Avoiding city (building) inspectors and code enforcement

[Alexander Parunin]

We just recently started house renovation and got red tagged by the city inspector. I guess he saw dumpster while driving around or maybe neighbors complained. So we learned never leave dumpster in city limits.

• Could you share your strategies on how to avoid city inspections/code enforcement on extensive renovations?

Much appreciated

[Carlos Ptriawan]

is this OO or primary ?

[Alexander Parunin]

Quote from @Carlos Ptriawan:

is this OO or primary ?

 Investment flip

[Matt Devincenzo]

Pull permits for any work requiring one...

[Alexander Parunin]

[Alexander Parunin]

Quote from @Matt Devincenzo:

Pull permits for any work requiring one...

Great strategy! Thanks a lot!

[Scott Mac]

Are asking for advise on how to break the law (???)

[Alexander Parunin]

Quote from @Scott Mac:

Are asking for advise on how to break the law (???)

 Absolutely not, just don't want to attract attention to my projects. That is it. More like tax avoiding strategies if it makes sense

[Mike Hern]

Quote from @Alexander Parunin:

Quote from @Scott Mac:

Are asking for advise on how to break the law (???)

 Absolutely not, just don't want to attract attention to my projects. That is it. More like tax avoiding strategies if it makes sense

I guess you are not aware of the liability you place yourself in by avoiding getting permits. Anything that goes wrong in the future points directly back to you.

Permits, where I am, run a few hundred dollars and having the inspector sign off on the work, places the responsibility on them not me.

One of the first things an insurance company will look for when a claim arises is whether a permit was required and if so, was a permit granted and inspected. If you do work that required a permit and didn't get one, it's very likely the insurance company will deny any future claim. They are looking for reasons to deny. Insurance companies are in business to make money, not to cover for your mistakes. Don't get those two things confused.

And it can be years before the statue of limitations runs on work that you do, making you liable for years after you've moved onto other things. It just isn't worth it.

[Patricia Steiner]

First, know the code.  It's posted online under Construction Services for the municipality.  What you don't know - like the dumpster thing - not only gets you red tagged but guess what else?  Placed on the radar.  That code enforcement guy - he'll be back.  He knows you're rehabbing...

Second, don't tick off the neighbors.  Make sure that your property is pristine on the exterior - no trash, no parking on the grass, no foul language, no 'guys' just hanging, and no dang dumpster.  Know why?  It's not who you see but who sees you...and once the neighbors see you and you have offended them, you're on the radar - yet again.  They'll keep reporting you and reporting you and reporting you.  And, that leads you to being the favorite target of code enforcement.  See how this works.

Permit, don't permit...a little story to tell you.  I had a client who decided not to pull a permit to rewire a MF property to avoid the $40k cost.  No, why do that when you can hire an active meth user who has never held an electrician's license to do it for $8k?  Even if you can forget that if the place burns down with tenants in it, you - yes, you - as the owner - are going to prison for a lifetime - yeah, let that go.  Consider the work ethic of a drug user...they come, they go.  What price can you put on your job being held hostage by a guy you can't find.  Can't permit it once it's started - no one will touch it.  Get another guy into finish it - not going to find that fool.  Sometimes what you think is saving you money is actually costing you a whole lot more than if you had done it right the first time.

Reputation.  Be the real deal.  Those who want 'to appear to be' are only fooling themselves. 

And, don't forget - you were outed by a dumpster.  

[Carlos Ptriawan]

Quote from @Alexander Parunin:

Quote from @Carlos Ptriawan:

is this OO or primary ?

 Investment flip

 I am about to say, specific to Birmingham/Huntsville, AL. This is very common as their code enforcement is pretty active. I've seen so many houses are being tagged.

[Michael S.]

@Alexander Parunin - in the city of Huntsville proper, if you perform what is deemed to be "substantial unpermitted work" on a house, it is technically illegal to sell the property for the first year after the work was performed.  Granted, this would require the buyer to determine permits weren't pulled and file a lawsuit;  but you would lose the suit by default.  How do I know this?  I pulled a permit myself in 2018 for an addition to my house;  the inspectors office told me directly that either unpermitted work, and/or work that the final inspection was never signed off on, would result in the owner not being able to legally sell the property for one year after the work was deemed to have been completed.  

[Jim K.]

@Alexander Parunin

You have yet to make the shift to understanding that all these people are your business associates: code enforcement, local magistrates, the IRS, the police.

If you're going to go into real estate, go in it to win it, don't go in it to wing it. This thread is full of good advice, but I would listen closely to the specific points that @Patricia Steiner has pointed out. Learn the code. Bend over backwards to have good relations with the neighbors. Follow the law. Build a reputation. Once the local authorities understand that you are part of the solution to improving the neighborhood, not part of the problem, a lot of your troubles will go away.

[Eliott Elias]

There is only one way, follow the rules. 

[Carlos Ptriawan]

Quote from @Michael S.:

@Alexander Parunin - in the city of Huntsville proper, if you perform what is deemed to be "substantial unpermitted work" on a house, it is technically illegal to sell the property for the first year after the work was performed.  Granted, this would require the buyer to determine permits weren't pulled and file a lawsuit;  but you would lose the suit by default.  How do I know this?  I pulled a permit myself in 2018 for an addition to my house;  the inspectors office told me directly that either unpermitted work, and/or work that the final inspection was never signed off on, would result in the owner not being able to legally sell the property for one year after the work was deemed to have been completed.  

 wow, that regulation is very easy to be maneuvered, actually even better, rent it for one year before sell for even higher price.
Before, I thought he has to pay some hefty fine or go to court.

[Bruce Woodruff]

Quote from @Alexander Parunin:

• 
  Could you share your strategies on how to avoid city inspections/code enforcement on extensive renovations?

No. You need to do things the right way. Why wouldn't you pull permits? It's not that hard or expensive.....or are you planning on doing things outside of code requirements? This is not the place to come to get advice on how to skirt the law.....

Do things right. You will build a better reputation, make more money and actually respect yourself more....

[Carlos Ptriawan]

Quote from @Jim K.:

@Alexander Parunin

You have yet to make the shift to understanding that all these people are your business associates: code enforcement, local magistrates, the IRS, the police.

If you're going to go into real estate, go in it to win it, don't go in it to wing it. This thread is full of good advice, but I would listen closely to the specific points that @Patricia Steiner has pointed out. Learn the code. Bend over backwards to have good relations with the neighbors. Follow the law. Build a reputation. Once the local authorities understand that you are part of the solution to improving the neighborhood, not part of the problem, a lot of your troubles will go away.

 I am actually surprised reading your comment Jim :-) I thought in PA it's very common to see unpermitted work. I know the rules/code enforcement is very strict in cash-flow market like AL/WI. I was offered by PA turnkey company a 5 BR house, while in the record they only have 3 BR LOL 

Also unpermitted work is bit more common in CA, It's still rare to see house being red-tagged. I could be wrong though but this seems more common in Birmingham/Alabama/Milwaukee.

[Bruce Woodruff]

Quote from @Carlos Ptriawan:

Also unpermitted work is bit more common in CA, It's still rare to see house being red-tagged. I could be wrong though but this seems more common in Birmingham/Alabama/Milwaukee.

Au contraire. Cali is very strict about code and permits. At least SoCal where I worked for many decades.....

[Carlos Ptriawan]

Quote from @Bruce Woodruff:

Quote from @Carlos Ptriawan:

Also unpermitted work is bit more common in CA, It's still rare to see house being red-tagged. I could be wrong though but this seems more common in Birmingham/Alabama/Milwaukee.

Au contraire. Cali is very strict about code and permits. At least SoCal where I worked for many decades.....

 Funny right, they should waste their time fixing the condition of the homeless camps or prohibit sale of Meth in front of Federal building.
California is just too much.....

[Jim K.]

Quote from @Carlos Ptriawan:

Quote from @Jim K.:

@Alexander Parunin

You have yet to make the shift to understanding that all these people are your business associates: code enforcement, local magistrates, the IRS, the police.

If you're going to go into real estate, go in it to win it, don't go in it to wing it. This thread is full of good advice, but I would listen closely to the specific points that @Patricia Steiner has pointed out. Learn the code. Bend over backwards to have good relations with the neighbors. Follow the law. Build a reputation. Once the local authorities understand that you are part of the solution to improving the neighborhood, not part of the problem, a lot of your troubles will go away.

 I am actually surprised reading your comment Jim :-) I thought in PA it's very common to see unpermitted work. I know the rules/code enforcement is very strict in cash-flow market like AL/WI. I was offered by PA turnkey company a 5 BR house, while in the record they only have 3 BR LOL 

Also unpermitted work is bit more common in CA, It's still rare to see house being red-tagged. I could be wrong though but this seems more common in Birmingham/Alabama/Milwaukee.

Because a lot of the housing in Allegheny County is ancient, the country property records and historical cards are, at best, patchy. Yes, you see that a lot here.

Unpermitted work is VERY common here by small operators. Really, the authorities can't do anything systematic about it in the current political environment. Here's the situation in Allegheny County: we have over a hundred independent municipalities, each with their own code enforcement officials, and each of them have their own agendas and ways that they want things done, in addition to the city's PLI (Permits, Licenses, and Inspection) office and staff of inspectors. We also have 46 district magistrates across the country. Because water issues are so common here, plumbing inspections are run by a special group in the Allegheny County Health Department. They all have to at least LOOK like they're getting results for the horrendous situation.

So what they do is share information and go after the lowest-hanging fruit "pour encourager les autres."

This has actually happened to bathroom/kitchen contractor friends of mine. You can go go go for years, sure, but once they catch you, you are blacklisted FOREVER. Every single job you take as a contractor, every property you buy in any municipality, they're on you like a bum on a sandwich.

After they get you the first time, they have every right to go in and inquire on every job you've done in the past. So get ready for the short-arm inspection on every job you've every done.

It's worse than some mafia shaking you down, and it's perfectly legal for them. They just pick the lowest-hanging fruit and stomp it into a pulp. Local government employees being what they are on the whole, I'm pretty sure plenty of other places across the country are a lot like the 'Burgh.

[Joe A.]

ALWAYS pull permits when they are required.  Then make sure to follow through with ALL INSPECTIONS. If you don’t, and the property becomes a loss due to fire, etc, your insurance will not cover your entire investment because it wasn’t up to code (or at least verified that it’s up to code). 

Additionally, if you’re using a GC, follow up with these things yourself instead of trusting the GC to do it. I’m learning that lesson the hard way right now! My GC pulled the permits, but never requested inspections. Now it’s a bit of a mess to get inspections done after all the work is done and I’ve paid in full. 

[Bruce Woodruff]

Quote from @Joe A.:

Additionally, if you’re using a GC, follow up with these things yourself instead of trusting the GC to do it. I’m learning that lesson the hard way right now! My GC pulled the permits, but never requested inspections. Now it’s a bit of a mess to get inspections done after all the work is done and I’ve paid in full. 

Yep. Always ask to see the permit card before making payments!

[Chris Merchant]

A few things , first off always pull the permits.  The cost now saves you much more down the road.  If yo aren't sure if you need a permit for the work being done, just call the local building office and ask, they are generally helpful and nice to people trying to do the right thing.

Second try not to upset the building/zoning officials as they can make your life extremely rough in future endeavors, and another point to that they can also be some of your best team members when locating future properties.  If they know you're legit they are dealing with houses all the time all day every day they typically know the back story of many local houses and can be instrumental at finding you potential leads and also if you really get a good relationship with you they can give you loads of advice and tips.  My mentor has a team member that is a building inspector for a town he invests in and he has taken him with him (off the record) on first visits when he does his initial walkthrough to give him an idea of what will need to be upgraded, what better way to figure rehab costs if you know from the get go what has to be done.

Third, realize that as much as EVERYONE hates the inspectors they're just doing their jobs.  Part of their job (especially if you're not doing the work yourself) is to make sure the contractors are doing an adequate and proper job and not cutting corners or taking advantage of an absent or unsavvy owner.

Also know that sometimes if they find out you have completed work that requires a permit without obtaining one they can make you go back and show the work in the various stages they would have inspected it which means basically redoing the work all over again at 100% out of pocket cost to you, plus they will make you pay the permit fee and most likely will hit you with some fairly hefty fines.  Example: if you decided to redo the entire interior of the house and its all completed and they find out you did so without the proper permits because they see the contractors leaving the job site after you just handed them their payment, you may get a knock at the door and well because after rough framing (before drywall is installed) they would normally inspect the plumbing and electrical you had all redone, guess what you will have to remove all the drywall so the can look at what they want to see.  

It is always just easier to do the job right the first time part of the job is pulling the proper permits.

@Joe A. and @Bruce Woodruff I don't know about all areas but where I am the permit must be displayed and viewable from the exterior of the house without obstruction at all times while the property is under construction (most people place them in a front window of the building).

[Carlos Ptriawan]

Quote from @Chris Merchant:

@Joe A. and @Bruce Woodruff I don't know about all areas but where I am the permit must be displayed and viewable from the exterior of the house without obstruction at all times while the property is under construction (most people place them in a front window of the building).

 Where is this location ?

From the OP, I know from the beginning, AL code enforcement is very strict, this is reason why as OOS Investor, I am only willing to purchase turnkey in the area, rebuilding cheap house is just not worth it from cost analysis/permit timeline process. I hope your GC mentioned that even before you rehab the house.

In Northen CA I can do much more liberal/aggressive when flip or repair the house and the reward is much more.

[Chris Merchant]

Connecticut.  Around here generally the biggest time delay is getting the inspection phases scheduled and coordinated with all contractors (if separate ones are involved) especially in the smaller non metro areas as most of our building officials are part time so they typically only work 2-3 days per week and sometimes in the evenings.  Again one of the reasons it is vital to stay on their good side, they will be sure to put you to the top of their schedule.

We are in a business where one hand washes the other.

[Bruce Woodruff]

Quote from @Chris Merchant:

@Joe A. and @Bruce Woodruff I don't know about all areas but where I am the permit must be displayed and viewable from the exterior of the house without obstruction at all times while the property is under construction (most people place them in a front window of the building).

We had to have them available on the job site, but not displayed for exterior viewing.