Cash home buyers in Memphis often see properties with unpermitted work. Maybe it’s a garage conversion, a basement apartment, or an addition built without city approval. For many homeowners, this can feel like a problem too big to solve. But the truth is, you can still sell a home with unpermitted work—you just need to know the risks, costs, and disclosure requirements.
In this guide, we’ll explain Memphis permitting rules, how unpermitted work affects resale value, when disclosure is enough to protect you, and even give you a sample disclosure form you can adapt.
What Counts as Unpermitted Work?
Unpermitted work means any construction, remodeling, or modification done without the proper permits or inspections required by the City of Memphis or Shelby County.
Examples include:
- Finishing a basement into living space without a permit.
- Adding a deck, porch, or sunroom without approval.
- Converting a garage into a bedroom or rental unit.
- Electrical, plumbing, or HVAC work done without inspection.
- Structural changes (walls, additions) not approved by the city.
Memphis Permitting Rules
In Memphis, most construction projects—especially those affecting safety—require permits.
- Electrical, plumbing, and HVAC: Always require a permit and inspection.
- Structural changes: Anything affecting load-bearing walls or adding square footage requires approval.
- Cosmetic work: Painting, flooring, and basic repairs usually don’t require permits.
- Penalties: The City of Memphis can fine homeowners or require the work to be redone correctly if unpermitted work is discovered.
Risks of Selling With Unpermitted Work
1. Lower Resale Value
Appraisers may not count unpermitted square footage, meaning you can’t list your home as large as it actually is. For example, if you converted a 200-square-foot garage without permits, that space may not add value in the eyes of buyers or lenders.
2. Financing Problems
Buyers using FHA, VA, or conventional loans may be denied if the home includes major unpermitted work. This limits your buyer pool.
3. Legal and Insurance Issues
- A future buyer could sue if you didn’t disclose unpermitted work.
- Insurance claims may be denied if damage comes from unpermitted construction (like faulty wiring).
4. City Enforcement
If unpermitted work is reported, you may be forced to either tear it out or bring it up to code—both of which can be costly.
Costs of Fixing Unpermitted Work
If you choose to legalize unpermitted work, here’s what you might face:
- Permit application fees: $200 – $500 depending on scope.
- Inspection costs: Included with permit but may require updates.
- Correction work: If inspectors find issues, repairs can cost thousands.
- Architect/engineer approval: $1,000 – $3,000 for drawings or structural verification.
For many homeowners, especially those wanting to sell quickly, bringing everything to code isn’t practical.
When Disclosure Is Enough
In Tennessee, sellers are required to disclose known material defects and issues. That includes unpermitted work. By being upfront, you protect yourself legally—even if you’re selling the home as-is.
Disclosure may be enough when:
- The unpermitted work is minor (like a small deck or shed).
- You’re selling to a cash buyer who isn’t worried about permits.
- The cost of correcting the work would exceed the potential increase in sale price.
Selling As-Is With Unpermitted Work
Many Memphis homeowners choose to sell as-is instead of fixing unpermitted work. This is common with cash buyers and investors who expect to make updates anyway.
Pros of selling as-is:
- Avoids costly repairs and permit hassles.
- Faster closing timeline (7–14 days with cash buyers).
- Transfers risk and responsibility to the buyer.
Cons:
- Sale price may be lower since buyers factor in risk.
- Smaller buyer pool (mostly investors).
Sample Disclosure Form
Here’s a simple disclosure template you can adapt to protect yourself when selling:
Unpermitted Work Disclosure – Memphis, TN
Property Address: ____________________________
Seller(s): ____________________________
Buyer(s): ____________________________
The Seller hereby discloses that the property located at the above address contains improvements, additions, or modifications completed without the required permits or inspections by the City of Memphis/Shelby County.
Description of unpermitted work:
The Seller makes no representations or warranties regarding the quality, safety, or compliance of this work. The Buyer acknowledges receipt of this disclosure and agrees to accept the property in its current condition, as-is.
Buyer Signature: _____________________ Date: ________
Seller Signature: _____________________ Date: ________
This disclosure can be provided to buyers to ensure transparency and protect you from future claims.
FAQs About Selling With Unpermitted Work
Q: Can I get in trouble for selling a house with unpermitted work?
A: Not if you disclose it. Concealing it could create legal liability later.
Q: Do all buyers care about permits?
A: Traditional buyers and lenders do. Cash buyers are often more flexible.
Q: Can I price my home higher with unpermitted space?
A: No. Appraisers usually don’t count unpermitted square footage in official value.
Q: Should I try to fix the work before selling?
A: If the cost is small and it adds real value, yes. If the cost is huge, selling as-is may make more sense.
Q: Who is most likely to buy a home with unpermitted work?
A: Local investors and cash buyers who plan to renovate or rent.
Final Thoughts
Unpermitted work in Memphis homes is common, but it doesn’t mean you can’t sell. The key is understanding city rules, knowing the risks, and disclosing honestly.
If the cost to fix is too high, selling as-is to a cash buyer can save you stress and help you close quickly. By providing proper disclosures, you protect yourself while still moving forward with the sale