Before you buy or close on a residential or commercial property it is very important to check for any additions or improvement to the property made after the original construction. Are the any outstanding permits?
An open permit means that the work is not finalized and therefore there is no final building permit filed with the local planning and building department.
Open permits or building code violations will not be listed in the preliminary title report and they are not covered by the title insurance policy. It is important to clear up unpermitted work as soon as possible to avoid a delay in the closing. The buyer could also be responsible for any fines and for correcting the issue(s) – repair, removal or replacement – for any permitting or building code violations.
Buyers can also be held accountable for work completed without a permit and meeting building codes. This too can result in fines and result in the buyer having to fix and bring the property up to code and building standards. Then the buyer must file to obtain final inspection review and approval from the local permitting and building department.
Common improvements that require a permit can include new roofs, converting garages to air conditioned space, installing or replacing air conditioning units, installing or replacing fencing, installing generators, adding or moving plumbing fixtures, adding or removing windows, and any structural addition. It’s important to note that building codes and permit requirements can vary with every city and county.
Some home owners, property owners, builders and contractors don’t pull permits as they were unaware, or they feel they are not necessary, or they don’t want to pay fees or fear final inspection will mean a higher assessment leading to an increase in property taxes, or they blatantly disregard them. Unfortunately for the new buyer the requirement for the permit is passed on to each subsequent buyer of the property. That means if you purchased the property, you are now the current owner who is responsible for obtaining the permits and satisfying all current code requirements. You, not the past owners, are responsible for compliance.
So, what can a buyer do to protect themselves from open or no permits? Hire a reputable and experienced home or building inspector to inspect the property prior to your purchase. Have them look for evidence that additional work has been done on the property.
You can also hire a local real estate attorney or local title company to research building department records for any permitting activity done on the property and see if there are any open permits. Ask your closing agent to conduct an unrecorded lien search (lien letters) on your closing and that any issues that are found be fixed before closing. Buyers can also on their own, look up permit history of the property by contacting their local regulatory building and permitting departments.
As a buyer, you could also see if you have leverage to require the seller to get the required permits and the subsequent approval or CO prior to your closing. If possible, put language in your contract stating the seller is responsible for pulling a permit for the work and getting it signed off before the closing.
Should you have to work with a builder to close out open permits, hire an experienced contractor. They will be responsible for obtaining permits and closing out those permits before the job is completed. Always ask your contractor to give you a copy of the closed permit(s) for your files.
If you have questions regarding Permitting, contact 1st Trust Title in Davie, Florida today at 954-587-1033