When homeowners go rogue
Skipping building permits and hiring unlicensed workers can end up costing you a bundle.
© Steven Errico/Getty Images
Rules, permits, licenses, insurance. Our grandparents didn't need all of it when they built and remodeled their home. Should we bother? Why not just forge ahead and cope with any fallout later?
It's sure tempting, for one big reason: It's cheaper. But you could pay a steep price for the savings.
With construction prices high, homeowners working within a budget may ask themselves, "What's the harm in skipping all the red tape?" Permits and licenses cost money in a couple of ways. Alerting authorities that you've added 500 square feet to your house is likely to raise the assessment of your home's value, for one thing. A bigger value equals higher taxes. And the permits themselves cost hundreds or even thousands of dollars, depending on your project and the fees where you live. (Bing: Whom should you contact for remodeling permits?)
Homeowners may try to save by hiring unlicensed contractors. Some work for 20% to 50% less — big savings on, say, a $30,000 remodel. Unlicensed workers don't have the expense of a state license, continuing-education classes, liability insurance and workers' compensation coverage.
Tear it up, do it over
Despite the lure of these savings, you're gambling by cutting corners. Maybe you won't get caught. Municipalities often don't look aggressively for offenses. But all it takes is someone — usually a disgruntled neighbor — to alert them and then you're in for an expensive headache.
Each city and county enforces its rules differently, so it's hard to know what will happen if you are busted. You'll probably have to submit to an inspection. If the work was done to code but not permitted, you may only need to purchase the permit. But if the work is faulty, or if it's hidden behind a wall, your expenses will start to climb.
"Let's say [the homeowners] have illegally remodeled. They have to tear down portions of the wall so the city can see the electrical and plumbing to see if it was done to code. … Sometimes they just have to tear the whole thing out," says attorney Linda Pieczynski, a contracting prosecutor for 12 municipalities in DuPage County, Ill., west of Chicago. Going after violators is part of her work.
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Why do cities crack down so hard on violators? "The issue is safety," Pieczynski says. A neighbor's property could catch fire, or someone who buys the home later on could be hurt.
A few rural counties in the U.S. still have no building codes, but most places do. Yet the codes vary from city to city, county to county and state to state. The International Code Council, an industry group, offers its 2012 model code for cities, counties and states to copy. Most states have adopted it whole or with modifications.
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States can require their cities and counties to follow their version. Local governments can sometimes make their codes even stricter. (Learn more on building codes from the council's PDF fact sheet.)
Unsure? Just ask
If you're unsure whether you need a permit for a project, call your city or county government and ask – anonymously, if you like. Describe your project and ask what the law requires. But be frank about your plans, Pieczynski says. She wrote "The Building Process Simplified: A Homeowner's and Contractor's Guide to Codes, Permits, and Inspections."
Occasionally, a homeowner doesn't fully describe the project, Pieczynski says. "They'll say, 'Do I need a permit to replace a window?' And the answer is, 'No, not normally.' But if you're really going to replace windows and add a sunroom, then, yes, you need a permit." When they're caught, they complain they were told they didn't need a permit.
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But getting caught may be the least of their problems. Construction done on the sly can haunt you for years because there's nowhere to turn if:
- A bank declines to lend money on the home.
- Your contractor did a poor job.
- Problems appear after you've sold the home.
- A worker is injured on your job site.
The bank snubs you
A remodel or addition done without permits may cause you no trouble at all until you decide to sell or refinance. At that point, the lender considering mortgaging the home will hire an appraiser who examines the structure.
Appraiser Randolph Kinney, in Carlsbad, Calif., sometimes uncovers illegal additions when a lender asks him to appraise a home. Kinney measures each home, calculating the square footage and comparing his results with county records. If his total is greater than the public record, it's a tip-off that something's wrong. He searches for permits issued to the home's address. If he finds none, the bank may decline to issue a loan on the home.
Before the real-estate bubble and crash, lenders sometimes accepted construction done without permits. "But now they won't," Kinney says, because illegal construction is a risk for the lender. A fire insurance carrier, for example, may refuse to honor a claim. "If there's a wiring problem or something happens to where it burns the structure to the ground, it voids the insurance," Kinney says.
Even if a bank agrees to lend on your home, your problems are just beginning. When you try to sell, illegal construction can become an issue. Smart homebuyers and their agents are learning to search county records for details on homes they're interested in. Illegal construction is likely to turn off potential buyers. The offers you do get may be lowballs, since buyers will want to account for the cost of fixing the home to code.
Innocent, and stuck
Even if you play by the rules, you could be hurt by illegal construction. If you innocently bought a home with building-code errors or violations, you will probably be held accountable.
"Most people we try to work with, we realize that you didn't do the work, this was the previous owner. But you're the one who's responsible for making it safe," Pieczynski says.
It is a lesson that a young single mom in Sarasota, Fla., learned the hard way. Greg Yantorno, chief building official for Sarasota County, tells the story.
The homeowner, whom Yantorno did not name, paid $98,000 in November 2011 in a short sale for her first home: a three-bedroom, two-bath ranch for herself and her young son. Since 2006, the small house had been bought and sold several times, including for $190,000 in 2006, and for $26,000, in early 2011. Along the way, the original two-bedroom, one-bath structure acquired a third bedroom and a second bath.
Soon after moving in, she called a plumber because sewage had backed up into her child's bathtub. The plumber, finding code violations, summoned a contractor who alerted the county. The additions were done, it turns out, without permits, by enclosing a carport.
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"Based on what I've observed, it certainly wasn't a licensed person doing the work," Yantorno says. A load-bearing support post had been removed, putting the roof at risk of collapse.
Correcting the problems — reinstalling plumbing and removing and restoring a wall to reach it, hooking up to city sewers, reinstalling windows and rebuilding a lanai — will cost the homeowner $25,000 to $30,000, the contractor estimates.
Don't know about other States, but in Virginia you need permits and inspections for most construction projects ... new or remodels ... but, hold on! Even though the inspector comes out and "passes" the relevant inspection, should the homeownee ever have a problem with the "passed" work, the inspecting authority has NO ... ZERO ... NOT AN OUNCE of liability. Now, isn't that a kick in the pants? You pay for a permit. You pay for each inspection. You are under the misguided impression the work that was been done in a correct/code approved manner.
So why is it you have no recourse against the city/town/county taking your $$$$ for permits and holding up your job for inspections? The reason, according to the legal beagles employed by municipalities is that it is the HOMEOWNER who, ultimately, is responsible for making certain the work is executed correctly.
Now, why is it we need permits and inspections? Oh! I forgot. The previous writer indicating it's a means of revenue for cities/towns/counties is exactly on target.
A lot of this is common sense. I have an extremely old house in an old town but we still have some pretty stupid permits...like to have a garage sale...Before I bought the house I was quite aware of the permit rules for our city. Alot of projects I can DIY but you have to know your limits and abilities. Gutting and redoing a bathroom for me is a DIY. Replacing the water main to the house was for a licensed and trusted contractor. Before I bought the place I had a full inspection from a knowledgeable and trusted home inspector and I followed him around everywhere so I had a pretty good idea of the big stuff that needed done short term and long term with the house and roughly how much money I was looking at dumping into it over the long term to make her last another 100+ yrs. Personally you couldn't pay me to live in a new house. If I need a contractor for something I research what needs to be done, ask questions, and follow them around. Not all contractors are a rip off. Jacking our house back up will be left to the professionals however I had multiple estimates from both small and large companies and anyone who wasn't even willing to get in my crawlspace and investigate the condition of the supporting structure wasn't even in the running no matter how low the bid. And yes, I will suck it up and get the permit! In our remodeling we have "undone" and redone some interesting minor repairs that were here long before i was. One of my favorites was ripping up the bedroom carpet and finding a small section of the tongue and groove floor patched with plaster and lathe....
There are some repairs that do not require permits. However, more and more, especially in some large north-east cities and of course.... California the requirement of obtaining permits for even smaller jobs is on the rise. Its a revenue raiser in more ways than one.
I think a question not discussed in this article is what about people that purchased homes 25-35 years ago. Not all of those renovations,required permits, at that time and banks usually did not stand in the way of sale if structure remained inside the original occupancy building dimensions. Meaning no major changes had occurred to the house.
Higher property taxes from property improvements is one of the unique taxes
of a citizens "labor of love"
Some of these city ordinances are so stupid & archaic. We are not even allowed to have a clothesline in our back yard. Talk about being not green friendly!
Wow. Why does adding to or updating a house suddenly seem like a Big Insurance kind of thing?
Even a contractor's license doesn't completely protect you. A contractor also needs two kinds of insurance: liability, to compensate you if the work fails, and workers' compensation insurance, in case someone is injured on the job.
To protect yourself:
So, these days, nothing can be done without Big Brother Insurance peeking around the corner but everyone squawks when the Government of the People By the People For the People tries to take care of its own Human Citizens? But, if it is Big Insurance telling us what to do all of the time, that is A-OK and, of course, perfectly legal.
Lets not forget the bribes that need to be paid to some inspectors. I know people who installed electrical panels and were told that they did a perfect job, but had to replace them, because they were bought from the wrong supplier. They wanted to resist, but could not afford to so they did it and were immediately approved.
I protested having to get a permit for work on my own house and told the inspectors at the clerks office if they had done their jobs right the first time I would not be doing the work I needed a permit for, to do it a second time.
When it comes to a support wall or taping on to a support wall one better know what your doing when your adding a room.
I did concrete foundation work for about ten years. Here in Minnesota, having a proper foundation is critical because if built improperly, your house will crack and split literally its first spring in existence, when the frost thaws. Inspectors where pretty thorough and always performed "on site" inspections to ensure that the dirt work compaction was correct, the rebar was correct, the dig depth was correct, and that the footing was of proper thickness, among other things. Plumbing and electrical inspections are performed in the same manner.
But there are frivolous permits too. Depending upon build material, a dimensionally identical deck may or may not require a permit(essentially, even if you re-use the below frostline footings a concrete replacement needs a permit as a patio, wood decking does not). A driveway repair would require a permit, tearing it out and replacing your driveway with dirt or wood does not. Replacing your roof shingles requires a permit, shingling over the top of your existing roof does not. In many cases, examples like this mean that doing an obviously inferior job means not requiring a permit, whereas "doing it right" means the added expense of proving that you did it right. It's counterintuitive and a large incentive to half-**** a repair or replacement project on things like this.
And then there is the variation from county to county. We did work in surrounding counties as well that had identical winter weather, meaning the same needs. Some of these counties didn't require rebar(a lack of it guarantees frost will crack your foundation footing and cause water leaks). Some didn't do in-person inspection at all, despite having very low populations and nearly nowhere else to be(the inspectors weren't busy).
I recommend everyone get the required permits for the task you wish to complete. This means getting drawings,engineering, and other required paperwork. This covers you and your assets.
Good luck and Happy Holidays to all.