Finishing A Basement Without A Permit: Is It Risky?

When you want to build a house and you have already bought all the materials and hired a team to build your house from the ground, you often don’t think of any possible problems with the law. And when you start to build a basement, you may not think of it as well.

But you should ask yourself a question: “Do I need a permit to build a basement?”. Because in most cases you do need a permit, actually. There may be serious consequences if you didn’t get a permit for a finished basement. 

Is it really risky to finish an entire basement without a permit? If it is so, will it have any consequences? If you are looking for answers to this question, then this article is written for you. 

A permit to finish a basement: do you really need it?

Actually, you do need a permit to finish a basement, in a lot of instances and a lot of states. For example, they may require a permit when you build a wall or even when you plumb the wall. You require a permit when you pursue some kind of formal remodeling or construction, and when you change the structure or design of your basement.

It is important to mention that each state and city may have its own requirement in the process of building a basement, so what you need to do beforehand is get to know which requirements your state has. But what about the requirements for a finished basement in general?

Let’s take a look at it carefully.

Basement finishing: detailed analysis

Basement finishing has a straight connection with installing a wall or getting a carpet. When you get a permit, the instances agree with your building plan of basement finishing, and with the materials that you use.

It means that the municipality has ensured that your finished basement is safe and that you use only safe building practices which are verified by building inspectors. 

A building inspector will ask a single question about the walls of your finished basement: for example, a kind of question, like, “What is behind the wall?”. Why? Because you have a permit for your finished basement. 

You may also require a permit, depending on the status of your basement building. If it is completely done, or if it is unfinished, or if you have already started installing the walls – all of these situations determine if you already need to ask for a permit or if it is too late.

When do you need a permit?

When do you require a permit for basement finishing and even for basement remodeling? You need a permit when you install a wall. Installation of a wall means that you cover a framed wall with drywall, and basement remodeling involves it, too. You also need a permit, when you are plumbing, setting electricity, installing the vent, or making the HVAC work.

The good news is that in most cases, painting the wall and setting the carpet doesn’t need any permit. Generally, all minor cosmetic additions and changes will not require a permit if it doesn’t change the whole structure of your basement or the accessibility of your finished basement. 

Do you finish a basement without a permit: illegal or not? 

Unfortunately, finishing a basement or building there is something that requires building permits is illegal. Building a basement without a permit is strictly illegal. If you don’t get a permit, you will face several serious law issues. You need a retroactive permit at least.

But it is important to mention that when you don’t get a permit to build and finish a basement is not particularly breaking the law – you are breaking a bylaw of the municipality that creates a building code. You cannot violate a building code.

What does a bylaw mean? It means that it is not a federal law, but actually, a local law, which is controlled by the local municipality. Canadian building code, for example, is the same, the bylaw there is also controlled by municipalities.

This is why knowing the bylaws of your state is so important – you can break it and may not know about it because, at first look, it is just a local law. And it may be fortunate for you – some municipalities may neglect these bylaws. But anyway, better safe, than sorry. 

So, as you can see, finishing a basement without a permit is practically illegal because you are breaking the bylaw. Answering a question, yes, it is absolutely necessary to get a building permit, and it is better done sooner than later.

Actually, when you get a permit, it is also good for you – you can be sure at some point that the building you are making is safe, and you can be not afraid that it all will fall apart two days later after finishing the basement. 

Do not build it without a permit.

You finished your basement without a permit: Consequences

If you haven’t even heard about the building permit on finishing the basement and have almost finished your basement, then yes, it is really risky to get several serious problems with the law. You should fix it as soon as possible. But now let’s figure out what problems should you expect to have, and which consequences your actions will have. 

You shouldn’t be worried about getting imprisoned and getting under arrest – these law violations don’t have such punishments. Jail is not the problem you are facing. It is so because the police are not involved in such building violations, and you will not meet any policeman in your house because of this violation.

But the problems with the law you can get because of this violation can still be quite tangible and serious. 

You will have to pay fines

Fines are the most common punishment for law violations, and failing to get a building permit for finishing a basement has this punishment as well. 

If you break the bylaw for the first time, you will have to pay fines. But instead, the municipality may submit you a retroactive permit. After that, you still will have to wait until a municipality approves your building permit. But it is only if you are a first-time offender.

The fine itself depends on the state you live in. It differs very much. For instance, in Baltimore County, Maryland, you will have to pay over $1,000 for this law violation. And on the opposite, you will have to pay only $200 if you live in Florida.

Also, the fine depends on the status of the building process of your basement. If you have built just something unimportant – then the fine will be law.

Fortunately, this punishment doesn’t include removing all the completed buildings in your basement – if everything goes the described way. 

Sadly, there may also be a requirement of removing all completed buildings. But we will talk about it later.

Removal of the finished building

As it said, this punishment for not getting a permit is possible. It is especially possible when you have done the building work incorrectly and violate serious building regulations, the kind of regulations that would not be approved anyway.

The municipality calls it “returning the basement to its former condition”. They require the absolute removal of the already finished basement, you will have to start to build the basement from the very beginning if you get a building permit after all.

You will have to remove it for a certain amount of time. If you don’t do it in time, then you will face new fines and problems with the law.

And unfortunately, all the charges of returning the basement to its former conditions will be paid only by you. You are liable for it and you have to obey.

The value of your house will be reduced

This will be especially painful when it comes to selling a house. The potential buyers have the right to require all the building permit enforced by the law, and the potential buyers may either suggest a much lower price or just refuse the whole deal of buying your house. And the buyer will be absolutely in their right to do it.

Why is it happening this way? It is so because when you don’t get a building permit, nobody can be absolutely sure that your house is safe for those who live there. You may be sure that you have done everything right, but if it is not approved and verified by the law, your arguments on this matter mean nothing.

By failing to get a permit, people who live in the built house are at a big risk for their lives. Something may happen, and they may die, and the whole fault for this will be on the person who built the house. 

This is why the value of our house may be very much reduced. 

Your insurance will be increased or you will have no coverage at all

If you failed to get a permit, this will affect a significant part of your life in your house – the home insurance in case of any disaster. That means that when a disaster happened and your building is destroyed, then the insurance company will not pay any cost of the replacement of the destroyed items if you don’t have your legal documents in order.

Even if the building cost you a fortune. If you don’t have a building permit, the insurance company will not help you at all. 

This is so because proper permits mean a lot to every insurance company. They value them as a guarantee for the safety of your work and of the fact that your house will actually survive some of the disasters. This is why they may not give you the right home insurance if there is no guarantee of the safety of your house verified by the law. 

This is the worst scenario. But other things can help you.

You can get title insurance, but the problem is that it will cost you much more than when you actually get a permit. Then your building will be saved and rebuilt after the disaster. 

Your house may be condemned

If you didn’t get a building permit and you finished your basement, but the inspector found out the work wasn’t accomplished correctly, then your house will be condemned.

What does the incorrectly done work mean? It means that your house has several serious damages and violations after the finish of the building. You can be sure that your house will be condemned if there is an infrastructure failure of black mold.

These damages have an actual risk for all of the people that live in the house. Their lives are in danger and this is why the inspector can make your house condemned.

Safety is first. That is why if you can fix all of the issues with home safety in time then the condemned status will be lifted. Even in this difficult situation, you have a chance to get everything back in control. 

Problems with mortgage refinancing

A permit is also needed when you need to apply for a new mortgage or refinance your current mortgage. When you have added another living space in your basement without a permit, then it may cause problems because some states will count this new living space.

This new living space will be added to the square footage.

Why is that important? Because mortgage lenders will ask you for this footage because they can lend you only based on recorded square footage.

This is why you may have problems when you apply for a mortgage without the correct square footage. You will probably get it, but there is a high chance that the result will not satisfy you.  The amount of the house appraisal will be reduced. Your mortgage refinancing is jeopardized.

So, these punishments for violating the bylaw are pretty much real and possible. Do not forget about it when you want to build a basement.

If you have already finished your basement, do you have a chance for a permit?

Fortunately, yes, you can get a permit even if you have already finished your basement. What you have to do is go to a local building services office. You can apply for a retroactive permit.

After municipal building inspectors came into your house and checked it all out after they insured you that everything is in order, or you need to fix something, then almost everything you need to do is done, if you have also finished basement renovation.

What is left is that you have to pay for any repairs, nobody else is liable for it but you.

And do not forget about the charge from the municipality. The entire process can cost you from $2,000 to $8,000.

After all of this, your application for a permit will probably be approved by a local building services department. After the approval, you will not be worried about any of the problems and punishments that are described above. 

Frequently Asked Questions

Do I need a permit to finish my basement in Iowa?

If you want to finish your basement, and you live in Iowa, then yes, you absolutely need a basement finishing permit. 

Do I need a permit to finish my basement in Wisconsin?

Yes, the local municipality in Wisconsin requires a building permit for finishing the basement. Apply for a permit as soon as possible if you have already started to build a basement. 

Do I need a permit to finish basement in Michigan?

Yes, Michigan authorities also require a permit if you are finishing your basement, involving cutting into walls, installing a wall, or other structural changes. 

Do I need a permit to finish my basement in Utah?

Yes, you need a permit. An unpermitted basement is illegal.

In conclusion: you need a permit, not problems with the law

If you are building a basement in your house, and you are close to finishing it, or if you make several serious structural changes, do not forget to apply for a basement finishing permit. Building a basement without a permit and without following building codes is strictly prohibited.

So, if you do not want to have problems with the law, if you do not want to pay a lot of money overall, you need to get a permit as soon as possible. It is better than paying fines or getting your house condemned.