New Law to Close Open or Expired Permits in Florida

The new Florida law to close open or expired permits (HB447 2019 and 125.56 of the Florida Statutes).

Finally, the government has gotten something right.They have created a law to help close out the dreaded open and expired permit issues plaguing the State of Florida. But, not so fast. 

You are most likely reading this article because you are involved in a real estate transaction. You are either a buyer, seller, real estate agent or closing attorney. You have been told the subject property in interest has an open or expired permit attached to it from the title company during the municipality lien search. 

You were also then told, there is a new law to help you close this permit expeditiously and with no hassle.

Well, I am here to give you my professional opinion as a state licensed certified general contractor on how this new law can effect you as the buyer, seller or real estate agent.

First, let’s break down what an open and expired permit is in Florida. 

What is an open or Expired Permit in Florida?

Most people not fully educated or familiar with the permitting process, typically interchange the terms, “open permit” and “expired permit”. But, there is a huge difference between the two. 

Open Permit:

An open permit in Florida means that a permit is currently “active” and is still within the 180 days of issuance or within 180 days of the the last inspection. The open status also means inspections can still be called for this permit.

Expired Permit:

An expired permit in Florida means that a permit is no longer active due to it being open for more than 180 days and no inspection history. This also means no work can be preformed under its scope of work legally. And, no further inspections can called to inspect this work under this permit.

Typically, most property owners running into open or expired permits are dealing with an “expired” permit.

As a Certified General Contractor, we are required to close all permits we open and that are issued under our license, unless due to fraud or lack of payment by the customer.

“Open” permits are usually really easy to close because the company who preformed the work, is most likely still in business. And, most times it is a minor oversight in their administration process to close the permit. Give the contractor a call and ask him to please close it.

And, since we are responsible to close our permits, your current contractor can just call for a final inspection with the building department and get the permit closed in a day or two as long as the work was done per the permit scope of work, Florida Building Code and required pervious inspections were completed.

On a daily and weekly basis we usually close “expired” permits due to the following reasons:

1. Missing final inspection(s)– All required inspections have passed and completed except the last one. The local building department just needs to do a final walk through of the project to insure nothing has changed to the scope of work permitted and all work has been completed per the permit and the Florida Building Code.
2. Failed inspections– All or some of the required inspections failed due to the work not being preformed per the permit or the Florida Building Code.
3. Code Violation(s)– The scope of work exceeded what the local building department permitted the owner/ contractor to do. So, the building department issued a stop work order and required additional work to be added to the scope of work on the permit.
4. Home Owner/ Builder Permits– The current/ previous owner had a homestead exception and preformed the construction project under the Owner/ Builder Statute in the Florida Statute Chapter 489. This type of owner most likely does not have any proper construction licensing by the state and did not understand the construction inspection processes. Which in my opinion and experience, did not complete the project properly in most cases.

Why are these major issues?

We are Florida’s number one and best permit closing service for expired permits. We have closed hundred(s) of expired permits. We have closed expired window permits, expired roofing permits, expired plumbing permits, expired 2,000 square foot addition permits and many-many more.

So, we get to see the good, the bad and the ugly of how expired permits are ruining real estate deals across Florida.

The New Law to Close Open and Expired Permits

The new law (HB447 2019– and 125.56 of the Florida Statutes) gives the building departments the ability to close expired permits if they deem the permit does not cause a safety risk.

This is seemly great right, but the issue is, most expired permits are expired for a reason.

Expired permits were not inspected by a neutral 3rd party (Building Code Inspectors with your local building department) who’s primary job is to ensure the safety of the public and that the construction project was built to the Florida Building Code at that time.

Pros and Cons of the new law :

(Not to be used as legal advice, please consult an experienced attorney to help you understand how this law can effect you personally and your real estate transaction):

Pros-

1. This new law helps close out many of the permits where there was no work completed, or the structure was removed or where you are going to replace a building system as soon as you take control of the property. Such as replacing a roof or adding a new AC system.
2. It protects licensed certified contractors like us from any liability of previous “contractor”.
3. Helps expedite sales of real estate by putting a bandaid on a typically unknown problem.

Cons-

(Where this new law lacks substance is where most issues are going to arise.)

SIDE NOTE: All Building Departments throughout the State of Florida currently have the ability to close expired permits before this law officially goes into effect! These are the main reasons below why there are still millions of permits expired.

1. The major issue still at play is, lets say for an example, you get a permit closed and the work was actually “completed” without an inspection and there are no apparent “safety issues”. YOU, nor the BUYER, nor the SELLER, nor the REAL ESTATE AGENT or the building department has any idea whether or not that work was completed properly. You are betting without any level of construction experience a project will not cause an issue in the future and cause significant damage to the property.
2. This law only allows the building department to close permits they deemed safe if it was 6 years before the current date and will not cause a safety issue. So, for projects with scopes of work related to structural additions, structural alterations, roofs, mechanical alterations, electrical work, some plumbing components, pools and pool enclosures you will still need to re-new a permit and call for the required inspections to close these expired permits.
3. This law also states that a person may be able to pull a homeowners permit to close an expired permit without adhering to the 1 year no sale/ no rent rule imposed on property owners who have Homestead Exception. Now, this makes perfect sense if the property owner was a construction expert that also carried the proper general liability/ workers compensation insurance to cover any future issues of that permit. What happens if the property owner needs to expose some work or make corrections to repair the project to bring it into code compliance? What if it fails the final inspections for engineering reasons? The property owner at that point must bring in the proper subcontracting trades to complete the work. The owner is also liable for each person on that project and insure they are covered by workers compensation and licensed properly to complete the scope of work under that permit. Which should start making you think, this is not just a simple transaction to preform. There are SO MANY what ifs and moving pieces in this scenario. I personally understand this issue because 9 out of 10 expired permits we close, result in additional work needing to be preformed. 
4. Building departments, specifically Orange County building department will close minor expired permit(s), but make a statement of, this does not release the owner from liability. Building departments have some cover, but still puts the liability on you, the owner.

As a building permit closing focused company, we understand this law is going to take business from us, and rightfully so in some minor instances.

I agree this issue is causing many real estate deals to fall apart and is the cause of much financial lost for current sellers of real estate who were not told about the expired permits on their property before 2015.

As a licensed certified general contractor, I understand the major risk in just closing some permits because there is a law that allows it.

Unfortunately, the future financial harm is unknown. The inherent risk with dealing with an expired permit is virtually unknown by the buyer, seller and the real estate agent.

What Buyers, Sellers, and Real Estate Agents/ Brokers Should Know About the New Law to Close Open and Expired Permits.

Sellers:

Correct the expired permit by using a state licensed certified contractor to close the permit. Relieve yourself of that liability and the headache if more issues arise while closing the permit. Contractors, specifically contractors’ like us know how to quickly expedite the permitting process and get permits closed fast at a reasonable fee. Also, check for an expired permit on your property before you find out one day before your closing.

Buyers:

DO NOT PURCHASE A PROPERTY WITH AN OPEN OR EXPIRED PERMIT. DO NOT PURCHASE A PROPERTY WITH AN EXPIRED PERMIT THAT WAS CLOSED USING A METHOD WITH NO INSPECTION. Unfortunately, I have countless stories of Buyers signing hold harmless agreements or being told by unlicensed and unqualified people to buy a property with unknown risk. If you are not getting your advise from a properly license contractor or engineer, you are not getting the proper advise and SHOULD beware.

Real Estate Agents/ Brokers:

I understand your position as well.

You want to help your client close the deal and provide a great service.

We work with and help agents all over the State of Florida close expired permits, we would love to create a relationship to help you close more deals.

So, be sure to check for expired permits at the onset of listing and at the time of contracting.

In closing, unless you are a registered engineer with a construction background or a state certified license contractor, you should not being using a law to close something that could harm you or someone else financially in the future.

Call me today at 407-204-1043 to discuss closing an open or an expired permit.

***Disclaimer: We are not an attorney, this information should not be considered legal advice. You should contact an attorney to understand your rights as it relates specifically to your subject property. This article is for informational purposes only.