This article does not constitute investment or legal advice. This article was created for informational and educational purposes only. We recommend consulting with your local Building Department to ensure your properties are built in accordance with the local building codes.
Many rehabbers think building permits sound like a hassle and an extra expense that cannot be afforded in their budget or schedule (this may be true). However, building codes and inspections ensure safe and professional building techniques and protect you and your potential buyers from safety risks and malpractice...and not to mention protect your financial investment in the property!
Why get a building permit?
There are many important reasons to obtain a building permit and get the required inspections for your rehab project:
#1 It's the Law
Permits are required by local city ordinances and if you are found to be working without a permit it can result in hefty fines, demolition and removal of the improvements and even jail time!
#2 Improves Project Safety
Besides the law, the most import reason to get a building code is because it protects families from potential risks such as structural failure, fire hazards and electrical shock.
The building permit allows mandatory inspections from the local code official who ensures the project is meeting local code guidelines and safety standards. The inspector coupled with an experienced and competent contractor can provide a system of checks and balances resulting in an overall safer project.
#3 Makes Selling the Property Easier
When selling a property, a rehabber is often required to list any improvements made and declare if permits/inspections were obtained to perform the work.
If the property is being financed through a financial institution, they will often require proof of a final inspection. If the inspector finds that the modifications were made without a permit, you may be required to tear down the addition/improvements or make costly repairs.
Obtaining a permit & local inspections can give your credibility and reassurance with the buyer that the rehab was done correctly and safely.
#4 Helps Protect Property Values & Your Investment
As a rehabber, you and/or your investors are forking out hundreds of thousands of dollars to purchase the property and fund the rehab improvements.
Like with any other investment, it is important to minimize risk and protect yourself from financial loss by using qualified contractors and building-out safe and high-quality improvements.
If the contractors you are hiring are unqualified to perform the work and their improvements do not meet local building codes or quality standards, (and you get caught) there's a chance you may be required to demolish and tear out all the 'improvements' and start from scratch and potentially face hefty fines!
Potential home buyers and their inspectors can tell if you cut corners or if the craftsmanship is shoddy, which will reduce your credibility with your buyers, effectively decreasing the # offers you receive & the value you can derive from the property.
Remember, if your rehab has more credibility with your buyers, they will be willing to offer more for your property!
Okay, so when do i need to get a building permit for my rehab project?
This is often a difficult question to answer for many rehabbers and it varies depending on you local ordinances.
Building permits are typically required for all new construction projects as well as alterations that include structural, and MEP work.
Here are a few examples of when you may or may not need a building permit:
May Need a Building Permit:
- Building a project addition
- Punching in a new window or door in an existing wall
- Demolishing interior load-bearing walls
- Installing new electrical wiring, mechanical duct, plumbing lines
- Building a deck larger than 100 sf
- Fences over 6ft tall
- Changing the roofline of the house
- Structural concrete work
May NOT Need a Building Permit:
- Installing new flooring
- Replacing doors or windows in existing openings
- Replacing countertops
- Minor electrical work, such as replacing outlets or light fixtures
- Minor plumbing work, such as replacing plumbing fixtures/toilets
- Minor mechanical work, such as updating the thermostat/replacing grilles
- Replacing the exterior siding
- Installing a new roof
When in doubt, the best way to know for sure whether you need a building permit is to contract your local building department and they should be able to determine whether or not you need a building permit.
How do I get a building permit for my project?
Now that you know why and when to get a building permit, lets walk through the steps on how to obtain a building permit.
If you are hiring a contractor for the project they should be familiar with the permit process and be able to do this step for you.
The following steps must typically be completed before a permit can be issued:
- Complete application and submit plans to building department - For remodels or additions a set of drawings can typically be hand drawn. (you)
- Pay appropriate fees - Typically around $250-500 for minor improvements that do not expand the square footage of the home. Your building department will be able to provide you with a fee schedule which will usually be a minimum amount or a % of the overall construction cost. (you)
- Application and plans are reviewed. (building department)
- Correct all noted deficiencies in the plans. (you)
- Return all plans and other requested documents to building department for review. (you)
- Repeat steps 5 & 6 until all corrections are approved .
- Record signed and notarized agreements. (building department)
- Receive permit and approved plans -The approval process can take anywhere from a couple of days to a couple of weeks depending on the size of the remodel and ordinances affected so plan accordingly. (you)
- Post permit where work is being performed in a window visible from the street. (you)
As you are going through the sometimes annoying and expensive process of obtaining a building permit, remember all of the great reasons of why you are getting a building permit. Building codes are enforced to provide standards to safeguard life, health and public welfare. Rehabbing with a building permit guarantees that you are protecting your investment, future families and your community. Not to mention, it's the law!NEXT: BENEFITS OF FLIPPING HOUSES