Recently I offered on a home in California and my offer was accepted. Everything was going along smoothly in escrow until I decided to check the permits of the home with the advice of the home inspector.

Upon checking the permits I found that 783 sq feet of the home of the 1973 sq feet home was unpermitted. This made the 5 bedroom 3 bathroom home, permitted only 2 bedrooms and 2 baths and minus a living room.

I proceeded to tell the owners who are real estate license holders and own the home through a cooperation that bought the home through a forclosure. They seemed to be extremely defensive telling me to prove that it is not permitted. I told them check the city records themselves and the tax accessor.

I then hired a permit specialist who gave me an estimate of what it would cost to get the property up to code. The estimate was 32k to 54k. I informed the sellers of this they said they would only come down 20k. I thought this was unacceptable.

I informed them I believe this to be a material fact and it would be a burden on me finanically and physically to have this much construction going on while I was living at the property.

They have since relisted the property on the MLS as a 5 bedroom 3 bathroom property with the disclaimer that buyer to verify all permits. I think this is illegal since they now know that the property is not permitted and that a very large percent of the property is not permitted and it would be extremely expensive to permit it. I of course can move on but this seems illegal,immoral, and unethical. Am I wrong or can this declaimer really protect them? They seemed to be very careful in acting like they did not know about the permits and did not believe me. My broker informed them as well.

Thanks for your time.