correct the violation.
MORAL
According to a recent study published by Harvard
University, Americans are undertaking residential remodeling projects in
unprecedented numbers. As building costs continue to soar, this trends seems
destined to increase. How much work is done without required permits is
anybody's guess.
This trend exposes buyers of resale homes to new risks. The title industry has
responded by adding new coverages to its policies. Once again, the best advice
we can give is that prospective owners and lenders should inquire, and make
sure they are getting the most comprehensive coverage available.