Q: I saw your recent article about making sure that renovations were done with permits and was reminded of our situation a few years ago.
My buyer was a real estate agent, and she checked with the county and found that I had not closed or finalized two building permits for a small addition I built. There was also some sort of open item for a fence installation as well.
All of this data was online and publicly available. The buyer correctly insisted that I clean these items up. I was able to get a final inspection on the two open building permits, but the county insisted that they had no way to close the fence issue. After numerous phone calls between me, the buyer and the county, the buyer accepted the house with the open fence issue.
Do you know why they couldn’t close that issue?
A: Thanks for your letter. When you own a home and decide to renovate or improve it, most municipalities generally require a building permit for the work that you’ll do. While municipalities may not require a building permit for cosmetic issues, such as painting, they do require building permits for building additions, plumbing and electrical work and a host of other items.
If you’re a homebuyer who wants to buy a fixer-upper, the savvy move is to check with the local municipality’s building department to see whether they require a building permit for any work you might consider. Given that much information these days is online, it’s easy to check whether a homeowner has open permits. Your buyer was smart, looked online and found two open permits attached to your home’s address.
Where a local municipality requires permits for work, the municipality expects that the homeowner will obtain a permit and pay the permit fee. If the homeowner does not obtain the building permit, the local municipality may cite the property owner for a building permit violation, require the owner to pay the permit fee, plus a fine and correct any work that does not comply with the municipal ordinances. In some jurisdictions, the local municipality may, but not always, go after a subsequent owner for these violations.
Sam recently represented a seller in a similar situation to your own. In his case, the buyer found out that the seller had obtained a building permit nearly 10 years ago for work on the downspouts and water discharge issues. The permit was never closed. But Sam’s client got lucky in that the company his client hired still had the records from the job, and they were able to prove the work was completed. That allowed the municipality to close out the permit and eliminate the issue.
As you might have gathered from your open permit issues, some open permits are easier to close out than others. For you to close out the permit, you had to contact your local municipality and have them send out a building inspector to ascertain whether the work done at the property not only matched the work described in the permit but complied with municipal building code requirements.
A word to the wise: If you obtain a building permit, make sure you contact the local municipality to have them come out, review the work completed and close out the permit as soon as possible.
Sometimes, open permits are so old that the building department might find it difficult to close them out. Either the original paperwork gets lost or the municipality has other, more urgent issues to address. In this case, your solution was perfect: have the buyer talk to the local municipality about the open permit, so that the buyer has some level of comfort with closing on the property. Knowing that the municipality likely won’t come after the buyer for any issues relating to the work you did under that permit allowed your deal to proceed.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)