You Need A Permit To Replace Your Sink? And Other Laws You’re Probably Breaking

Real Estate Survival Guide with Terry Story

Steve spoke with Terry Story, a 30-year veteran at Keller Williams. During this week’s Real Estate Roundup, Terry and Steve talked about permits that homeowners have, what open and expired permits are, and why they can cause problems for homeowners looking to sell their home and for realtors assisting them.

Open Permits Can Sneak Up On Homeowners

When homeowners go to sell their homes, multiple searches are run on the home to see if money is still owed. This includes a tax lien, a city search, and a search for permits. There could be permits on just about anything. The guy putting in the air conditioning may have opened a permit. The same could be true for the guy installing electricity. There are could be five or 10 permits open that the homeowner and their realtor is unaware of.

There is a fee simply to run the permits. This can become a major headache. In order to close any open permits, the realtor must jump through an incredible number of hoops. They literally have to chase down the individuals or companies who opened the permits, which may have been sitting around for years, even decades.

The permit may have expired. It is then the homeowner’s/realtor’s responsibility to find the party who originally opened the permit. The permit must be reopened so that the fees and the permit can be paid off and closed permanently. So, basically, you’re talking a lot of extra work and extra expense for someone trying to sell their home.

The Letter Of The Law

Recent legislative victories, fortunately, have changed the scope and hassle of permits. Starting October 1, 2019, local governments will be allowed to close out permits six years after they’re issued, as long as there aren’t any clear safety issues. For example, say there was a permit to repair a sinkhole, but repairs weren’t completed. The government would not be able to close out the permit without making sure that the sinkhole is dealt with or that it doesn’t pose a threat.

The true difficulty with permits—and why the new legislation is so helpful—is that just about everything, any kind of repair or maintenance work in a home, needs a permit. It can be incredibly difficult to keep track of all the permits attached to a home and to know if they are open, closed, or expired.

The permit problem can be a real obstacle because permits are the kind of thing that doesn’t get checked until you’re maybe a week or 10 days from closing. You may have to do some really fast work to get things squared away in time for the closing. Permits are such a problem that there are businesses that specialize in clearing them for you—for a fee, of course.

Deposits/Fees

Changing gears slightly here, let’s talk a little bit about deposits and fees. There seems to be confusion among individuals about putting down a deposit, specifically a non-refundable deposit. This is basically money that you put down, usually to help the owner of the property protect against damages.

For example, if you’re renting and have a pet, the property owner may ask for a non-refundable deposit to protect himself against any damage the pet may do to the property. Once you leave, the owner can use that money to pay for repairs if necessary.

There is a difference between a refundable deposit and a fee, but there’s really no difference between a fee and a non-refundable deposit. The term “non-refundable deposit” is kind of an oxymoron. If it’s non-refundable, then it’s effectively a fee.

To learn more about buying a home, selling your home, or about real estate in general, visit Terry Story at www.//terrystory.com/ or Keller Williams at https://www.kw.com/kw/.