I've spent a good (bad) part of this evening reading about the nightmares that can result from not pulling permits, crazy inspectors, pulling permits and opening a can of worms etc...
My question is...how long to do you keep those permits that you've pulled? If you're doing a flip do you keep them forever in case an owner somewhere down the road has an issue and discovers a problem with something you did and tries to come back on you?
If you have rentals I'm sure you're keeping all paperwork anyway for as long as you own the property.
I'm near South Bend, IN and I did remodeling for a company for a number of years but I never had to deal with permits so I don't know much about them. I'm trying to learn about them now so I don't get blasted when I do my next flip.
I'm sure there's a list out there of what specific things require a permit and what does not.
FYI...if you ever want to bum yourself out, spend an evening reading about permits and building codes.
@Rob Kulp Unless someone from the same location has posted a list, you're not going to find a comprehensive list, because what requires a permit in one location may or may not in the next. (Unless you're in CA, then you should just assume anything above changing a light bulb needs a permit!! hehehe)
This is a broad statement, so you need to check with your locale's authority, but generally speaking...
Anything that requires a permit also requires an inspection. For me, it's the inspection report that I keep. That's where the rubber meets the road.
@Rob Kulp Permits are issued through the building or planning departments, and you can bet they keep a copy on file of permits pulled, therefore; you don't need to keep it with the property forever! If in doubt on when a permit is needed, you can usually go online and check to see if it's required. If you can't find it online, call the building department.
Here is a good website link that explains permits and provides links to certain cities/states. If the city or town is not on the list, then you'll just need to go to the local city/county building to find out if a permit is required on certain things and/or apply for a permit.
In my experience, pulling permits is a fine line to dance on. I am a contractor and do / organize almost all of my work (except electric & gas/plumbing). I can only speak for the Greater Pittsburgh area, but I would have to say it all depends on the area.
When I am in a very dense area of city, Ive had building inspectors come down before work was even commenced. On the other hand, Ive been able to replace 100% existing joist with engineered joist system without ever executing a permit because of the area. If I need a dumpster permit, I always say its remodeling / restoration work. If you have a very thorough inspector in that area, then you will probably see him. If you know what your doing, I don't see the need to pull a permit, then open up the "can of worms", they will be sniffing around everywhere, and you obviously don't want that. I take this issue on a case by case basis. I always get the city electrical inspector to certify my electrical work and a dot plumber for my gas, but other than that I try to keep the building inspectors the hell away from me.
In the county I work in the permits are public record and searchable online. These online records go back to 1989. Anything before that would require a trip to the county permitting office.
I've used the records to search my property and those of my neighbors (to get ideas for contractors to hire).
Thanks for the replies, everyone!
@Doug W. That's a great idea about searching the records. I'll have to see if my county has an online database.
Thanks @Jason Richardson , I think I checked out that site during my miserable evening trying to educate myself on permits haha. The link for Elkhart is broken so I'm going to have to call the city or see if they have another site with permit info.
@Justin Escajeda , Like you said, "case by case basis". I can't imagine pulling a permit to replace a toilet or a sink. I'll look further into the whole process before I get my next flip.
I'm not sure about your specific area, as I live and work in CT and every town, let alone area, have a different process for permits. As a contractor I have performed work with permits and without, however my opinion is that it is always better to err on the side of caution. Any time I am flipping or renovating a property that requires anything more than patch and paint cosmetic type work I go in and meet with the building inspector or someone from their department before I start the job or even purchase the property. Explain to them what you want to do, they will most likely ask you to pull permits, but then at least you've started the relationship off on the right foot and they are more likely to work with you in the future. I have rarely had inspectors make me replace existing items that I had nothing to do with unless they were legitimate safety concerns or reasonable upgrades.
In my opinion, having the permit and inspections in place is worth the time, money and effort when you go to sell the property and can show the buyer that everything done was legit.
Just my two cents.
@Rob Kulp PLEASE do not take the advice of @Justin Escajeda he's exactly the type of contractor that cause problems for the rest of us. Here's the thing Justin, permits are NOT optional, based on whether or not you or anyone else feels like pulling one or not. We don't get to decide what permits we do or don't need, we pull permits when they are required by the authorities, PERIOD! You not pulling permits when they are more than likely required because you think it's too much trouble, or costly, expose every homeowner that you do work for to HUGE LIABILITY! Should a permit be necessary and you didn't get it, all the work done can be required to be torn down or redone. So please, if you are a licensed contractor, adhere to the laws of your state. Also, don't advise people to break the law and expose themselves to huge fines! Learn your responsibilities as a LICENSED CONTRACTOR, and stop giving the rest of us that adhere to the laws a bad name.
I have said it on here more than one time that real estate investing is more than just doing something to make money. You have to have integrity and know you are responsible because you're marketing buildings people will live in. I once had a home owner couple call me to inspect a home they had recently purchased and I found the previous owner had done allot of work without permits. I found live fires in the room the new young couple owners had their 18 month baby sleeping in. Imagine if one of the family members died or got seriously injured because of a fire due to faulty workmanship. That was regarding electrical work that had been done without permits and installed improperly. Now there are many other things can can come about from faulty work such as mold and other health issues. People can get sick or injured in poorly constructed buildings. You should be a conscientious business person and a true professional. You will ultimately be held accountable for your actions, I truly believe that or at least I hope that. In any case when permits are required buy them. It will only educate you further as most building inspectors are generally quite helpful and you can learn allot from them. There is a good reason to have inspections done one being to avoid law suits against you and avoiding unnecessary cost duplication due to potential tear downs an inspector may order. Consider the position insurance companies will take if they find out you as an owner did work without permits and the potential there for being sued or otherwise being held accountable. It simply is not worth it and it will really speak ill of you if you are the kind of person that condones or practices doing work without permits when they are required. Things can go as far as getting a court order preventing you from buying, selling or renting property if you get identified as habitual violator of the law. One bad case against you and you can be put out of business with years of your work building up your career as a real estate investor ending very bad for you.
I am sure everyone in real estate is interested in real estate because it can be a good business that can be used to build wealth and independence and bottom line is we do it to make money but this is one area I wish Brian Turner would cover in one of his podcast or webinars and that is to do this business with integrity and responsibility. Ultimately whether we want to accept it or not providing buildings that will be used or lived in by other human beings is a public trust and we should do everything we can to avoid violating that public trust. Think of the things we depend on such as banks, private lenders, other investors, all the entities that support our endeavors as real estate investors. Trust ranks way up there in making it possible for us to build a career and ultimately in obtaining of financial goals. We can ill afford to lose that trust.
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