How To Check Permits On A House
Investing in real estate mostly entails buying a house to rent out or flip. This can be very exciting but expensive at the same time if the investor does not thoroughly inspect the house prior to purchase. As an investor, you have to check permits on a house before buying it, because if there are any open permits on the house it ends up messing up your investment. The open permits exist on a house if the previous owner did not close it by having the permit’s approval from the city.
Through this article we guide you on how to check for permits on a house.
What are the permits on a house?
The most common permit is a building permit which should be obtained if there is a construction or remodeling project. A building permit is a written approval issued by the city or county to construct a project. They are helpful in ensuring the safety of the work and its compliance with building, zoning and construction codes.
A permit is closed if and only if the work has been approved by the relevant authorities in most cases that would be the city or county authorities. Otherwise, in all regards it remains open.
Are permits always needed?
Not all the work done on a house requires permits; this depends on the jurisdiction in which the property is located. Therefore, there might be permits required for certain repair in a house that will call for scheduled inspections while the same repair will require neither scheduled inspections nor permits in order to be approved in a different locale.
This is the reason why highly experienced contractors should be the best option when investing in a house in any locale. These contractors have all the know-hows around permits. Although hiring such a contractor might be expensive it does not come equally close to the cost dealing with penalties or fines from unauthorized repairs and open permits.
Why should you check permits on a house?
We cannot stress enough on how much permits bring up a lot of extra costs that might cause you to stop any construction plans. House permits unlike a house ownership title are tied to the house and not the owner as is in the latter. This means that even if the previous owner still had pending permits all these are transferred to you as the new owner of the house.
How to Check Permits on a House?
There are three main ways of checking for permits on a house, this should be among the first things done when intending to buy a house.
- Online – Most cities have online portals for properties, if you express interest in buying a house check with the respective city. You can pull the permits on the portal and determine if they are open or closed.
- Phone – Choose to go all old-school if your city does not have an online portal, simply call up the right department and ask for all the information you need to know pertaining permits.
- Visit the town hall – if any of the above is inefficient, then walk into your town hall and inquire about the permits on the house.
What are the Risks of not Checking Permits on a House?
The risks of not checking the permits on a home property goes far beyond the extra costs incurred, there are more risks that will be incurred such as those mentioned below.
- Longer resale period.
If you purchased a property without checking on the permits it will stall the renovation process if you wanted to flip the property because of all the costs to close a permit. This will cause the house to have a longer resale period than was expected.
2. Responsibility to get the work done.
One important thing to remember about permits is that if the work done is not approved by the city, you will be required to pay to get the work completed or done. When investing in a property you have a budget for all the work that will be done, permits cause you to fall short of expenditure.
3. Responsibility to get the work removed.
The same way a permit can get the work done is the same way it can get removed. If a city fails to approve of the work done on a property, then it has to be fixed or removed to fit the city’s standards. This will cost you charges of hiring a contractor to get this done, reducing your profit margin.
How to deal with an open permit
After purchase of a house without any knowledge of the open permits on the property, here are the ways to deal with the open permits.
- Talk to the building code department.
Most of the time these are the right people to turn to as they will give you pointers to move you in the right direction. It will take you a little time to get the work fixed than choosing to seek it any other way.
2. Talk to the original contractor
Having a word with the original contractor will shed some light on how to close the original permit since he’s the one who did the work. This option is mostly favorable to work that is extensive and cannot be handled quickly.
3. Talk to the building inspector.
While it might be difficult to get in touch with the original contractor, the other best possible solution is to have a talk with the building inspector. With the experience he/she has they will be able to map out how best you can close the permits with as little expense as possible.
Permits Are Helpful
Despite the emphasis on how much an open permit can cost you, it is important to note that permits are helpful. The prime purpose of a permit is to ensure that work done on a house is approvable by the city’s legislation. Permits also protect the homeowners from contractors who might intend on ripping them off their money.
Remember to check out for any open permits on a house before purchase so that it can save you the hassle of additional administrative and physical work if found beforehand. In case you bought a property with open permits following the guidelines set out above you may be able to get the permit closed.
The Bottom Line
While doing your due diligence on a house of your interest always remember to check out for any open permits on the house. Through the use of any or a combination of the three methods of checking for open permits try to find out any open permits. If you missed out on the open permits during house inspections use any of the three methods mentioned to deal with open permits.
Open permits can be a drag to your investment as a whole. Once you use this article as a guide, you’ll be good to go in terms of looking out for open permits in any house you are interested in.
Adam Smith has spent the last 5 years in the Private Money Lending world helping real estate investors secure financing for their non-owner occupied real estate investments. When he’s not thinking about real estate, Adam is an avid Jazz music fan and fisherman.