Should I pull Permits?!?!

Member since 2023 · 1 post · 0 votes

Hello all,

I am new to the real estate business and I am just starting to renovate a 4 br, 3.5 bath in the Arizona. I am running into some maybe "ethical" dilemma. I have talked to 2 general contractors in which they stated that for interior work of the house without adding square footage to the home, it would not make sense to delay renovations to pull out permits. I called the county and they say that I am supposed to pull out permits for adding rooms, electrical work, plumbing, etc; however, the GC I'm working with says they have never had a problem with passing inspection after renovating without permits bc they use all original electric wiring, plumbing etc and do not change any of that. Can someone please advise me on the right thing to do? please and thank you.

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Doug SmithPro Member

Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes

Yes. A thousand times yes. Get red-tagged just once and you'll understand. Half-a$$ing a renovation will cost you more in the long run. Just do the job right up front. Pull the permits for the things that require permits...roofs, A/C, plumbing, etc. If you want to paint yourself, that's your call, but pull the darn permits on the stuff that requires it.

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Susan ThelenBusiness Member
Real Estate Agent · Mesa, AZ · Member since 2020 · 91 posts · 39 votes
3y
Hi Ronald, this is a tough one. I would find out what the ramifications are if you go ahead and do the work without permits. Based on what these contractors are saying it does not seem like it is an issue. I would try to talk to 2-3 more contractors to see what they say. Good luck!
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Chris Merchant
Member since 2023 · 216 posts · 133 votes
3y
@Bruce Woodruff can you offer some insight on this.
I would say pull the permit, if somehow the county finds out you did unpermitted work there is a chance (they do around here in certain cities) they make you rip out the work or "open" it so they can go through and inspect at the various stages as they would have if permitted plus they will make you pay the permit fee and most likely slap you with a hefty fine. Being an investor and not a homeowner they will probably be a little more harsh on you.
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Michael Albaum
Rental Property Investor · Petaluma, CA · Member since 2018 · 203 posts · 164 votes
3y
Also, if a buyer comes in down the road, they may want to know that permits were pulled and lipstick wasn't thrown on a pig. I've passed on deals before because there was no permit trail. Some may scoff at that, but I come from the insurance world, so I play it more conservative than others.
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Chris B.
Chandler, AZ · Member since 2020 · 295 posts · 272 votes
3y
Permits must be pulled if the work requires it. What type of work is being performed? If you are getting new cabinets and flooring for example, then no, its not needed. If you are having any electrical, plumbing, or structural work done, then yes, that is almost always a situation where a permit is required. Permits should be pulled prior to start of work and periodic inspections need to be performed as outlined by the county throughout the construction. As the county stated, you probably do need permits. I would tend to trust the advice of a county inspector over a contractor if the ideas conflict. That's not to say the inspector is always right. Just think about what you are having done and if it reasonably falls within the bounds of needing a permit. Even a tiny bit of falling within the bounds still counts. Permits don't need to be expensive or much of a hinderance for small jobs.
Assuming a permit should be pulled... Can it be done without permits? Sure, the contractors can go ahead and get their work done, get a paycheck, and move on. Are they licensed and bonded? These contractors still sometimes skip permits, but generally are a bit more responsible. Will not having permits come back to bite you in the future? Possibly. Less likely if you will be living there for a long time. More likely if you ever sell the property or if you have renters and something goes wrong. In addition, your insurability may be impacted.
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Jeff Roth
Real Estate Consultant · Ann Arbor, MI · Member since 2022 · 464 posts · 254 votes
3y
Hi Ronald-
Great question!
The best thing to do is talk to other real estate investors locally or a local property manager and ask their opinion. They would know if the area where your house is located has aggressive enforcement of permitting.
This is what I do.
I usually work with the local property manager to have the required work done so I know we are doing things up to compliance and they act as the general contractor for the work.
To Your Success!
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Doug SmithPro Member
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
3y
Yes. A thousand times yes. Get red-tagged just once and you'll understand. Half-a$$ing a renovation will cost you more in the long run. Just do the job right up front. Pull the permits for the things that require permits...roofs, A/C, plumbing, etc. If you want to paint yourself, that's your call, but pull the darn permits on the stuff that requires it.
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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
3y
The best thing to do is the right thing to do: pull the dang permits. This is a big investment and one that skipping a relatively inexpensive step could make it a paper weight. And, you know how you get caught when you don't: neighbors, disgrunted trades, contractors who bid the job but didn't get it, a jealous coworker/flipper, a friend of a friend, your mother-in-law - anyone can report 'suspicious activity' without cause that can result in that badge of dishonor: the bid RED TAG.
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Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
3y
Quote from @Jeff Roth:

Hi Ronald-
Great question!
The best thing to do is talk to other real estate investors locally or a local property manager and ask their opinion. They would know if the area where your house is located has aggressive enforcement of permitting.
Much like getting a dentist's advice about your hip replacement surgery.
1 Reply
Chris Merchant
Member since 2023 · 216 posts · 133 votes
3y
It almost sounds that the GC may not be licensed to perform the work needing to be done or is "blackballed" in the county for previous issues with the building department but they don't want to lose the bid/job.
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Erin Dreher
Real Estate Agent · Little Rock, AR · Member since 2022 · 83 posts · 63 votes
3y
I am married to a contractor.... it is a huge pain in the A** but pull the permit. If you get caught it won't be worth what the city puts you through. If you pop on the radar without the permit it could cost you tons more than the permit
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Todd Jones
Member since 2023 · 243 posts · 199 votes
3y
Quote from @Ronald Meza:

Hello all,

… I have talked to 2 general contractors in which they stated that for interior work of the house without adding square footage to the home, it would not make sense to delay renovations to pull out permits.

I experienced similar events like this more than once.
They may not be licensed to work in that city, hence why they want to avoid permit pulling.

Also, their insurance (if they have any) requires permits.

Pull the permits.
Like others said, it protects you and future buyers.

I’m not saying they would automatically do a bad job. It’s just the job won’t be protected.

You may end up spending dollars to save dimes.
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Austin Steed
Real Estate Agent · Columbus, OH · Member since 2016 · 593 posts · 664 votes
3y
@Ronald Meza
After doing 7 BRRRs in Columbus OH on any major renovation I’ve always been glad or wished I had pulled permits.
Reasoning:
- work is inspected by the city which gives extra assurance things are done correctly
- tax abetments (this may be a Columbus thing only though)
- less risk, locally if the city sees you doing a renovation they can issue a stop work order
- ease of mind, when you’re all said and done you know your asset was fully inspected by the city. For the most part they do this for safety. Now you’ll have a safe and sound home for tenants
Always glad when I do things right the first time! Best of luck with your renovations
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Marcus Auerbach
Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
3y
@Ronald Meza - there is no question: 100% you want to pull permits.
Anything else is unprofessional, risky and frankly shady. It's also penny-wise and pound foolish. Not doing so could cost you a crippeling amount of money later: just imagine you have a fire and someone starts asking questions about permits, even if everything was done to code. Or you are selling it and the buyer is calling the city. Cutting open drywall in 20 spots so the work can be inspected and permitted after the fact is painful. Or cutting open a tile shower, because you have to show a water membrane was installed...
It's an inconvinience for the contractor, especially for those who don't have a project schedule and are just "winging it". One hallmark of a bad contractor that I see over and over again, is that they have no system to their workflow, they start work as it comes up, which means a little plumbing today and then maybe some more plumbing in 3 weeks when we come across something else in another bathroom they did not think about it. Of course they don't want to pull a permit (every time)! Professional jobs are compelted in phases and each phase is inspected after it's done, permit closed out.
The cost of permit/inspection is low ($60 here in Milwaukee) and you get a trained professinal checking the work of your contractor. That alone is a huge value to you as the owner and frankly it's so cheap, it's a real bargain!
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Chris Merchant
Member since 2023 · 216 posts · 133 votes
3y
There is also a HUGE possibility that should something God forbid go wrong and your house burns down, collapses, someone gets electrocuted or it floods and the insurance company finds out you had work done yet never got it inspected or had a permit they can and most likely will say, "well we are sorry but you had illegal work done which caused this damage therefore we are not liable to cover the damages, have a wonderful day". Insurance companies try their hardest to dig up any little thing to weasel out of paying things they know they are liable to pay so don't think for a second that if there is something they have a legitimate leg to stand on to get out of writing you a check they won't exploit it.
Best bet is tell the GC that you demand a permit be pulled and it is their job to pull it so if they don't wish to do things the right way in all aspects of the job than thank them for their time and move onto another GC. One of the major duties of a GC is to pull permits and deal with the inspectors and paperwork, that is what they are paid to do. They have the right to argue and tell you that you/they don't need a permit and it is also your right to hire someone else who will do the job the right way which includes the permits. When we bid a job where I work we include the time and money spent on pulling permits and meeting with the inspectors, it is all figured into the bid price.
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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
3y
Permits are required by most townships and cities on anything more than painting your house. In my area, you technically need a permit to change your faucet - which is ridiculous.
No one here can really tell you to pull permits or not.
Will it be cheaper? Yes
Will it take less time? yes
Do permits ensure work is done correctly? Sometimes... I might get some hate here, but as a Realtor I have seen decks built with permits that have become a safety hazard. It needed to be completely torn down after 10 years. Inspectors are people too, and some are strict and enforce code well, and others might not care. I've even seen new construction falling apart and rotting because of poor installment.
While I have seen permitted work be bad and worse than non permitted work, for someone who doesn't know, it is a layer of protection that won't hurt.

The best way to make sure work is done correctly is to do your own research.
Remember, no one will do better work to something than you, because you care the most. Stay on top of your contractors, call out their BS, and educate yourself as much as possible
Good luck on your choice
[email protected]267-767-0111
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Alan AsriantsBusiness Member
Real Estate Agent · Philadelphia, PA · Member since 2019 · 1k+ posts · 1k+ votes
3y
Quote from @Alan Asriants:

Permits are required by most townships and cities on anything more than painting your house. In my area, you technically need a permit to change your faucet - which is ridiculous.
No one here can really tell you to pull permits or not.
Will it be cheaper? Yes
Will it take less time? yes
Do permits ensure work is done correctly? Sometimes... I might get some hate here, but as a Realtor I have seen decks built with permits that have become a safety hazard. It needed to be completely torn down after 10 years. Inspectors are people too, and some are strict and enforce code well, and others might not care. I've even seen new construction falling apart and rotting because of poor installment.
While I have seen permitted work be bad and worse than non permitted work, for someone who doesn't know, it is a layer of protection that won't hurt.

The best way to make sure work is done correctly is to do your own research.
Remember, no one will do better work to something than you, because you care the most. Stay on top of your contractors, call out their BS, and educate yourself as much as possible
Good luck on your choice

One point I forgot to add is this: If the work you are doing requires permits for resale, make sure you get them.
We had a client who installed a pool without permits. When he went to sell it, the township forced him to remove the pool, or their wouldn't issue a Use and Occupancy certificate.
Don't know if your township has resale requirements. Do a quick google search: Use and Occupancy - "name of township"
Your township website should have all the forms
[email protected]267-767-0111
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Victor S.
WorldWide · Member since 2016 · 1k+ posts · 1k+ votes
3y
". I called the county and they say that I am supposed to pull out permits for adding rooms, electrical work, plumbing, etc; "
are you doing any of the above? not sure how can any people above really answer this question without knowing the local code and scope of work that you're doing...
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Rick Albert
Real Estate Agent · Los Angeles, CA · Member since 2018 · 2k+ posts · 1k+ votes
3y
It is always the right thing to pull permits. Not pulling them is a business decision.
There are two things to think about:
1. Do you have to disclose it when you sell? Right now you have actual knowledge that work is being performed without a permit. I'm not an attorney, but I view this as a material fact that should be disclosed. Keep in mind every state is different and you need to check local laws. If so, what kind of impact does that have in your market? Generally speaking, the higher the price point the more buyers care. If I'm spending $X on a house, I expect permits to have been pulled.
2. Do you trust your contractor's work? Keep in mind the City comes in to make sure that the work is done properly (or at least they should). This can hold your contractor accountable. If you don't have experience with plumbing, electrical, how do you know corners aren't being cut, work done correctly, etc.?
The delays are real but even the best contractors have had corrections made on their work by the City.
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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
I strongly recommend prioritizing ethical practices by obtaining the necessary permits for your interior renovations.
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Jeffrey Alan Slachetka
Contractor · Member since 2019 · 9 posts · 1 vote
3y
@Ronald Meza
As almost everyone has stated, pulling the permits is the correct course of action and will not break the bank in any way, especially compared to the many consequences that not pulling permits can bring. It is very likely that this contractor is not licensed because for a licensed contractor, not pulling permits completely jeopardizes their business in every way.
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Account Closed
Rental Property Investor · Indianapolis, IN · Member since 2020 · 562 posts · 554 votes
3y
@Ronald Meza as long as you are just doing cosmetic repairs and everything is in basically the same place you generally do not need permits. Example. Putting in an upgraded sink and faucet in the kitchen exactly where the old one was - no permit. Putting a new sink in a completely different location, like maybe moving it from the wall to the island. Probably needs a permit.
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Chad McMahan
Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes
3y
Quote from @Ronald Meza:

Hello all,

I am new to the real estate business and I am just starting to renovate a 4 br, 3.5 bath in the Arizona. I am running into some maybe "ethical" dilemma. I have talked to 2 general contractors in which they stated that for interior work of the house without adding square footage to the home, it would not make sense to delay renovations to pull out permits. I called the county and they say that I am supposed to pull out permits for adding rooms, electrical work, plumbing, etc; however, the GC I'm working with says they have never had a problem with passing inspection after renovating without permits bc they use all original electric wiring, plumbing etc and do not change any of that. Can someone please advise me on the right thing to do? please and thank you.
Hi Ronald. This is a great question for your real estate agent. If they are experienced, savvy, specialized and generally great at what they do, they should warn you when there are red flags- such as a home that has converted the garage into livable sq ft/bedrooms, in an area where that's not allowed, etc.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
3y
I hired a contractor to get some work done.
They were doing some work that required pulling a permit(Changing windows).

By chance, the city inspectors were passing by the area and noticed work being done on my house.
They flagged my house and I was issued a fine for doing so. It also dragged out the renovation work a little while to get everything resolved.
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Chris Watkins
Lender · Eugene, OR · Member since 2021 · 245 posts · 154 votes
3y
Quote from @Terrell Garren:

Quote from @Jeff Roth:

Hi Ronald-
Great question!
The best thing to do is talk to other real estate investors locally or a local property manager and ask their opinion. They would know if the area where your house is located has aggressive enforcement of permitting.
Much like getting a dentist's advice about your hip replacement surgery.

If they recently had hip surgery, that would be very valuable advice indeed!
0 Reply
Gregory Chadwell
Real Estate Broker · Milwaukee, WI · Member since 2015 · 299 posts · 90 votes
3y
Quote from @Marcus Auerbach:

@Ronald Meza - there is no question: 100% you want to pull permits.
Anything else is unprofessional, risky and frankly shady. It's also penny-wise and pound foolish. Not doing so could cost you a crippeling amount of money later: just imagine you have a fire and someone starts asking questions about permits, even if everything was done to code. Or you are selling it and the buyer is calling the city. Cutting open drywall in 20 spots so the work can be inspected and permitted after the fact is painful. Or cutting open a tile shower, because you have to show a water membrane was installed...
It's an inconvinience for the contractor, especially for those who don't have a project schedule and are just "winging it". One hallmark of a bad contractor that I see over and over again, is that they have no system to their workflow, they start work as it comes up, which means a little plumbing today and then maybe some more plumbing in 3 weeks when we come across something else in another bathroom they did not think about it. Of course they don't want to pull a permit (every time)! Professional jobs are compelted in phases and each phase is inspected after it's done, permit closed out.
The cost of permit/inspection is low ($60 here in Milwaukee) and you get a trained professinal checking the work of your contractor. That alone is a huge value to you as the owner and frankly it's so cheap, it's a real bargain!

Good points Marcus, but ill also add when it comes time to sell. The Real Estate Condition report ask's if you did work without pulling permits and guess what? When the offer comes in the buyer will request permits pulled. Another story, i had a seller who finished his basement without pulling permits in Brown Deer WI and the inspector make him rip it all out...
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