Permit fee responsibility - Contractor vs Homeowner

[Brandon Dinsmore]

Hi All,

I had my hot water heater replaced a year ago through a home warranty. I paid my invoice & that was the end of it... until now. I am turning my house into a rental and when the inspector came she pointed out that a permit had not been pulled. I was told that the contractor was responsible for pulling the permit. They would not pull it unless I paid their administration fee which was $250. I contacted the city of Grand Rapids and filed a complaint so that they had to pull the permit. The company who installed, turned around and billed me $400. I am refusing to pay because I had completed my invoice and never agreed to them doing work which I'm pretty sure they legally had to do because the city made them. 

Has anyone had an experiences similar? I find it hard to believe that they if they take me to collections they will win because I never agreed to this. 

[Chris Seveney]

Quote from @Brandon Dinsmore:

Hi All,

I had my hot water heater replaced a year ago through a home warranty. I paid my invoice & that was the end of it... until now. I am turning my house into a rental and when the inspector came she pointed out that a permit had not been pulled. I was told that the contractor was responsible for pulling the permit. They would not pull it unless I paid their administration fee which was $250. I contacted the city of Grand Rapids and filed a complaint so that they had to pull the permit. The company who installed, turned around and billed me $400. I am refusing to pay because I had completed my invoice and never agreed to them doing work which I'm pretty sure they legally had to do because the city made them. 

Has anyone had an experiences similar? I find it hard to believe that they if they take me to collections they will win because I never agreed to this. 

 What does your warranty contract state? That will tell you whether they cover permits or not. Typically they do not cover the cost of permits or obtaining them from my experience. Honestly a home warranty is the biggest waste of money there is. They cover nothing and replace stuff with old junk parts. 

[Eliott Elias]

Contractors are not reasonable and will not help you out in scenarios like this. This ones on you, you had to specify that before hiring them. 

[Eliott Elias]

Contractors are not reasonable and will not help you out in scenarios like this. This ones on you, you had to specify that before hiring them. 

[Scott E.]

Both you and the contractor tried to get away with performing work that required a permit, without actually getting a permit.

Now you got caught and you're wondering who should be paying the permit fee?

This is crystal clear to me - The responsibility falls on you.

Most contractors are reasonable and will work through budget issues as they're performing work, and help with warranty work following the job. But in this case they agreed to install a water heater for a set price, which they did. You have no right to come after them for a permit fee a year later.

[Bruce Woodruff]

Quote from @Eliott Elias:

Contractors are not reasonable 

You're funny. Generalize much....?

[Bruce Woodruff]

Quote from @Brandon Dinsmore:

Hi All,

I had my hot water heater replaced a year ago through a home warranty. I paid my invoice & that was the end of it... until now. I am turning my house into a rental and when the inspector came she pointed out that a permit had not been pulled. I was told that the contractor was responsible for pulling the permit. They would not pull it unless I paid their administration fee which was $250. I contacted the city of Grand Rapids and filed a complaint so that they had to pull the permit. The company who installed, turned around and billed me $400. I am refusing to pay because I had completed my invoice and never agreed to them doing work which I'm pretty sure they legally had to do because the city made them. 

Has anyone had an experiences similar? I find it hard to believe that they if they take me to collections they will win because I never agreed to this. 

Generally the homeowner will pay for the permit and the Contractor will take care of obtaining it. 

On a huge remodel, there will usually be no charge, but on a little job like this, the cost and time will come out of their profit, so the owner (you) should pay for it.

[Austin Fogt]

They offered to pull the permit and you refused to pay for it, this is on you.

[Jill F.]

If practice, if you live in a place where there is no point of sale inspection and where there is no formal process for enforcing building code in occupied buildings, most plumbers (and other trades) would not expect to pull a permit for a replacement and doing so would be an extra cost option that you would need to discuss up front. If you are in a place where the code is enforced for rentals but not for occupying homeowners, then unless the plumber had reason to believe that property was a rental, they might (reasonably) assume you'd want the cheapest option. Around here, even where the code requires a permit-- it's just not always commonly done in areas without enforcement so you have to kind of know the local culture

[Jason Brown]

Quote from @Jill F.:

 it's just not always commonly done in areas without enforcement so you have to kind of know the local culture

 I think that really sums it up perfectly. 

In a perfect world all contractors SHOULD tell you that the work done legally requires a permit. In the real world unfortunately it doesn't necessarily happen.

All investors should know that if you're working on any of the 4 major systems (Roof, Electrical, Plumbing, HVAC) you probably need a permit pulled. Every municipality is different but you should be very familiar with looking up your local codes to see if its necessary.

My rule of thumb here is that the contractor SHOULD include it and should bill it in their work but at the end of the day the ultimate responsibility falls on the homeowner to make sure it is done.

[Bruce Woodruff]

Quote from @Jason Brown:

All investors should know that if you're working on any of the 4 major systems (Roof, Electrical, Plumbing, HVAC) you probably need a permit pulled. 

And anything structural/foundation, and kitchen and bath remodels...

[Jason Brown]

Quote from @Bruce Woodruff:

Quote from @Jason Brown:

All investors should know that if you're working on any of the 4 major systems (Roof, Electrical, Plumbing, HVAC) you probably need a permit pulled. 

And anything structural/foundation, and kitchen and bath remodels...

 Yeah the reason I leave off foundations from my big 4 is simply because I NEVER touch them if they've got foundation issues lol but obviously that's an shoe in. 

Honestly if its a kitchen and bath remodels I'm not necessarily pulling permits. For me plenty of guys can do demo, hang cabinets, move non structural walls, framing, tile work without pulling a permit. Now if you've got to move/upgrade a service panel or do the rough in for new additions that falls under my big 4 and to the permit office we go.

[Bruce Woodruff]

Quote from @Jason Brown:

Quote from @Bruce Woodruff:

Quote from @Jason Brown:

All investors should know that if you're working on any of the 4 major systems (Roof, Electrical, Plumbing, HVAC) you probably need a permit pulled. 

And anything structural/foundation, and kitchen and bath remodels...

 Yeah the reason I leave off foundations from my big 4 is simply because I NEVER touch them if they've got foundation issues lol but obviously that's an shoe in. 

Honestly if its a kitchen and bath remodels I'm not necessarily pulling permits. For me plenty of guys can do demo, hang cabinets, move non structural walls, framing, tile work without pulling a permit. Now if you've got to move/upgrade a service panel or do the rough in for new additions that falls under my big 4 and to the permit office we go.

 I love foundation issues, love 'em....!

The reason to pull a permit for kitchens and baths is that it is so obvious that they are newly remodeled, and savvy buyers and Realtors often call the city and check permit status. When they find out it was non-permitted work, they often get cold feet or want to discount the SF value.

Not to say I haven't done a kitchen or two without permits, but really not many.

[Brandon Dinsmore]

Quote from @Scott E.:

Both you and the contractor tried to get away with performing work that required a permit, without actually getting a permit.

Now you got caught and you're wondering who should be paying the permit fee?

This is crystal clear to me - The responsibility falls on you.

Most contractors are reasonable and will work through budget issues as they're performing work, and help with warranty work following the job. But in this case they agreed to install a water heater for a set price, which they did. You have no right to come after them for a permit fee a year later.

Completely inaccurate assumption. I did not try to 'get away with something'. Nor did I avoid anything which is why I'm getting my house inspected & certified to be a rental. 

You're generalizing and not providing facts, instead your opinion. 

Along with your inaccurate assumption, I am not coming after them. I called the city of Grand Rapids and asked them what my options are. The city of Grand Rapids came after them for performing work without a permit, and the company wants to turn around and bill me plus a bunch of administrative fees. I am not the one making them pull a permit. They pulled it because the city 'made' them. Not me. 

Thanks for your opinion, but it's just flat out subjective & I was looking for an objective person who has been through this before.

[Brandon Dinsmore]

Quote from @Chris Seveney:

Quote from @Brandon Dinsmore:

Hi All,

I had my hot water heater replaced a year ago through a home warranty. I paid my invoice & that was the end of it... until now. I am turning my house into a rental and when the inspector came she pointed out that a permit had not been pulled. I was told that the contractor was responsible for pulling the permit. They would not pull it unless I paid their administration fee which was $250. I contacted the city of Grand Rapids and filed a complaint so that they had to pull the permit. The company who installed, turned around and billed me $400. I am refusing to pay because I had completed my invoice and never agreed to them doing work which I'm pretty sure they legally had to do because the city made them. 

Has anyone had an experiences similar? I find it hard to believe that they if they take me to collections they will win because I never agreed to this. 

 What does your warranty contract state? That will tell you whether they cover permits or not. Typically they do not cover the cost of permits or obtaining them from my experience. Honestly a home warranty is the biggest waste of money there is. They cover nothing and replace stuff with old junk parts. 

 Hi Chris,

Agreed. Thankfully I did not pay for it, but it came with the house. I wouldn't recommend it to anyone either especially with all of the headaches that have came with it. I will double check this. My confusion lies in the fact that I'm not making them pull the permit, the city is & I was told they legally have to do this anytime work is done. I don't understand how this would fall on me as the homeowner unless the contract explicitly stated this, like you mentioned. 

Thank you for your response!

[Brandon Dinsmore]

Quote from @Eliott Elias:

Contractors are not reasonable and will not help you out in scenarios like this. This ones on you, you had to specify that before hiring them. 

I think it's a case by case basis, I have met reasonable contractors and non-reasonable ones. I am not the one coming after them or asking them for help, the city of Grand Rapids is for doing work without a permit. They are just trying to turn around & bill me for the fees the inquired about doing work without a permit. 

[Brandon Dinsmore]

Quote from @Austin Fogt:
They offered to pull the permit and you refused to pay for it, this is on you.

I told them I didn't want the permit pulled because they charged 5X what the city charged. They then were slapped with fees by the city until they pulled it, not by me. I am not forcing them to pull a permit. I think you're misunderstanding that.

[Brandon Dinsmore]

Quote from @Bruce Woodruff:

Quote from @Brandon Dinsmore:

Hi All,

I had my hot water heater replaced a year ago through a home warranty. I paid my invoice & that was the end of it... until now. I am turning my house into a rental and when the inspector came she pointed out that a permit had not been pulled. I was told that the contractor was responsible for pulling the permit. They would not pull it unless I paid their administration fee which was $250. I contacted the city of Grand Rapids and filed a complaint so that they had to pull the permit. The company who installed, turned around and billed me $400. I am refusing to pay because I had completed my invoice and never agreed to them doing work which I'm pretty sure they legally had to do because the city made them. 

Has anyone had an experiences similar? I find it hard to believe that they if they take me to collections they will win because I never agreed to this. 

Generally the homeowner will pay for the permit and the Contractor will take care of obtaining it. 

On a huge remodel, there will usually be no charge, but on a little job like this, the cost and time will come out of their profit, so the owner (you) should pay for it.

 Thank you for the insight Bruce. I spoke with the city and said if I was responsible for paying for the fee, I would go through a different mechanical contractor who would charge me (close to) the rate of what it actually costs to pull the permit. I'm very curious to see how this holds up because I had paid the initial invoice. I am not requiring them to do anything, the city is, which is what I feel like people are missing. Unless spelled out in the home warranty contract, I find it hard to believe you can hire someone (for anything) pay the invoice in full, and then a year later they bill you for something they legally had to do when the city is the one 'making' them pull the permit.

I appreciate your response!

[Brandon Dinsmore]

Quote from @Jill F.:

If practice, if you live in a place where there is no point of sale inspection and where there is no formal process for enforcing building code in occupied buildings, most plumbers (and other trades) would not expect to pull a permit for a replacement and doing so would be an extra cost option that you would need to discuss up front. If you are in a place where the code is enforced for rentals but not for occupying homeowners, then unless the plumber had reason to believe that property was a rental, they might (reasonably) assume you'd want the cheapest option. Around here, even where the code requires a permit-- it's just not always commonly done in areas without enforcement so you have to kind of know the local culture

 This was very well worded & definitely brings a good question to ask with being a homeowner vs rental. 

Thank you for your insight Jill!

[Blake Billups]

Not legal advice, but you don't have to pull permits to perform work on your own property. The sticky point here is when you went into the public to get permission to rent your property out to someone else, now you're playing their game...why did you have an inspector come out in the first place?

[Brandon Dinsmore]

Quote from @Jason Brown:

Quote from @Jill F.:

 it's just not always commonly done in areas without enforcement so you have to kind of know the local culture

 I think that really sums it up perfectly. 

In a perfect world all contractors SHOULD tell you that the work done legally requires a permit. In the real world unfortunately it doesn't necessarily happen.

All investors should know that if you're working on any of the 4 major systems (Roof, Electrical, Plumbing, HVAC) you probably need a permit pulled. Every municipality is different but you should be very familiar with looking up your local codes to see if its necessary.

My rule of thumb here is that the contractor SHOULD include it and should bill it in their work but at the end of the day the ultimate responsibility falls on the homeowner to make sure it is done.

 Agreed. This makes sense. What I think is interesting is that they legally are supposed to pull the permit. I am not making them pull the permit. When I spoke to the city, the imposed fines on this company and said they will have to pull the permit or they will keep getting fined. 

While speaking to the city, I asked if the price was going to fall back on me, I would hire someone else instead of paying the obnoxious fees (which I think are higher because I think they included the fee from the city of GR) that this company wants to charge me.

Definitely going to try to fight this in small claims because my initial invoice was already paid.

Thank you for the insight Jason, I appreciate it!

[Brandon Dinsmore]

Quote from @Blake Billups:

Not legal advice, but you don't have to pull permits to perform work on your own property. The sticky point here is when you went into the public to get permission to rent your property out to someone else, now you're playing their game...why did you have an inspector come out in the first place?

Correct. I was told contractors are supposed to either way, but there's no way of really enforcing it which makes sense. I am turning my primary residence into a rental & the city inspector brought it up because it didn't have an inspection sticker on my water heater which is how this whole thing started. 

I spoke with the city multiple time and basically said if I have to pay for it, I will hire someone else who doesn't upcharge me 5X, but they still tacked on fees to this company. The company then pulled the permit & billed me without my consent.

[Adam Martin]

By not paying them the original 250 admin fee for them to pull permits you are essentially telling them that you are ok with unpermitted work being done.  Is it the correct way, no but it happens all the time.  Often I am asked do I want to pay the extra fee and I say no but know there is a risk.  If you don’t pay this fee I certainly see a mechanics lien in your future.  Out of curiosity what was your reasoning at the time of the work that you didn’t want to pay for the permit.  

Remember you can ask for 2 out of 3 things, good, fast, and cheap.  You chose fast and cheap but sacrificed some quality in permits because you were cheap.  

[Bruce Woodruff]

Quote from @Blake Billups:

Not legal advice, but you don't have to pull permits to perform work on your own property. 

Oh heck yeah you do....! You're saying that you could build a second story on your own home with no permit? Or install a new electrical main panel?