Here's the situation:

My daughter and son-in-law are in the process of buying a house (offer was accepted, closing hasn't happened yet). The house is everything that they are looking for, in a good neighborhood, etc.

The issue is that the current owner did a DIY construction where he finished off the basement. Problem is, he didn't pull a permit, so none of the normal codes inspections were done.

I haven't seen the work in person, but from pictures, it looks to be a pretty good job. Nothing looks unprofessional. Regular Home Inspection was done, and no major issues noted.

Assuming that everything that you can't see is up to code, what is the process to "get right" with the Authority Having Jurisdiction and get all the proper approvals and paperwork done? I assume that this is not the first time this has happened, is there a procedure in place that doesn't involve ripping out finished drywall and trim to see if the Romex was stapled properly?

Will this be an issue with their homeowners insurance? How about the tax assessor?

I don't want to be "that guy" and throw cold water on their plans for no reason, but I don't want to have them walk into a nightmare, either.

Any advice is welcome!