Permit for Residential Basement?

[lefty08]

Ok. The last two residential basement remodels that I won the bid for did not want any permits. Homeowners said they could not afford any increase in property taxes. As the EC I walked away from both jobs. My business is relatively new. Started my own company in June of 2008. I am trying to do everything "by the book", but I can't keep losing jobs to homeowners who do not want to have permits pulled. How do you guys handle this situation? Do you just do the work with out a permit? How would you handle the contract? I personally don't want to perform any contract work without the required permit.

 

[Dennis Alwon]

I generally try to convince the HO that the permit is in there best interest. I usually work with a GC and in most areas around here the GC gets all the permits under his permit. Separate inspections but it is all paid for by the GC. I rarely even get involved in calling the inspectors anymore.

Let's face it-- you want to add a few recep. You charge $200 and the inspection cost another $50.00 or more. It is hard sometimes to convince people of that.

 

[satcom]

Ok. The last two residential basement remodels that I won the bid for did not want any permits. Homeowners said they could not afford any increase in property taxes. As the EC I walked away from both jobs. My business is relatively new. Started my own company in June of 2008. I am trying to do everything "by the book", but I can't keep losing jobs to homeowners who do not want to have permits pulled. How do you guys handle this situation? Do you just do the work with out a permit? How would you handle the contract? I personally don't want to perform any contract work without the required permit.

So the guys on here that are licensed, insured, and have invested time and money in building a business, secure permits when and where required, if a customer wants you to skirt the laws, he may also, have no regard for the laws that require payment of contracts.

The I don't want to pay the taxes on the work, is old thinking, that goes way back.

 

[Volta]

Good for you. If the customer starts out with that discussion, It is worth walking away. Hard to do sometimes, but work that is to be inspected is almost always better and more complete.

Sometimes, if I am unsure how the customer feels about it, I find out when I display the permit. You can get some wild reactions, but when they say, "I didn't know you were getting this inspected", I get to point out that it is the law, and I didn't know they wanted to break it. But the stress wears off eventually, and sometimes the HVAC or other contractors get replaced with someone licensed as a bonus :roll:.

 

[yucan2]

Ok. The last two residential basement remodels that I won the bid for did not want any permits. Homeowners said they could not afford any increase in property taxes. As the EC I walked away from both jobs. My business is relatively new. Started my own company in June of 2008. I am trying to do everything "by the book", but I can't keep losing jobs to homeowners who do not want to have permits pulled. How do you guys handle this situation? Do you just do the work with out a permit? How would you handle the contract? I personally don't want to perform any contract work without the required permit.

It would be wrong for anyone on this forum to tell you to knowingly skirt the law.

Having said that, it would also be unrealistic to believe that some of us haven't.

This is a matter of conscience. A decision only you can or should make as only you will be called upon to deal with the circumstances of whatever decision you ultimately make.

 

[ceb58]

Homeowners said they could not afford any increase in property taxes.

The only time I have seen an increase in property tax was when some one added on more sq. footage to the home. People think that just because you pull a permit the tax office is ready to attack when that is not always the case. But in any case you at the same time can remind the HO that if they proceed with unpermitted work and something happens they run the risk of there home owners insurance not paying off due to unpermitted, uninspected work.

 

[wawireguy]

As a professional contractor do NOT do work on this scale without a permit. You take on way to much risk on this. If something goes wrong the owner is going to go looking for you. The insurance company is going to go looking for you. The State is going to go looking for you. If you get caught working without a permit you will be fined and possible lose your license. You will run into customers wanting to buy materials. They will want to do part of the work which will not be up to code or safe. If it burns guess who gets the finger pointed at them.

 

[infinity]

For me doing a basement build out, no permit, no job. Walk away.

 

[stevenje]

On a lot of these smaller homeowner jobs it often comes down with one or more of the other "subs" not being licensed, bonded and insured. I don't know how many times I have heard, "well you know my brother in-law said he could to do the plumbing but he doesn't have a license". My response is "jeeze that's great, but I won't put my license and livelyhood in jeopardy because he can't pull a permit." It's all about money and will always be. At some point we all have to draw a line on where we stand on this never ending issue. It is only going to get worse in this downward spiraling economy.

 

[LarryFine]

The only way to do an unpermitted/uninspected job that should be permitted and inspected is to do it for cash and with no paper trail.

In other words, leave zero proof you were ever even there, and be prepared to deny it to the very end if it ever becomes a legal issue.

If you're not willing to work that way, and pocket the cash unreported, then you shouldn't do the work without permit and inspection.



Disclaimer: I'm not advocating that anyone do what I described above; I'm just using it to paint a complete picture.

 

[AV ELECTRIC]

Another problem with not providing permits is the sale of your house . If you have physically changed the description of the house from the previous sale you may be on the hook for getting it inspected and possibly brought up to code at the time you are selling the property . This can be more expensive and problematic then the rise of your taxes .

 

[lefty08]

Thanks for the input fellas. I am also of the opinion of "doing a basement build out, no permit, no job, walk away". I never tried just pulling the permit and springing it on the homeowner. I try and be upfront and honest from the get go. I guess that would be an alternative, but around here the electrical permit is tied to the building permit. If the home owner never got the building permit, that would put his/her whole project on hold. In a way I guess that would "force their hand to do things the right way", but at what cost. Now you would have a ticked off home owner, that still owes your company money.
For me, I guess I'll just continue to walk away from jobs like this. It just burns me up knowing I got the job, but because I want to do things the right way I have to walk. Not to mention my time invested in performing the estimate, take-off, proposal etc. was a complete waste of my time and money.
Funny you mentioned insurance company and liability issues. The current basement job I walked from was my business insurance agents home. The very guy I bought my business insurance from wants me to wire his basement remodel without a permit. Go figure!

 

[jumper]

I generally try to convince the HO that the permit is in there best interest.

Spot on. As a home owner, I have hired a variety of contractors and have done some remodeling myself. The permit and inspections mean that if there is a problem, I am covered by my insurance.

I also tell people that if they need to hire someone that means that they they cannot do the work themselves and that the permit and inspection will mean that that the work is correct, in most cases.

How can a home owner know he is getting a legal install if it is not inspected.

Let's face it-- you want to add a few recep. You charge $200 and the inspection cost another $50.00 or more. It is hard sometimes to convince people of that.

Agreed, I tell them that my home is worth a lot more than 50.00$ and I want a permit and inspection. The inspector is on my side as a home owner.

 

[jumper]

Funny you mentioned insurance company and liability issues. The current basement job I walked from was my business insurance agents home. The very guy I bought my business insurance from wants me to wire his basement remodel without a permit. Go figure!

The man is a fool.

 

[e57]

The only time I have seen an increase in property tax was when some one added on more sq. footage to the home. People think that just because you pull a permit the tax office is ready to attack when that is not always the case. But in any case you at the same time can remind the HO that if they proceed with unpermitted work and something happens they run the risk of there home owners insurance not paying off due to unpermitted, uninspected work.

In the case of a basement (non-finished habitable space) - finishing it and making some extra 'bonus' rooms out of it - will in many communities have the tax man sitting at the permit counter helping to determine the new habitable sq' of the building, and shortly after - its value, which may or may not be based on size, but still market value - and yes - nailing you for every dime. Why - that's their job, and they need to fill the bank accounts of the AHJ aka city or town. Most places are a little more subtle - they wont sit at the counter, they get a list from the permit office, then show up later to reassess you. Example: We got reassessed for repairs to a deck - because we pulled a permit. Why they have bills to pay... Why did I pull a permit, because down the line I want a record of repairs to it, and it's existence over a retaining wall.... Did it increase my taxes - no - they went down slightly... (like $25...)
Now closer to the tread - I have a finished -completely unpermitted unit with kit and bath in my basement - that we bought with the house... But is not connected to the living space above... We call it "storage"... (And that pretty much what we use it for too...) - Since it did not have permits - it does not exist! I once had some gas repairs, and the plumbing inspector was looking to give me grief about it - talked him into allowing me to remove the gas line to the "storage' areas stove... To limit the scope of the permit... So I still have 2 stoves in the house, only one is connected in my kitchen - only one is assessable... The Assessor came right away (two weeks or so) - 'whats back there?' - storage... 'No operational appliances?' - nope... Result - up slightly. (like $25...) But if I pull permits for putting a piece of sheetrock in my garage that would tie the 'storage area' to the rest of the habitable space above - you can guarantee my taxes are going up substantially... Because the value as a storage area is one thing, the value of the house as a whole is another - which is what it would be based on... But the value of the construction is based seperately depending on what it is... My property is a 1300sq' home to the assessor, the little bit of sheetrock would make it 2000sq' in the eyes of the assessor - then I would have to argue its total value. Which may or may not change... In todays market...

So - I can see the worry some people might have with permits, but permitting a basement remodel 'right now' in this market may serve them better in the long run. But I doubt anyone will take any advise on that. Because of fear of the tax man...

For the record though - I have had customers complain - to me after the fact - that they did not know the permit I pulled for thier 'service upgrade' would trigger a reassesment. As if I lead them down a dark path... Then I ask - well how much did it change? And it's peanuts... (Because they are new homeowners.) But there would be no other way for me to do it.... If you owned a home for 30-40 years - it might be a much bigger shock... (IMO suck it up - you haven't paid your fair share in a long time... ) Another example - And a company I used to work for bid on the electrical and landscape lighting there. (didn't get it.) Larry Ellison Reassessed - $3M refund - because there is little market for his palace.... It sent a wave of people begging to be reassessed - and many of them - lower taxes...

 

[GeorgeB]

The only time I have seen an increase in property tax was when some one added on more sq. footage to the home.

In SC, I had permitted (non electrical work, but that's not the issue) work performed to repair and make legal a deck (yes, added about 36 sq feet).

When the inspector came, he said that the SC law that increases cannot exceed some annual number does not apply when ANY INSPECTED WORK IS DONE, and assessment is upped to FMV. My property value jumped to 130% of my neighbor from 85% of my neighbor.

I did the right thing, but it has cost me about 400/year, I'd guess, since.

Most of my neighbors do not get permits for these jobs; my builder was surprised that I did, and said he considered making it legal as part of a repair wouldn't require him to feel the need.

 

[satcom]

In SC, I had permitted (non electrical work, but that's not the issue) work performed to repair and make legal a deck (yes, added about 36 sq feet).

When the inspector came, he said that the SC law that increases cannot exceed some annual number does not apply when ANY INSPECTED WORK IS DONE, and assessment is upped to FMV. My property value jumped to 130% of my neighbor from 85% of my neighbor.

I did the right thing, but it has cost me about 400/year, I'd guess, since.

Most of my neighbors do not get permits for these jobs; my builder was surprised that I did, and said he considered making it legal as part of a repair wouldn't require him to feel the need.

In many states, they reassess every 5 or so years, and when they do any improvements made are usually a wash, and in most cases you may be paying less tax then a neighbor the made no improvements. No many people really understand the assessment process, and believe any tail someone tells them to be fact.

Last year we had an area homeowner suffer a huge loss on the sale of his home, after the sale the new owner discovered he could not occupy the home, do to a non inspected basement job, they could not find anyone licensed to seal the work, and they had to gut the entire basement $120,000 in 3 dumpster, and if they can find the guy that did the work, I am sure there will be room for him, in the county lock up.

 

[AV ELECTRIC]

I recommend that there will be no raising of property tax for at least 2 years if you make any improvements to your property, That would provide a possible shot in the arm for construction outfits permit office and inspectors . Sell it like cash for clunkers .

 

[Article 90.1]

Tell your customer to watch a few episodes of "Holmes on Holmes." After seeing what happens when homeowners have work done without permits they may change their mind... or not.

Where I run my business there are dozens of jurisdictions, and dozens of utilities, each with their own uniques requirements, and amendments to the NEC, all of which are documented, at least. But what does differ widely is what does and does not require a permit. Many of the jurisdictions won't issue an E-permit unless a building permit has been pulled first, it is always a struggle to explain that there are no structural changes taking place and that we will be the only trade involved, ex. service change. Once they finally get that concept, they issue our permit.

Taking my contractor cap off and putting my homeowner cap on, I wish that EVERYTHING required a permit. Yes, I know it is crazy, but think about it the next time you go to buy a home, who has done illegal work in the house before you? How safe is the house really, what is hidden behind the walls?

I'm curious of what the OP's communications with the HO are? Are you showing a line item for the permit fee(s)? We have moved to a "job fee" proposal/invoice system which includes sales tax and permit fees. Like when we travel, do you really want to hear that your tickets cost $700 dollars, and "there will be a $50 per bag fee"? Just tell me it is going to cost me $750 upfront and lets get on with it. (I'm sure this last paragraph will stir the pot a bit)

I don;t understand why a property owner, residential or commercial would not want ANY work on their property to be inspected. We inspect our vehicles where it is required, but not our homes, where we eat sleep and live, doesn't make sense to me.

 

[RooKie12]

I wouldn't do it without a permit but I would contact the local Inspector and make him aware of the situation. To allow the next man to get the job just because he doesn't follow the rules is BS. I would send the Inspector over and let him convince the Owner they better get a damn permit.