Unpermitted Barns on Arizona Horse Property

Unpermitted barns on Arizona horse property cost people deals every month, and the maddening part is that a lot of those barns were never required to have a permit in the first place. The seller says there is no permit. The buyer hears the word unpermitted, pictures a bulldozer and a lawsuit, and walks. Nobody in the room knows which of those two situations they are actually in.

There is a real difference between a structure that was legally exempt and a structure that skipped a permit it needed. Knowing which one you are looking at is worth real money on both sides of the table.

Written by Kim Williamson, REALTOR® of REAL Broker, who has sold East Valley horse property for 24 years, from Queen Creek to San Tan Valley.

Because Arizona statute carves out agricultural construction from county building code requirements.

A.R.S. 11-865 is titled "Exemptions; exception." The statute exempts construction, and operation incidental to construction and repair, relating to irrigation and drainage ditches or appurtenances thereto of regularly constituted districts or reclamation districts, or to farming, dairying, agriculture, viticulture, horticulture or stock or poultry raising.

Stock raising is in that list. That is the reason a great many barns, loafing sheds, hay barns and working structures on Arizona acreage went up without a county building permit and were entirely proper.

The statute carries limits you should know. If the property owner wants to change the use of the property, the statute provides that the owner shall not implement a change endangering public health or safety. And the exemption does not reach everything: requirements still apply to activities involving changing, remanufacturing or treating human sewage or sludge for distribution or resale.

Two more things must be said clearly, because guessing here costs people money.

First, this is a county statute. Incorporated cities and towns run their own building codes and their own exemptions, and they are not obligated to mirror the county. A barn that needed nothing in unincorporated county may have needed a permit two miles away inside a town limit.

Second, exempt from a building permit is not the same as exempt from zoning, from setbacks, or from your septic and well rules. Different rulebooks, different offices.

If you want the full walkthrough of what does require a permit and where, start with barn, arena and outbuilding permits in Arizona.

The building department with jurisdiction over that specific parcel. Nobody else.

For example, Pinal County Building Safety says it provides inspection, plan review and investigative services to the unincorporated areas of the county and also to those cities that have entered into intergovernmental agreements with the county to provide building code services. So even the boundary of who reviews what is not always the line on the map you would assume.

This is a phone call, not a guess. Call the building department for the jurisdiction the parcel sits in, give them the parcel number, and ask what is on record. That is the only answer worth relying on, and it is free.

The permit question usually shows up as a financing and appraisal problem, not a code enforcement problem.

Here is the pattern I see. The barn is fine. The barn has been standing for eighteen years. But the appraiser has to decide what to do with a structure that has no permit history, and the lender has to decide whether the collateral supports the loan.

Fannie Mae's Selling Guide is more flexible on this than most people assume. It provides that loans secured by unique or nontraditional types of housing are eligible provided the appraiser has adequate information to develop a reliable opinion of market value. It states that it is not necessary for one or more of the comparable sales to be of the same design and appeal as the property being appraised. Where identical comparables are not available, the appraisal remains acceptable when the appraiser can determine sound adjustments for the differences between the comparables that are available and the subject property, and demonstrate the marketability of the property based on older comparable sales, comparable sales in competing neighborhoods, or the existence of similar properties in the market area.

The guide draws the line at the far end: a property becomes ineligible when the appraiser is not able to find any evidence of market acceptance, and the characteristics of the property are so significantly different that a reliable opinion of market value cannot be established.

Translated for horse property: the deal does not die because a barn lacks a permit. The deal dies when the appraiser cannot build a supportable case for value. Those are different problems, and the second one is the one to worry about.

This is closely related to why rural appraisals disappoint people generally, which we covered in why horse property appraisals come in low.

Get ahead of it. Every time.

Pull whatever permit history exists on the parcel before you list, not after an inspection objection. If a structure was built under the agricultural exemption, be able to say so plainly and point to why. If something genuinely skipped a permit that it needed, find that out on your own schedule and price or address it deliberately.

And disclose. Arizona sellers carry real disclosure obligations, and a known unpermitted addition is exactly the kind of item buyers and their attorneys look back at later. Our guide to what Arizona sellers must disclose when selling horse property covers the territory.

I will tell you honestly why I push sellers this hard on it. Roughly 82 percent of my business comes from referrals. That only happens when the people on both sides of a closing still feel good about it two years later. A surprise found in escrow is the fastest way to lose that.

Three moves, in order.

Call the jurisdiction with the parcel number and ask what permits exist. Ask your lender early, in writing, how they handle outbuildings without permit history on acreage. And have a structural professional look at anything you are relying on, because the real question is not whether a barn has a piece of paper, it is whether it is sound, safe and will still be standing after a monsoon.

A barn with no permit and good bones is a negotiation. A barn with no permit and a sagging ridge beam is a different conversation entirely.

Do not let the word unpermitted end a good deal, and do not let it slide by unexamined either. On Arizona acreage, an unpermitted agricultural structure is often exactly what the statute contemplated. Find out which situation you are in, from the office that keeps the records, before anyone panics.

Selling or buying a property with a barn of uncertain history? Talk with Kim before it becomes a problem at closing, or read more about selling horse property and buying horse property.

Are barns exempt from building permits in Arizona?

A.R.S. 11-865 exempts construction relating to farming, dairying, agriculture, viticulture, horticulture or stock or poultry raising from county building code requirements. Cities and towns set their own rules, so the answer depends on which jurisdiction the parcel sits in.

Does an unpermitted barn stop me from getting a loan?

Not automatically. Fannie Mae's Selling Guide allows unique or nontraditional properties when the appraiser has adequate information to develop a reliable opinion of market value. Eligibility fails only when no evidence of market acceptance can be found.

Does the agricultural exemption cover septic and zoning too?

No. A building permit exemption is not a zoning, setback, well or septic exemption. A.R.S. 11-865 also expressly keeps requirements in place for activities involving treating human sewage or sludge for distribution or resale.

How do I find out what permits exist on a property?

Call the building department for the jurisdiction the parcel is in and give them the parcel number. In Pinal County, Building Safety serves unincorporated areas plus cities that have intergovernmental agreements with the county.

Do I have to disclose an unpermitted structure when I sell in Arizona?

Arizona sellers have disclosure obligations, and a known unpermitted structure is the kind of material item that belongs on the disclosure. Handle it before listing rather than during escrow.