Most homeowners will at some point renovate or repair their homes. Many homeowners know that for certain types of work, whether the work is performed by the owner or by a contractor, a building permit is required from the City. If a homeowner is ever in doubt about what types of work require a building permit, that information is readily available from the City. What many homeowners and potential homeowners do not know about, is the increasing issue of “open permits” being discovered during the closing process.
As part of the title search and examination that is done when a home is purchased, “open permits”, permits that were “pulled”at the City, but which were never closed out, are often found. What does this mean exactly? As part of the permit process, inspections are done by the City at different stages of work. After each inspection the building permit card (the card that should be displayed at the job throughout its duration showing that a permit has been pulled) is marked by the inspector indicating whether or not that phase of work “passed” or “failed” inspection. At the completion of the job, and after the final inspection is completed, the permit is “closed”. The card should be marked as such and the closure should be recorded in the City’s records by the City inspector. However, sometimes, a final inspection is not made (the contractor or owner may neglect to call for one) or it is made and there is an error in the recording procedure at the City. Mistakes do happen. Later on when an owner is in the process of selling the property, “open permits” will be revealed in the title search process. The work may have been completed satisfactorily, but without a record, the sale is going to be delayed. An educated buyer will be reluctant to take property with “open permits” and if a lender is involved in the deal, the lender may hold up the purchase over this issue.
How can a homeowner protect themselves? When dealing with a contractor, or anyone who is performing work for you that requires a permit, make sure to question them on the “final inspection” to insure that it does occur. If you are doing the work yourself, then remember to call the City. When the final inspection is completed, keep the original building permit card, or a copy, in case there is an error along the way. When an “open permit” is found during a title search, if the owner can produce the “finaled” card, this will speed up the process of correcting any error and thereby speed up the closing. Without a copy of the card, if the City does not have a record of the final inspection, work may need to be re-inspected before the property can be sold.
The moral of the story…be vigilant when doing renovations or repairs to your home that require a building permit. Don’t just pull a permit, but make sure that permit is properly closed out and keep a record in your files. It will make your life simpler come closing time!