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July 26, 2022

Why Contractors Should be Leery of Unpermitted Work

Permits are often a significant part of the contracting world, and many experienced contractors have run into a similar issue: Arriving at a job site where permits that should have been pulled were not. These are risky situations for any contractor, and even the type that some might be best-off avoiding in certain settings.

At Contractors School, we're happy to provide numerous forms of continuing education and contractor licensure prep, plus several other resources and tips to those starting or expanding their contracting business. What are some of the common reasons why job sites may not have proper permitting, and why should you be cautious in these situations? Here's a basic primer.

Property Owners Trying to Skimp on Costs

Perhaps the most common reason that job sites don't have the proper permits pulled is that the property owner is trying to save on costs. They may be hoping to avoid fees, or they could believe that the work being done isn't significant enough to warrant a permit.

In either case, this can be a big gamble for the property owner - and one that could come back to bite the contractor. If authorities find out that work was done without a permit, they may require that the work be undone or redone entirely to meet current code requirements - meaning extra time and expense for the contractor, and a very unhappy property owner.

Even if the work is able to pass an inspection, there's still the potential for problems down the road. If there's an issue with the work that's being done, and it's later determined that a permit should have been pulled, the property owner could come back and try to hold the contractor liable.

Owners Aren't Sure on Needs

In other cases, lack of permitting will be much less intentional -- and will instead speak to a simple lack of understanding on the part of the property owner. They may not be familiar with the permitting process, or they may not be sure what types of work will require a permit.

This can obviously create a big risk for contractors, who could find themselves in hot water even if they had no intention of cutting corners. However, there may be some situations here where you're able to work with the owner to get the proper permits pulled before starting work.

Raising Property Taxes

Finally, some property owners may be reluctant to pull permits because they're worried about the potential impact on their property taxes. In some cases, getting a permit for work can raise the value of the property - and thus, the amount of taxes that will be owed.

Of course, this is another situation where the risks far outweigh any potential rewards. If authorities find out that work was done without a permit, the property owner could be hit with some significant penalties - and they may try to pass those costs on to the contractor. If you're the contractor here, you should not proceed unless the property owner agrees to have the proper permits pulled.

For more on this, or to learn about any of our contractor education services, speak to the team at Contractors School today.

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