WHAT IS AN UNPERMITTED HOME?

Here's some questions (with answers) Big Island real estate agents frequently get about unpermitted homes on Hawaii Island.

What is an unpermitted structure?  Basically, it’s any structure built without the building permits that would normally be required. Not all structures require permits, such as certain buildings for agriculture use on land that is zoned agricultural (AG).  But for the purposes of this blog, the term “unpermitted” refers specifically to structures that were built without finalized permits with the intent of human habitation, in other words, a house.  This blog does not address homes that can be moved, like tiny homes on wheels, because those are subject to federal and state licensing requirements that pertain to motor vehicles or towing.

Why are there so many properties with unpermitted homes on the Big Island?  There are many reasons people choose to forgo obtaining building permits:  to avoid property taxes, onerous building codes, high construction costs, and other reasons.  Some unpermitted structures are little more than shacks, others are beautiful custom homes that meet or exceed building code requirements. Another reason why there are so many unpermitted homes on Hawaii Island is that enforcement is primarily complaint driven.  

Should I consider buying or building an unpermitted home? Virtually all the inquiries we get regarding properties with unpermitted homes are from people who see a listing and are excited about the low price point of the property.  But there are reasons why there is downward price pressure on unpermitted houses:  they do not qualify for traditional mortgages, they can be expensive or impossible to insure, they may be prohibited by HOAs, and they run the risk of future county enforcement actions.  If one is considering the purchase of a property with an unpermitted home they should consider moving forward with the mindset that they are buying land.  In some cases it is possible to buy such a property and build a fully permitted home on it, and the unpermitted structure can be converted to agricultural use if it is on AG land and not subject to future enforcement action.  A good real estate agent won’t recommend building an unpermitted home because if you want to sell it later, you’ll have a smaller pool of potential buyers and also could be subject to enforcement action. In some cases, land with unpermitted houses can be financed and/or insured. We can recommend people who specialize in these services

What about unpermitted additions or modifications?  Sometimes you may see a listing where a permitted home has an unpermitted addition. For example, a carport or bedroom may have been added and permits were never obtained for the additions. If the additions are not too extensive, traditional mortgages are usually available, but the value of the home is based on what is permitted. Your lender or mortgage broker will order an appraisal for the purchase.

Can I buy an unpermitted home and get permits for it?  Can I live on my land in a tiny home on wheels?  Can I convert my house to AG use that doesn’t require permits? Unfortunately, there are no easy answers to these questions, and the answers change over time. We recommend patiently contacting the county building permit office and inquiring with them directly and getting answers in writing.

Will you list my unpermitted home for sale?  YES! Per MLS rules the property will be listed as land and transacted accordingly, however we will conduct comprehensive market research to assess comparables, arrange staging if needed, take photographs, and market the property with the same level of dedication as every home we list.

DISCLAIMER

Dayna Robertson, REALTOR #RS-85517, and EXIT Realty Island Living are not affiliated with, endorsed by, or connected to Hawaii County, the State of Hawaii, any building/permit departments, or government agencies regulating construction, zoning, permits, or real estate disclosures. Information on this page about unpermitted homes, additions, risks (e.g., financing, insurance, enforcement, resale limitations), and related topics is for general informational and educational purposes only, based on common Big Island real estate experiences and practices. It is not legal, financial, or professional advice. No representations or warranties are made regarding accuracy, completeness, current regulations, or outcomes. Unpermitted structures carry significant risks that vary by case; enforcement is often complaint-driven and subject to change. Use at your own risk. For official permit status, violations, disclosure requirements, zoning, or enforcement: contact Hawaii County Building Division or Planning Department directly and request written confirmation. Consult qualified professionals (e.g., attorneys, lenders, insurers, surveyors) for property-specific guidance, transactions, or decisions.