Why is it important to request an open permit search whenever one buys real property? The answer to that question involves an understanding of the permit process. When one performs improvements to property, in most cases, a permit for that work is required. The permit, in essence, provides the legal authority to proceed with the work in accordance with the plans or specifications provided to the applicable governmental authority. The permit then goes through different phases, generally as follows:
· Open Permit. Once a permit is initially pulled for work, it is considered open until the work is completed. It remains Open until the work has been completed AND inspected.
· Closed Permit. A permit is Closed once the work has been completed, and most importantly, such work has been inspected by the appropriate governmental authorities to verify that it was done properly and meets all applicable code requirements.
· Expired Permit. If work was originally permitted, but never closed properly, the permit may expire. An expired permit means that work may or may not have been done, and that such work, if performed, was not properly inspected to allow the permit to be closed.
(Note that jurisdictions may use different terminology, but generally speaking, these are the three general permit statuses)
It is critically important to request a permit search for two fundamental reasons. First, the buyer wants to make sure that all prior work on the property, if any, was done properly, and that all permits for that work were properly closed, thus providing confirmation that the work was indeed inspected and blessed by the applicable governmental regulatory body. Second, if you know that work was done to the property, a permit search will confirm whether the work was indeed properly permitted. In Southwest Florida, there is example after example of illegal work, i.e., work that was done without a permit. This is a large and potentially expensive problem, one that a buyer would want to discover before closing (rather than when the buyer tries to sell the property down the road).
If open permits are discovered, a buyer should insist that they get closed prior to closing. This generally involves calling in a government inspection of the improvements, but could involve very costly remedial measures to place the work in compliance with the permit to properly close it out. And if you know that work was performed, but cannot locate a permit for it, chances are, the work was done illegally. In such instances, you should insist that the seller produce proper permits for the work, if they can. This generally involves applying for what is referred to an after-the-fact permit. This can be VERY expensive and time consuming to obtain, and could require substantial renovations or even total removal of the illegal improvements. This is not something to be taken lightly.
Insist on an open permit search when you are buying property, and of course always contact your real estate attorney if you have any questions about permits or illegal improvements.
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