The Meaning of a Home Not Being Up to Current Building Codes

Even if you’re dimly aware of housing codes, you may assume that making a home to code was the builder’s job and isn’t relevant now, years later as you consider whether or not to sell your home as-is. Whether you are buying new construction or resale home, building codes matter.

Many families don’t actually discover the existence of code violations in their homes until they’re in the thick of a real estate transaction or talking with a professional who is about to do some work for them.

If you hear “not up to code,” you might see dollar signs flash in your eyes, but take a deep breath. While some code violations are costly to remedy, others don’t even really have to be made if the home is safe and sturdy.

To understand when not being up to code is a problem, let’s look at the point of codes, how they are used, and when code violations matter for a real estate transaction.

The Goal of Building Codes

Building codes are complicated documents, but they have a noble purpose. By creating a thorough building code, municipalities like cities and towns can hold all builders to a common standard for new construction.

When they build a home, they know that it will be inspected by someone very familiar with the codes, which creates a motivation to do the most important parts of the work well. These codes focus on choices in the building process that affect the safety and the structure of the home. Different systems within the building have to work well together without creating possible fire or water damage hazards.

At the national level, codes like the National Electrical Code may focus on industry-wide requirements that help create a consistent standard for how, in this case, electricians will maintain safety and functionality in electrical systems.

These codes are updated often because new materials and standard practices come into common use. However, it’d be too expensive, in many cases, to replace perfectly functional electrical systems as soon as a slightly safer and better system was available.

While many local building codes will have common ground, there may be challenges like steep terrain or extreme weather that prompt particular building codes to be put in place. That being said, there is also just variation in what is considered standard: small variations in the building code aren’t always known or important to average homeowners.

However, professionals working in that area of expertise should be well-versed, since they have to have their projects inspected and permitted under that building code.

Building Codes in Practical Use

While new construction is up-to-code if the building inspector has given it a certificate of occupancy, the code can change quickly. Revisions to code happen all the time, so even a 10-year-old house could be not quite up to code because of an added requirement in those ten years.

Remember, not all code changes are a sign that the past code contained a safety hazard. It may just mean that a more inexpensive, functional, or safe material or process has gained popularity to the point where it is the new standard going forward.

When major new renovations or additions are made to homes, the permitting process is in place to make sure that this particular aspect of the building is held to current code standards.

That being said, as the decades pass, you may accumulate code violations that are actually considered dangerous rather than just an old way of handling this aspect of renovation. These code violations are more likely to be noticed by a home inspector, not because of the code itself, but because of the danger or hazard, it presents.

Smaller projects that don’t require a permit in your area can also create a code violation. For instance, you don’t need a permit to install a new fire alarm system, but if you install the alarms in the wrong locations, you may be in violation of particular aspects of the building code, since they suggest ideal locations for fire alarms.

Basically, there are a few different kinds of code violations, such as small details that should be handled any time a city building inspector is going to be checking out the work.

There are also code violations that are hazardous to the home resulting from shoddy workmanship or a lack of knowledge of the safest practices. Finally, there are safe practices that have held up over time but which are no longer the common way to make a given repair or construct an aspect of the house.

Some of these code violations can impact a home sale, while others may pass completely unnoticed.

Code Violations and Your Home’s Sale

If you hear from a professional or your real estate agent that your home “isn’t up to code,” don’t panic. You can still move forward with the sale! Lots of homes sell with full understanding that a few items aren’t fully up to code.

Most general inspectors who would perform an inspection when your home is under contract aren’t going to come back with a laundry list of local building code violations that are focused on nit-picky details. Rather, they’re looking for things that are dangerous, out-of-date, or in need of maintenance or repair.

If those items also make your home not “up to code,” that could be an additional source of concern, but generally, they’re not trying to find code violations, just needed maintenance and repairs that the buyers need to know about to make an informed choice. They also tend to mention which things are most urgent versus things that aren’t ideal but are mostly to inform the buyer.

If your home inspector discovers a major issue, whether it is a dangerous element of the house or another kind of needed repair, there are a few options to salvage the sale.

Offer to Make Repairs

You can usually offer to make the repair and bring that aspect of the house “up to code,” meaning that any changes you make will be evaluated as fully complying with current building standards. This offer can be expensive for you, but it does help your motivated buyers feel confident that they are getting the home they wanted.

You can also lower your asking price or offer a credit toward closing costs in exchange for buying the home without the repairs being made. Some buyers will find this to be a more attractive option, especially if there isn’t urgency behind the repair.

By just lowering the price, you give them the option to make the repairs at a time that suits them and with their chosen repair professional.

Final Thoughts

Finally, you can also consider different pools of buyers if you have code violations. Depending on what kinds of violations they are, they may be irrelevant to wholesale buyers or house flippers who already intend to do major renovations in hopes of gaining a higher price from a later buyer. By working with all potential buyers, you may find someone who doesn’t see the code violations as a liability.

The main takeaway is that finding out that your home isn’t up to code doesn’t have to be a shock or a scary possibility. Instead, you want to learn what kinds of dangers or hazards are behind that discovery and decide whether it’s best to get the repairs done immediately for safety or whether that code is simply a little newer than the standards used on your home.

About the author: The above article on the meaning of “up to code” was written by HomeLight. HomeLight provides excellent information for buyers and sellers to make sound business decisions in the real estate field.