Permit issues come up fairly often and many times can be resolved with just a bit of leg work and relatively low costs. It is important to note that permits are not something that are covered by title insurance and a seller can technically pass title at closing without being in violation of the standard contract terms even with an open permit. This could leave the buyer with the responsibility for dealing with the permit issue post-closing. It is also important to remember that the standard 2017 Far/Bar contract and “as is” contract do not place any requirement on the Seller to close out open or expired permits.

So what happens when the permit shows up? The first step is to call the City or County permit/building department to find out exactly what the permit was issued for. Often times a municipal lien search will just give some general information so it is important to get the details. Then you should ask the permit/building department what is required for the permit to be closed out.  Next you should determine if the work relating to the permit in question was ever actually performed or if the permit was opened in anticipation of performing this work. If work was performed but the permit wasn’t properly closed then you would want to contact the contractor that performed the work to see if they can work with the Seller to close that permit out. Most contractors will often do this for the cost of the permit re-opening and their time, often just a couple hundred dollars. If work was not performed you will want to let the City building/permit department know that, at times this will be enough for the building department to close the permit out. If not, you will want to contact a contractor who can take care of closing the permit out for the parties. Again they will typically charge the administrative costs for re-opening the permit and the time to close it out. While this is often times inexpensive, these costs can vary greatly if additional work is needed to close out an expired permit.

Don’t forget to communicate your findings with the title company so they can assist or let you know if there are any other issues relating to the property.