Selling a House with Code Violations in Indiana
A code violation usually starts with a notice that names the problem, the office, and a deadline. If a violation is not corrected by the deadline in the notice, the city or county may pursue fines under its local ordinance. Where a unit has adopted Indiana's Unsafe Building Law, it can also do the work itself and collect the cost through the property tax bill. Many financed buyers will hesitate to make an offer while violations are open.
If you own a Southern Indiana property with open violations, such as unpermitted work, structural deterioration, or yard citations, a direct as-is sale is one option to compare with repairing and listing.
Common Code Violations and Repair Costs
Much of Southern Indiana's housing is decades old. About 35% of homes in Floyd County and about 28% in Clark County were built before 1970 (ACS 2024 1-year estimates), and older homes often have systems and additions that no longer meet current code.
Repair costs vary widely with the home, the violation, and the contractor. Get written quotes from licensed local contractors, and ask the code office what work and permits it will require, before deciding whether to repair or sell as-is.
Homes built before 1978 have an additional federal requirement: sellers of most pre-1978 housing must give buyers the federal lead-based paint disclosure and EPA pamphlet, including on cash sales (EPA).
Fine amounts are set by each city or county ordinance. Indiana law caps a local ordinance fine at $2,500 for a first violation and $7,500 for a second or later violation (IC 36-1-3-8). Under the Unsafe Building Law, a hearing authority can impose a civil penalty of up to $5,000 for willful failure to comply with an order (IC 36-7-9-7). Ask the code office for the exact amounts that apply to your notice.
If your property has received a Notice of Violation or an unsafe-building order, note the deadline and call the issuing office promptly.
What Indiana's Unsafe Building Law lets a city do
Indiana's Unsafe Building Law (IC 36-7-9) applies in Indianapolis/Marion County and in any city, town, or county that has adopted it by ordinance. Where it applies, the enforcement authority can:
- Issue an order of repair or rehabilitation: requiring the owner to bring the property into compliance within a set timeframe
- Order the building vacated: meaning no one may live in or use it until the order is lifted (often called a red tag)
- Order demolition: after notice and a hearing, if the structure is beyond reasonable repair
- Perform the work and recover the cost: if the owner fails to comply, the authority can do the work and recover its costs through a judgment lien or a special assessment (IC 36-7-9-13.5)
These costs can take priority over existing mortgages in certain circumstances; under IC 36-7-9-13.5 they are placed on the tax duplicate and collected like delinquent taxes. That can reduce net proceeds at any sale.
Who Enforces Code Where You Live
Who enforces depends on where the property is: a city or town code or building office inside city limits, and the county inside unincorporated areas. Jeffersonville, for example, handles code enforcement through the Building Commissioner's office. The notice you received names the office and the deadline. Call that office to confirm what is open on your property before you sell.
Properties Under a Vacate Order
When a building is ordered vacated, no one may occupy it until the violations are corrected and the order is lifted. A property under a vacate or demolition order is hard to sell to a buyer who needs a standard mortgage, because the home may not meet lender condition requirements. A direct buyer that is not using a loan can review it, subject to the order, title, and closing requirements.
Indiana disclosure requirements (IC 32-21-5)
Under IC 32-21-5, most sellers of residential property must complete the state disclosure form; some transfers, such as court-ordered and certain fiduciary sales, are exempt. The Indiana Seller's Residential Real Estate Sales Disclosure form asks, among other things, whether you know of violations of zoning or building codes, whether you have received notices from any government agency affecting the property, whether there are structural or foundation problems, and whether substantial additions or alterations were made without a required permit. Answer based on what you actually know.
Telling us what you know up front keeps the deal straightforward. Your disclosure obligations still apply, so answer the state form honestly and ask an attorney if you are unsure how to answer a question.
Comparing a Traditional Sale and a Direct Sale
What Happens to Municipal Liens at Closing?
Recorded liens, including code enforcement liens, are typically paid from the seller's proceeds through the title or closing company so the buyer receives clear title. Your settlement statement lists each payoff.
If liens exceed the property's value, ask the city or county whether it will consider a reduced payoff. Some local governments have a process for this and some do not. Roger can tell you whether that is realistic for your property.
How Our Process Works
- Call (502) 528-7273 or fill out the form above: tell us about the property and the violations, which notices you received, how long they have been open, and any liens or fines you know of.
- We research the violations: we review available code enforcement and lien records to understand what is open.
- Written offer after review: any offer considers the property's condition, known code record, title, liens, repair and resale costs, and other closing requirements.
- Closing timing: the date depends on ownership, title, payoffs, liens, signatures, and any lender or court requirements.
- After closing: the buyer takes responsibility for the repairs, permits, and inspections described in the contract.
Areas we serve
We review houses with code violations throughout Southern Indiana:
- New Albany, Jeffersonville, Clarksville and Sellersburg (Clark and Floyd counties)
- Charlestown, Scottsburg, Salem, Corydon, Palmyra and Borden
- Clark, Floyd, Harrison, Scott and Washington counties
- Louisville metro area: see our Louisville page
Frequently Asked Questions
No repairs are required from you before an as-is sale. Recorded fines and liens are handled through the closing, and any order or notice requirements still apply, as described below.
A property under a vacate order can be difficult to sell to a buyer who needs a loan. A direct buyer that is not using a loan does not need lender approval, but the order, title, and closing requirements still apply. Tell us about the order so it can be accounted for in any offer.
Ask the city or county whether it will consider a reduced payoff. Some local governments have a process for this and some do not. Call us at (502) 528-7273 to discuss whether a sale is realistic for your property.
Often, yes. Unpermitted additions are common in older homes. The cost of permitting or removing the work is considered in any offer. In most cases you do not need retroactive permits before selling to us. If the property is under a code or unsafe-building order, tell us so we can account for it and help you meet any notice requirements.
Where Indiana's Unsafe Building Law applies, an enforcement authority can order demolition if a structure is beyond reasonable repair, but demolition orders come with a notice period and a hearing (IC 36-7-9-5). If you have received an order under the Unsafe Building Law and have not completed it, Indiana law requires you to give the buyer full information about the order before you agree to sell. Within five days of signing, you must also send the enforcement authority the buyer's name, address, and phone number and a copy of the sale document (IC 36-7-9-27). We can help you gather that paperwork.
Generally, yes. The Indiana disclosure form asks whether you know of violations of zoning or building codes and whether you have received government notices affecting the property. Answer honestly based on what you know, even in an as-is sale.
Closing timing depends on ownership, title, payoffs, liens, signatures, and any lender or court requirements. Roger proposes a date only after reviewing those details.
Related guides
- Can you sell a condemned house in Indiana or Kentucky?
- Selling a house with unpermitted work in Indiana
- Selling a fire damaged house in Indiana
- We buy houses in Jeffersonville and Southern Indiana
General information only; not legal advice. Local ordinances and orders control; confirm requirements with the issuing office and an Indiana attorney.