203k with unpermitted/unlicensed elec/plum work by licensed GC

[Mark Griep]

Hi Everyone,

Got a 203k loan to fix up a foreclosed house in Maryland as it required ~$120k in work.   It was supposed to be a 4 month project, but a year later the nightmare continues~  The selected general contract is licensed to work in Maryland and there was a 203k consultant for the withdrawal inpsections; both of whom were recommended from the guy I got the mortgage through (perhaps my first mistake..).

Among the many issues I'm still fighting with the contractor on (contract items not finished, new deck/porch falling apart), the part that worries me the most is the electrical and plumbing.  The project required bring all the electrical up to code, redoing ~70 outlets, installing ~20 light fixtures , 2 full bathrooms and a complete kitchen that was redesigned from the previous kitchen layout.  The contract specifically laid out ~$8k in electrical and plumbing work.

Upon moving in I found multiple wiring issues, such as the built-in microwave, kitchen count circuit, and dishwasher all wired to the same breaker so it blew all the time.  Checking into it I found that no electrical or plumbing permits were ever pulled on the project and that the final inspection on the 'general renovation' permit with the county was not completed.  I tried for months to get the GC to finish the final inspection but he never did, so recently I scheduled the inspection.  The county inspector came out and would not approve the final as both electrical and plumbing permits were required.

So now I'm in a position where my new house (that I currently live in) has an open permit that failed inspection and electrical/plumbing violations.  Curious for any thoughts on how best to go forward from here?

[Jared W Smith]

Wow @Mark Griep. There's a number of problems here. I would definitely say that taking the first recommendation from the mortgage person was a possible fault however he should be held accountable if he gave the recommendation, especially being in the construction/203k loan space. It seems like a very convoluted situation and possible conflict of interest since the mortgage guy is approving payments to go to the contractor he recommended. Sounds fishy.

As far as the plumbing and elec. work, what does your contract say with contractor? Are there plans which detail the scope of work? Is the home closed up or with studs open? Typically the Contractor/GC is responsible for their subcontractors meaning it is up to him to provide a standard of work to complete the project. (I assume you did not hired the plumber/electrician yourself.) Dishwasher and refrigerator are required to be on their own dedicated line, so that's very basic. 

So moving forward you have only two real options, have the work redone like @Matthew Paul said and possibly re-doing a lot of patching and dry wall repairs or find a licensed elec./plumb who will sign-off on it as it is (which I doubt anyone will do). You should not have scheduled an inspection with the city without your/a contractor present and the work corrected prior. The city now know it's faulty and therefore they will expect them to be remedied and may fine you for occupying an un-complete home. It may be time to get an attorney. Making these repairs could be costly.. however this will only be beneficial to you if your contract is strong and your contractor hasn't disappear/close shop.