Feb 23, 2008

Why Do So Many Homeowners Fail to Get Permits for Remodeling?

Inspector Paul RudeGetting It Done. Paul A. Rude, retired California General Contractor and Certified Member of the American Society of Home Inspectors, answers your questions on remodeling, dealing with contractors, and home maintenance.

The law in California and nearly all other states requires a permit for just about any remodeling project, so most homeowners get permits, right? Wrong. Private home inspectors see non-permitted work every day. Here in the San Francisco Bay Area, the consensus among experienced ASHI inspectors is that at least 60 to 70 percent of all home remodeling is done without permits. When I ran this number by a local city inspector with more than 20 years of experience, she laughed and said it sounded too low.

Why is so much work done without official sanction? First, the application process can be daunting. Many communities have obscure and sometimes unbelievable restrictions, often intended to maintain the "authentic" character of their neighborhoods. If your bath requires changing a single window, you may have to pay for a design review, additional drawings, or even a public hearing. In general, the larger the city, the more complex the requirements, although some small, exclusive cities also have very stringent rules.

And a bureaucratic blessing doesn't come cheap anymore. In the old days, permit fees were nominal, but California cities have seen their tax base dwindle since Proposition 13 passed in 1978, and they have jacked up all sorts of fees to compensate. A permit for a modest remodel can easily be $2,000 or more -- not to mention that city offices are almost never open, except when you have to take time off work to visit them.

Then there's the tax thing. In California, under Prop. 13, property taxes are based on the price you paid for the house, plus limited annual increases and local assessments. If you bought your home 15 years ago for $150,000, your taxes might have been about $2,000 a year at first. With annual increases and new assessments, they might now be $3,000 or so -- still low by present standards. But an addition or major remodel will be assessed at today's values, according to a formula in the state tax code. The cost of a large addition could easily exceed the original cost of the house, possibly doubling the taxes. If you stay in the house long enough, the tax bill may eventually exceed the construction costs.

So, do you get a permit or not? Follow your conscience. But if you're going the outlaw route, talk to the neighbors first. Few cities have the resources to monitor neighborhoods for power-saw noise -- the main source of Stop Work orders is complaints from neighbors. If you have a long-running feud with the guy next door, he might get even by calling in your unlicensed bath remodel. If a neighbor's big remodel project does have a permit, the city inspector will be coming around and might notice your off-the-books project. Even if you play by the rules, it's always best to let folks know what changes you're planning. It's just human nature to be agreeable when someone consults you in advance, and to be annoyed when noise and contractors' trucks show up unexpectedly.

Paul is the owner of Summer Street Inspections in Berkeley CA. His opinions are based on conditions in California and the San Francisco Bay Area. Conditions elsewhere may be substantially different. Contact Paul at paul@summerinspect.com. To find an ASHI inspector in the Bay Area, go to www.ggashi.org. Elsewhere, go to www.ashi.org.

2 Comments

I got a permit and did it as I was supose to. I hired a box store to install a door. They did not get a buck inspection during the installation just a final inspection and threatend me to rip out the trim work to check it out. Finally the county inspector came and asked if we were happy with the job and we answered yes and he signed. The box store has use scared and said that the county could put a lein on the property. I assume when we paid box store to get permit they handled the whole process and they admitted fault but wouldn't pay to replace the trim work to open it up.

So will I get a permit again. Hmm..... yeah but will follow up on those signature on permit.

I think many people do inside projects and don't get permit but when it involves the outside of house or an addition they do get permits.

I guess I can understand not wanting to pay permit and raise your taxes but when you sell the house won't it be a problem and may have to change it back?