Yes, she is legally obligated to disclose "latent" issues--or issues not readily visible to a buyer, like   a lack of permitting (and the accompanying non-code problems--which she is, or reasonably (i.e. logically) should be, aware of. She hired the plumber; she would know whether a permit was applied for and obtained; therefore, she had an obligation to disclose this. Her failure to disclose such a known issue may constitute fraud and provide grounds to sue her for the costs you incur.