I've heard this claim, but never heard of that actually happening. Can you imagine buying a house, then a couple years later it has an electrical fault and burns down, and there was unpermitted work so they refuse to pay for your house, but that work was done a decade ago by two owners ago? The current owner would be upset and rightly so. It isn't his fault.in complete agreement, but then there's that pesky insurance issue: "aha! no permit no pay"