Yes — in Montgomery County you can sell a house with unpermitted work by disclosing it under Maryland's property-disclosure law. Your three paths: disclose and sell as-is, pull a retroactive DPS permit before listing (often at double the normal fee), or price around space the appraiser won't count.
Quick Answer
Yes — in Montgomery County you can sell a house with unpermitted work by disclosing it under Maryland's property-disclosure law. Your three paths: disclose and sell as-is, pull a retroactive DPS permit before listing (often at double the normal fee), or price around space the appraiser won't count.
If you've finished a basement, added a bathroom, or bumped out the back of your house without pulling a permit, you're not alone — and you can still sell. Unpermitted work is common in older Bethesda, Potomac, and Chevy Chase homes, where decades of owners have improved spaces over the years. The question isn't whether you can sell. It's how you handle it so the deal doesn't fall apart at inspection, appraisal, or the closing table.
Selling a house with unpermitted work in Montgomery County comes down to three honest paths, and the right one depends on the scope of the work, your timeline, and how the appraisal is likely to shake out. Here's how each path actually works — and what Maryland law requires of you no matter which one you pick.
First, figure out what's actually unpermitted
Before you decide anything, get specific about what work was done and whether it was permitted. Pull your permit history from Montgomery County's Department of Permitting Services (DPS) — their online records show what's on file for your address. Anything that changed the structure, electrical, or mechanical systems of the home was supposed to go through DPS, and plumbing work runs through WSSC.
If DPS has no record of a permit for work that clearly happened — a basement that's obviously finished, or an addition that doesn't match the home's original footprint — treat it as unpermitted until you can prove otherwise. Permits pulled by a previous owner still count, so it's worth checking the full history rather than assuming the work was done off the books.
In this market, the usual suspects are:
- Finished basements — framing, egress windows, added bedrooms, and wet bars
- Additions and bump-outs — extra square footage on the main or upper floors
- Converted spaces — a garage turned into living space, or an attic turned into a bedroom
- Decks, sheds, and basement bathrooms — especially a full bath added after the fact
- Electrical and HVAC work — new circuits, panels, or relocated ductwork
Write it all down. A finished basement that's just drywall and paint is a very different conversation than a 400-square-foot addition on a slab. When you're selling a house with unpermitted work, the scope drives everything that follows.
Your three options for selling a house with unpermitted work
1. Disclose it and sell as-is. This is the most common route, and often the smartest. You tell buyers exactly what was done without a permit, you price the home accordingly, and the buyer takes it on knowing the situation. Selling as-is doesn't mean hiding anything — in Maryland it's the opposite. Full disclosure up front usually defuses the issue before it becomes a renegotiation later.
The catch is valuation. When space was added without a permit, an appraiser often won't count it toward your home's gross living area. A home you think of as a four-bedroom can get appraised as a three-bedroom, and a low appraisal can cap what a financed buyer is able to pay. That's the real cost of unpermitted square footage — not a fine, but a smaller number on the appraisal.
Here's what that looks like in practice. Say you finished your Bethesda basement into what functions as a fifth bedroom and full bath, but it was never permitted. A buyer loves the space and offers accordingly — then the appraiser measures the home, leaves the basement out of the gross living area, and the valuation lands tens of thousands below the contract price. Now the buyer has to bring extra cash or ask you to drop the price. Disclosing the permit status up front, and pricing to the square footage that will actually appraise, keeps that surprise from blowing up the deal two weeks before closing.
2. Get a retroactive permit before you list. Montgomery County does allow you to permit completed work after the fact. A licensed contractor inspects what's there, and DPS reviews it against current code. This preserves your home's value best, because once the work is legal and documented, the square footage counts and buyers stop worrying.
Go in with clear eyes, though. Retroactive permitting can mean paying roughly double the normal permit fee, and an inspector may require you to open up walls, ceilings, or flooring so the work can be inspected — sometimes rebuilding portions that don't meet current code. A basement finish can take several weeks to a few months to permit and correct. Since most buyers want to close within about 45 days, that timeline is the main reason many sellers choose to disclose and sell as-is instead.
3. Sell to a cash or investor buyer. If the work is significant, your timeline is tight, or you simply don't want to manage a permitting project, a cash buyer or investor will often take the home as-is and handle the permitting themselves. You'll usually trade some price for that convenience, but you skip the lender and appraisal problems entirely, since those buyers aren't relying on financing that the unpermitted space could derail.
What Maryland law requires you to disclose
No matter which option you choose, disclosure isn't optional. Maryland's property-disclosure law (Real Property § 10-702) gives you two choices on the Residential Property Disclosure and Disclaimer Statement: you can disclose — answering specifically about the condition of the home's systems and any known material defects — or you can disclaim, selling with no representations about condition. Even if you disclaim, you still have to reveal any known latent defect: a problem a buyer couldn't catch in a careful visual inspection that could threaten health or safety.
Unpermitted work can cross into that territory — think an added circuit that isn't to code, or a bedroom without proper egress. The safe move is to disclose what you know. For a fuller walk-through of the form and your obligations, see our guide to Maryland's seller disclosure rules. Hiding known unpermitted work is where sellers get into real trouble — buyers who discover it after closing can come back with claims for fraud or breach of contract, and you can be on the hook even after you've moved on. Disclosure protects you as much as it informs them.
It also helps to understand how buyers evaluate unpermitted work, because their lender, inspector, and insurer all get a vote. Insurers can raise premiums or decline coverage on work that was never inspected, and a buyer's lender may balk if the appraisal flags the space. Knowing what's coming lets you get ahead of it.
So which path makes sense for your home?
Start with scope and timeline. Minor, cosmetic work that an appraiser will still count? Disclose it and move on — it rarely moves your price in a market like Bethesda's. Added living space that a buyer's lender and appraiser will question? Now you're weighing the cost and weeks of a retroactive permit against pricing the home for what the appraisal will actually support.
Market conditions matter too. When inventory is tight and buyers are competing, unpermitted work is a smaller obstacle. When buyers have more leverage, they'll use it. Selling a house with unpermitted work is rarely a dealbreaker when you handle it right — getting the plan straight before you list is what keeps it from becoming one.
Your specific situation — the scope of the work, your timeline, and what comparable homes are doing right now — is exactly the kind of thing I walk sellers through before we settle on a price or a plan. If you're sitting on unpermitted work and trying to figure out the right move, reach out and we'll map it out together.