In real estate circles, San Francisco is famous for the prevalence of “unwarranted,” or “illegal” rooms. Homeowners also sometimes tire of the city permit process, and elect to do kitchen/bathroom remodels or construct decks without pulling permits.

How does work without permits affect a home? Ultimately, the property’s safety may be compromised.

For major renovations—say, adding a unit or bedroom and bath—a homeowner will apply for a permit from the city. Besides serving as a revenue stream for the city, a permit warrants that the appropriate city inspectors have reviewed and approved electrical wiring, plumbing, etc., and that everything is up to code.

When your job is completed and approved by the city, the signoff ultimately goes on your property’s 3R, or building permit history, report. This is one of the key reports provided to future buyers in a sale. Completed permits give buyers peace of mind that any renovations or repairs that typically require permits were done according to building code.

Some work done without permit is safe and will never present any issues. However, if a homeowner decides to, for example, upgrade a foundation, a city inspector may spot the unwarranted room within the property. At that point, he or she can ask to see plans and permits for that room, ultimately requesting that you legalize it.

And if you decide to buy a house with an unwarranted unit and rent out that unit, you may run into problems if a neighbor decides to notify the city. In that case, inspectors would visit your property and potentially request that you dismantle the illegal unit. (Or legalize the property by creating two units, which may not be structurally possible.)

When evaluating properties, it’s important to check building permit histories to ensure that they match up to the details of the home. For example, if a kitchen was obviously remodeled sometime after the construction date of the property and there are no permits on file, it’d be a good idea to have your inspector flag any potential code items he or she sees. Of course, you can’t tear open walls, but some things are apparent code violators to a trained eye.

It’s challenging to put dollar amounts on unwarranted work. Instead, make sure you use the right comparative sales in your evaluation. For example, a “room down” or “bonus room” in a two-bedroom single-family home isn’t technically an official bedroom. (The dollar amount may be the difference between two- and three-bedroom homes values.) In this case, the best comps would be those with similar layouts (not three bedrooms).

In all cases, I don’t recommend omitting inspections—especially when unwarranted work is disclosed or suspected.