There is always a question about what does an agent have to do regarding disclosing permit issues. If you are in a market with older homes, you can be pretty sure that there is much remodeling been done ..... much of it done WITHOUT a permit. California and several other states have used their lobbying clout to get a law passed where the agent is not legally required to go off-site to investigate the status of permits.
Agents will argue that they have no responsibility anyway because they are not contractors; how would they know about permits. If you believe that, you are RIGHT and WRONG. Before, I talk about why you might be liable, let's discuss a little about permits.
Permits: A permit is simply the homeowner asking the governmental agency's permission to remodel or upgrade their home. Most agencies charge a fee and this has become a very profitable profit center for them. Once the work is done, the homeowner (or contractor they hire), is supposed to notify the agency so that they can inspect to see that the work is done properly. This is typically called the sign-off or final inspection.
Transactions: In most states, a seller must disclose material facts which would affect the buyers decision to buy. Having permits and finals or not having them, would be considered a material fact. It is not uncommon for these permits to be given to the buyer or the agent or buyer picking them up at the governmental agency.
Potential problems: There are a few traps in this process for the Seller, the agents and the Buyer:
David Salvato Father of Three, Blogger, Builder and Repairman of stuff my kids break! All round happy person.