Are Building Permits Optional?

Question

When remodeling a commercial office condo unit, the assumption is you need a permit for things you will do. Electrical permit, plumbing permit, building permit, mechanical permit and others if needed.

There will be no changes to the outside of the unit. Unit is owned outright.

However, upon discussion with contractors, they all state that you don't have to get permits, it is optional. If you do get them, they draw up plans, submit them to the local city hall and charge several thousands for this.

Seems to be in their best interest to make sure all their work is legal, get permits and charge a few thousand for this service. Yet they still state this is all optional and they can remodel without permits. The construction involves new floors, ceiling, putting up walls, paint, bathroom remodel.

Is this common? Are permits really optional?

If so, why would anyone get them?

Frank Chin · Answer

I have to agree, building codes vary from jurisdiction to jurisdiction. But my experience in using licensed and insured guys is they know when to get a permit and get an inspection and when not to. One electrician explained that he rather get his work inspected, because afterwards, if a customer sues, he's covered, because he could always point to the inspection, especially to his insurance company. I used a few electrician and plumbers through the years and some appears buddy buddy with the local inspectors, and in one case, the inspector even signed off on the work, which he hasn't started on, told the plumber make sure you do it. I took advantage of the situation, it was to remove an illegal gas hookup, so I told the plumber to just leave the connection alone, as the violation removal had already been signed off.

I also had a few hard luck stories with rehab work where the contractor says no permit is required. In one case, I had a 30 year old shower taken out, when the old pan uderneath leaked, and with the closet behind it, combined and built a laundry room. Contractor says no permit needed because it's not exterior work, pipes are already there. Believed him. When it was time to sell the property, buyer had the place inspected, and the laundry room was not in the floor plan. Of course the job was not permitted. Tried at that point to get a permit. Turn out the shower had no gas connection that we needed for the dryer, and when that was checked out, we used 1/2" gas pipes installed rather than regulation 3/4".  Definite violation. Turned out the GC didn't use a licensed plumber that would have known this. So to get it right, I had to spend even more money to just about doing the project all over again. There were several other things wrong with this laundry room project that would have surfaced, including the air vent, had we gotten a permit in the first place. Get a retroactive permit including fines. GC didn't know they have inspectors check for room counts to see if renovations are done, not just exterior work.

Jennifer H. · Answer

As someone from the contractor side, I'll answer this question and say, as a general rule getting permits, drawing up plans, sitting in meetings with the city officials, getting inspections, etc. Tends to slow a project WAY down.

Not saying that your contractors aren't telling you the truth for your location, but like @Thomas S and @Jason Hirko said, make a phone call to the city hall and talk to them about the project. 5 minutes on the phone could save alot of headache down the road.

Jason Hirko · Answer

@Kyle Scholnick I'd just call the building inspector and say 'My contractor says I don't need a permit to do x, y, and z.' Then let them tell you what they will require. If they really are wrong, I'd ask the inspector for the name of a contractor who follows their guidelines well and go from there.

Thomas S. · Answer

The answers you seek will be provided by your local building inspector. If you want to evaluate the honesty of contractors ask the building inspector. If the contractors are lying regarding the need for permits and inspections (highly likely) you know you can not trust the quality of their work.

Jason Hirko · Answer

@Kyle Scholnick The extent to which building permits are required will vary greatly based on where you are. I don't know about your area, but where I am, In Austin you need a permit for everything on a commercial property, but in San Antonio you only need one if you are touching a major system.

Of the things you listed, I would expect to get at least a plumbing permit, and depending on the extent of the remodel, maybe a building permit. In Texas, any commercial building permit requires an asbestos survey, even on a new building. If you get caught doing any renovations without one, they assume everything you took out of the building was asbestos and fine you accordingly.

Account Closed · Answer

@Kyle ScholnickI am a registered and insured home improvement contractor in Pittsburgh, PA. I came to real estate investing from that side of the business.

As a small contractor working on residential jobs, my relationships with code enforcement officials throughout my area weren't a huge priority. Pittsburgh as a city is rather decentralized: there's a small City of Pittsburgh proper, and then each surrounding borough and township has its own code enforcement people, while plumbing permits are handled by the county health department.So if you're doing non-plumbing work for homeowners and investors in this town, there are many different code enforcement officials to deal with. You do a job north of the city in one township, a different official will inspect your work than if you do a job south of the city, in another township. And these guys don't tend to share much information because they're each part of different municipal governments and have other things to worry about to stay in office.A lot of illegal work, or rather, gray-market work, goes on throughout the area. Plenty of small contractors understand that if they get burned bending the rules in one township, fine, there are a hundred others that they can work in. And coming in with the lowest possible bid is always a top priority. They know they're going to do the same work with or without a permit. As long as they build according to fairly good code standards, what's the big deal with not getting a permit on a specific job?As a local investor, I have a different set of priorities. A number of my properties are in the same township. I work on my relationships with the code enforcement officials there. Another way of putting it would be that I go out of their way to make their lives easier. They understand that I will comply, and comply quickly, with all strictures placed on me. They know I'm here to stay, and they know the quality of my work.

They also understands that I own multiple properties in the township and cultivate business relationships with important people in the area. I wouldn't say that we're friends, but the code enforcement officials and I do understand that we're both doing our part to improve the municipality. There's a level of mutual respect.

----------------I don't know what it's like in your area. But something similar may be happening with contractors there. As far as what requires a building permit and what doesn't, COVER YOUR A$$. Work on your relationship with local code enforcement. Find and talk to the requisite authorities. Make that contact. You should think of it as part of your long-term investment strategy. Yes, it will cost more in the short run, but over the long haul with any real estate strategy that requires renovation, it's far wiser than trying to do an end-around local code enforcement.

Kyle Scholnick · Answer

@Jason Hirko

Kyle Scholnick · Answer

@Thomas S. What is confusing to me is these contractors are very well known. They have done numerous constructions in the area, I have seen their work, it is very very good and they came highly referred.

Why would they lie about needing permits? Doesn't make sense to me. For them to get permits means more money for them since they charge to right up the plans and submit to the city. It is an extra few thousand dollars for them. So given that and the fact they are well known in the area and I would assume they want a good reputation and run a legal business, why would they tell me it is optional if it in fact wasn't?

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