Knowledge Mondays – Open Permits During a Closing

Open permits on a property may cause unexpected headaches in the event a homeowner sells or refinances their property. An open permit must be fully resolved before closing on a property. If an open permit is not resolved or discovered before closing, the open permit becomes the responsibility of the new owner. The new owner will be responsible for paying the fees and/or fines that come with closing the permit on the property. Thus, as a buyer it is crucial that the seller remedy any open permits before closing.

An open permit exists when a homeowner obtains a permit to perform work on their property and never finalizes the permit. The work on the property must be completed and an inspection must be performed for a permit to close. Open permits are sometimes unexpected problems because a typical title search may not disclose open permits. A title search discloses liens, mortgages, and restrictions on your property, not open permits. If you want information on whether there are any open permits on a property you must conduct a lien search. A lien search will disclose any open permits, taxes owed, or liens against the property. An independent search may also be conducted at the county’s building code department.

Additionally, if your real estate transaction has a standard FAR/BAR contract, a seller is not financially responsible for any open permits. A seller’s responsibility is only to assist and cooperate with the buyer by providing the seller with any plans or written documentation it has on the permits. However, as a buyer, you may request that an additional paragraph be included in your real estate contract that states that a seller is required to close the permit, including shifting the financial responsibility to the seller. Open permits may become costly for a buyer during closing and as a future homeowner because a buyer cannot open any permits to perform future work on the property without closing the outstanding permits on the property.

If you would like to discuss your purchase contract, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. *

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