Permits are the authorization process by which the city documents and oversees the work being done. When a project has permits the project is overseen by the city by building inspectors. Inspectors will periodically visit the property to inspect the work at the beginning, potentially in the middle and definitely upon completion in order to ensure city codes are met. Although permits may be revenue generating for the city, they are there to actually protect the property owner/investor, homeowners/tenants and contractors from hazards by enforcing the adherence to the conformity which the city has made the standard. Each trade has their own specification under which a permit needs to be received. For Chicago, I've learned that it is best to know when a permit is not required as it seems to be a much shorter list than when it is required. *Smile*
The typical underlying thought is that a contractor that can apply for and recieve permits is licensed to work with the city or municipality of the project property. When someone is licensed they are probably already quite knowledgeable on the city's code and they are held at a higher standard as this is their business. This should but doesn't always equate to the fact that they will provide a better quality service or it does not mean they will complete tasks without issue, but it also serves as a clue to their level of professionalism, experience and overall reliability for their trade.
Advantages
- Quality of work may be at a higher standard;
- Aside from the time waiting for the inspector's review the actual project work may be done in a much more efficient timeline; and
- Overall project and the work done will/may have more integrity.
Disadvantages:
- Codes and permits vary and are comprised based on local city/town needs;
- Per @Steve Babiak, the code may be up to intepretation in some cases and may still lead to non-complaince;
- Licensed contractors typically charge more money as the permits subtract from their bottom line;
- The process of obtaining the permit, getting any inspections and follow-up inspections may make for a longer timeline; and
- If you don't pull a permit and get caught, you may be fined, the work may be delayed or rework may be required.
My humble advice is to...
- Ensure work is done by licensed (if required), bonded (for performance) and insured contractors;
- Get a performance bond from the contractor for any monies you've paid;
- Have the contractor add you to their insurance policy for the work performed;
- Sometimes a contractor will ask you the investor or homeowner to pull the "homeowner permit" as mentioned by @Thea Linkfield. They say it will either be faster, may not cost as much, or
something else. I'd be weary of any contractor that is licensed if they provided this advice;
- It is best to pull the permit the work demands it; and
- You should maintain a copy of any permits obtained for your own records.
As far as how would you get caught...
- They can be alerted by annoyed neighbors.
- Something can go wrong in the rehab which raises attention to the project;
- City inspectors drive around. If they are suspicious of work being done without a permit they will investigate. Here, it is rather easy. For example, while leaving another project site, they drive past your site and see 2 work vans where there quite a number of drywall sheets being offloaded and carried into the building. The permits are supposed to be prominently
displayed (i.e. in a window, on a gate) but they don't see it. They look it up in their database and don't find it. Busted!
To permit or not to permit that is the question... If you permit, the profit may be less but you can sleep at night. If you don't, it is a gamble as this can happen but it may not. If it does happen it is a worse situation. I've done it both ways without issue but in the future, I plan on always getting the permit because I become a Nervous Nelly.
