Unpermitted Improvements: What Texas Buyers and Sellers Need to KnowCan you sell a house in Texas with unpermitted work? Yes, but you have to disclose it. The Texas Seller's Disclosure Notice specifically asks about alterations made without necessary permits and that answer follows the house to the appraiser, the lender and the buyer's inspector.
Almost nobody sets out to do unpermitted work. It happens because people reasonably assume that replacing a thing is not the same as building a thing and because permit rules are set by each city, not by the state. The sentence I hear most is some version of "we didn't need one at our last house," and in Sachse, Wylie, Murphy, Garland and Rowlett, and again out in unincorporated county areas, the thresholds really are different.
So the only reliable answer to "do I need a permit" is the one your own city gives you. Here is what catches people and what it costs when it gets skipped.
The Permits People Forget
The City of Sachse states plainly that a permit is required for the construction or repair of any building, structure, plumbing system, electrical system, or mechanical system, and its residential list is a fair proxy for what neighboring cities want too. Using it as the yardstick, here is where homeowners get surprised.
Mechanical, electrical and plumbing, which is the biggest blind spot:
- Water heater replacement. The single most common one. People treat it as an appliance swap and Sachse lists water heaters right alongside new construction.
- HVAC replacement, even a like-for-like changeout.
- Electrical panel replacement or upgrade.
- New circuits, including the 240 volt line for an EV charger or a hot tub.
- Water softener installation, which comes up constantly here given our water.
- Gas line work, including running a line out to a grill or an outdoor kitchen.
- Moving or adding any plumbing fixture, which is what turns a bathroom addition or a relocated laundry into permitted work.
Outside the house:
- Roofing. After a hail season this is the one that gets skipped most, usually by someone who was not going to be here next month anyway. Worth reading alongside don't let a roaming roofer turn into an expensive mistake.
- Fences, which surprises people every time.
- Flatwork and concrete: patio slabs, driveway extensions, sidewalks. A new driveway approach also touches city right-of-way.
- Retaining walls, over 4 feet in Sachse.
- Patio covers, pergolas, arbors and carports, attached or freestanding.
- Accessory buildings, over 120 square feet in Sachse. That shed threshold is exactly the number that varies city to city.
- Pools and spas, plus the required barrier.
- Irrigation systems, which also require a licensed irrigator in Texas.
- Outdoor fireplaces, chimneys and fire pits.
- Solar, which carries its own separate set of title and lease complications I covered in solar panels and Texas home sales.
Inside the house:
- Garage, attic or patio conversions to living space.
- Removing a wall. Homeowners file this under cosmetic. If it carries load, or if there is wiring or ductwork in it, it is not.
- Foundation repair, which Sachse lists specifically and which in DFW usually wants an engineer's letter as well.
- Window replacement when the opening size changes or egress is involved.
- Any remodel that moves mechanical, electrical or plumbing, regardless of how cosmetic the finished result looks.
What generally does not need one: paint, flooring, countertops, cabinet replacement that does not move plumbing or electrical, and swapping a faucet or a light fixture onto an existing box. Generally. Confirm with your city before you rely on it.
What Unpermitted Work Actually Costs You
Four separate exposures, and they are often confused with each other.
1. Disclosure. Texas Property Code Section 5.008 requires a seller of residential property of not more than one dwelling unit to deliver a Seller's Disclosure Notice on or before the effective date of the contract. The statutory form asks, in these words:
"Room additions, structural modifications, or other alterations or repairs made without necessary permits or not in compliance with building codes in effect at that time."
TREC publishes its version as the Seller's Disclosure Notice, Form ID 55-1, effective 05/28/2026. Once you know, you disclose and knowledge does not expire because you would rather not have it.
2. The appraisal. This is where the myth is worse than the reality. Unpermitted work is not automatically disqualifying. Fannie Mae's Selling Guide says that if the appraiser identifies an addition without the required permit, the appraiser must comment on the quality and appearance of the work and its impact, if any, on the market value. So quality work in a normal-looking house often survives. Poor work now sits in writing in front of an underwriter.
3. Insurance. This one is worth a phone call rather than an assumption. Ask your own agent, in advance, how your carrier treats damage arising out of work that was never inspected. You want that answer before you need it, not during a claim.
4. Property taxes. Improvements the appraisal district has not recorded are not in your taxable value yet and districts commonly find them through permit data. When they do catch up, the homestead cap does not protect you from it, because the Comptroller defines a new improvement as one made after the most recent appraisal that increases market value and was not included in the preceding year's appraised value. New improvement value gets added on top of the capped amount.
Jeanie Marten Real Estate is a brokerage, not a law firm. Nothing here is legal, tax or insurance advice, and TREC rules prohibit brokers and agents from giving legal advice. For your specific situation, talk to an attorney, your tax professional, your insurance agent, or your city's building department.
If You're Buying
Your inspector is not a permit auditor. A general inspection is a limited visual survey of condition, not a code compliance review and not a permit history search which is one reason I keep pushing both sides toward pre-listing inspections.
Pull the permit history yourself, during the option period. Most DFW cities have an online portal and the ones that do not will take a records request. It is the only way to compare what the seller disclosed against what the city actually has on file.
Then look for the mismatch. A finished bonus room with no permit on record, a newer water heater with no plumbing permit, a patio cover that appears nowhere. If you find a gap, ask what the scope was and who did the work, then decide whether you want retroactive permitting, a credit, or out.
If You're Selling
Disclose it, then choose between resolving it and pricing it.
Retroactive permitting exists in most North Texas cities and is often the cleaner path. Know before you commit that it can mean opening finished walls so an inspector can see the work behind them. Ask the city what their process requires for your project.
Do not take a contractor's word for it. If someone tells you a permit is not needed, get that from the city. The exposure attaches to the property, which means it attaches to you, long after that contractor's phone number stops working.
And keep your paperwork. Closed permits, invoices, engineer letters, warranties. A tidy folder of permitted work is a real asset at the negotiating table and the cheapest one you will ever assemble.
Frequently Asked Questions
Do I need a permit to replace a water heater in Texas? Permit rules are set city by city, and in most North Texas cities the answer is yes. Sachse lists water heaters among the residential projects requiring a permit, as it does HVAC, electrical and plumbing work. Call your city before the plumber arrives, not after.
Will unpermitted work kill my buyer's financing? Not necessarily. Fannie Mae requires the appraiser to comment on the quality and appearance of unpermitted additions and their effect on market value rather than automatically rejecting the property. Well-executed work that matches the neighborhood frequently clears. Sloppy work, or work that affects safety, is a different conversation with the underwriter.
Can a city make me remove unpermitted work? Cities have code enforcement authority, and outcomes range from retroactive permitting and inspection to correction orders. It depends on the city, the code in effect, and what the work is. Ask your city's building department about your specific project, and talk to an attorney if the answer concerns you.
If You Found This Useful, Read These Next
- Listing Inspections Are Back: Here's Why That's Good News on Both Sides of the Table explains why finding this kind of thing before you list beats finding it during the option period.
- The Texas option period, what it costs and why you should not waive it is the window where a buyer does the permit research described above, and it is the reason that window matters.
If you are buying a house with work you cannot account for, or selling one with a project in the past you are unsure about, let's look at it before it becomes a negotiation. Visit MartenTeam.com or book a consultation.
Jeanie Marten Real Estate 972-414-0719 | MartenTeam.com
