Purchasing a home in a historic district and the seller has revealed they never obtained permission for the patio they added in 2010

location: Cincinnati Ohio

My fiancé and I are attempting to purchase our first home. We fell in love with a beautiful older (1889) home. We have already done the following:

• Toured the property
• Obtained mortgage pre-approval from a lender
• Placed an offer and had it accepted by the seller
• Signed a "Contract to purchase" (Which EXPLICITLY states that the home IS NOT in a historic district)
• Had an inspection performed
• Issued a "Notification of defects" to the seller
• Paid "Earnest Money" to realtor
• Received defect remediation documents (invoices, pictures, etc) from the seller
• Arranged for owners title insurance as part of closing costs

During our attempt to obtain home owners insurance we were notified by the insurance broker that the home IS within a historic district. We did some research to verify and they are correct, unbeknownst to ourselves, our realtor, the sellers, and the listing agent; the home IS within a historic district.

We are set to close on this home in 5 days. This is an unwelcome surprise. Not only does this affect future potential plans for the addition of a detached garage or external cosmetic changes, the seller had an outdoor patio added in 2010. When asked, the seller revealed that they DID NOT obtain a "certificate of appropriateness" to build this patio from the Cincinnati Historic Conservation Board (per the guidelines seen here: https://www.cincinnati-oh.gov/planning/historic-conservation/local-historic-designation/ )

My fiancé and I are worried that if we purchase the home, we are legally responsible for this unsanctioned addition. The city would be within its rights to fine us, or even mandate the removal (at our own cost!) of the patio. We have a call scheduled tomorrow with our realtor to discuss the ramifications of this discovery so close to our intended closing date.

What should we be aware of going into this conversation? Is this as huge a deal as we're fearing? We really don't want to but; Is this legal justification enough to walk away from this closing and have our earnest money returned?

We're happy to approach the Cincinnati Historic Conservation Board and attempt to obtain appropriate approval for this addition, but with closing coming up in only 5 days we wouldn't have enough time to know for sure that they'd approve it.

Thanks for any help!

EDIT -
Lots of people are advising reaching out to a local real estate attorney to discuss this. I'll look into that.

But,

The more I think about this... Can the listing agent even proceed with this sale? Can he continue facilitating the sale of this property if he KNOWS there have been unsanctioned additions made to it?? Feels like a liability thing for him.

submitted by /u/Jack_T_Chance
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source https://www.reddit.com/r/RealEstate/comments/1vztban/purchasing_a_home_in_a_historic_district_and_the/