Unpermitted Renovation NEED HELP

[Jeremy Smith]

Hi BP,

Seeking advice around a nasty situation I am in. 

I recently had a pretty major renovation completed on a duplex in my hometown. I hired “general contractor” for this job. This was a full gut remodel, that involved refinishing an attic loft, adding bathrooms, full plumbing, electric, the whole deal.....about a $150,000 rehab. 

As the project was wrapping up, I asked the contractor where we are at with final inspections. At this time is when I realized that I was lied to by him, and that he never pulled permits from the start of the job. I learned this because we tried to cut the power on, and the utility company said the meters needed to be Inspected by the city before they would cut the power on.I looked on the City permit website to confirm no permits existed. This also confirmed that the contractor did not have any licenses, and neither did his subs. 

My initial plan was to house hack this project....move into the left side and rent out the right side. However, I am stuck at what direction to move at this point. 

Now, I fully realize the major due diligence mistake I made here. At 22 years old, I can guarantee this will be the only time I fail to have a contractor confirm permits were pulled before work starts. So, please don’t comment saying that I should have done my due diligence. I fully get that. 

I am posting this to ask advice for next steps. Here are what I think my options are. 

1. Contact city permit office and tell them exactly what happened. Hope that they allow inspections to be scheduled and just bill me for the cost of the original permits, plus whatever penalty fees. Downside: I don’t know if they will allow the other unit to be rented for 2 years since no licensed contractors performed the work. This would be a loss of $1300/month times 24 months. There is also the risk of them requiring some work to be redone. 

OR 

2. Have the contractor call the city to ask for an electrical inspection. Cross my fingers that they only inspect the meter, and I can get the power turned on. Downside: change in bedrooms/bathrooms could trigger down the road than Unpermitted work  occurred, and I’ll have to live with that headache. 

Advice would be much appreciated. I want to do the right thing here, and I look forward to never making this mistake again :)