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Open work permits can become a buyer's burden in New York City

If you've never bought property in New York City before, open permits are a major source of concern that you need to know about.

In NYC, all but the most basic of cosmetic renovations require homeowners to open a work permit from the Department of Buildings. Once renovations are finished, the DOB is supposed to inspect, make sure the work was done according to code and then close the order. Naturally, things don't always work out that way, which can spell big trouble years later for you if you've purchased the problem along with your dream home.

Open orders may be lingering for any number of reasons, some more problematic than others. The homeowner may have just decided against renovating and forgotten all about the open order. Or, they had the work completed and just never arranged for the DOB inspection. Older records may have been accidentally left incomplete, gotten misfiled or simply destroyed.

Another likely, but unfortunate, scenario is that the homeowner at the time the permit was opened did the work alone or with the help of friends and never asked the DOB to inspect because the work wasn't up to code.

One of the major headaches involved with open permits is that they don't show up on a title search—they have to be tracked down as part of an independent search. Buyers who are unaware of this little facet of the process can end up purchasing a house that's heavily encumbered with old, open permits.

What exactly would the consequences be? Fines are possible (if unlikely), because you take on the burden of those open permits when you buy the property. What's much more likely to happen is that you'll eventually want to make your own renovations and find that you can't even get a new permit because there are too many old open ones already associated with the property.

Closing out the old open projects may not be easy or inexpensive to do, either—building regulations change all the time. Even something that was properly completed when it was first finished could now be sorely in violation of newer codes.

You don't want to take on the burden and expense of open permits when you're buying your new home. An attorney can help you negotiate with the seller to get those old permits closed out before the sale goes through and traps you with the consequences.

Source: Greenberg & Wilner, "Helping You Resolve Title Issues," accessed Nov. 25, 2016

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Greenberg & Wilner

Greenberg & Wilner
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