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Question DetailsAsked on 11/5/2014

Who's responsible for unexpected costs because of rejected permit application?

I'm having my basement remodeled by a licensed contractor. He is responsible for getting the necessary permits; that's clearly stated in the contract. In turns out, however, that he didn't even apply for a building permit until mid-way through the project, after the framing and electrical were completed. The permit application was denied because the room needs an egress, my fireplace needs a hearth extension, and my whole house needs radio linked smoke alarms. So now the project can't move forward until these are in the project plan. Whose responsible? I think it's him since this was his failure to know the codes and to get the permit ahead of construction. If it's me, what are the consequences if I refuse to spend another $3,000 on the egress, alarms, and a hearth? If they aren't done, the project can't continue, and if it can't continue, isn't he in breech of contract? Can I sue him to recoup what I've already paid? Thanks!

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2 Answers


I used to be an inspector, and now I've been a remodeling contractor for 16 years. For something like a hearth, your builder should have known this since it's quite obvious that every house has them.

When dealing with the city, they sometimes ask for extra items to be done, like upgrade the existing battery smoke detectors for 120 volt smoke detectors with battery back-up. may some something the contractor couldn't have planned on. At the end of the day..., if it wasn't something your contractor planned into the scope of work, it's up to the homeowner to comply with the city's requirements. That may mean that you have to pay extra

Answered 5 years ago by CraftsmanConnection


Any delay costs due to him not getting a permit till half way through the job certainly should come out of his pocket - though you might have to sue to get it unless the delay costs are coming from subs, in which case he should cover that cost directly.

Now comes the question of the egress (presumably you mean a legal egress window), the hearth size, and the smoke alarms - those are design items. If you had an architect design the remodel, he should have caught that - so the delay costs should be covered by him or his E&O (Errors and Omissions) insurance, though the actual normal cost for installing them would be your cost because you would have had to pay for them anyway had they properly been in the original design. Certainly those requirements should have been known to the designer - so if the contractor did the design (which is legal in many states for up to 2 or 4-family homes), he would be responsible for designing it right, and also for any delay costs unless specifically excluded under the terms of your contract. AND - if his scope was to do a certain remodel to make that area a bedroom AND pass inspection for a certain amount, then those items that are required to pass the inspection are is responsibility. The only exceptions would be unforeseeable change of conditions or acts of god or something your fault. AND - if the late permit filing caused these requirements (meaning if they came into effect between start of job and when he got the permit) then their cost would be his responsibility for that reason as well.

Sounds like maybe the building inspector came down hard on the inspection because of the late application. That is not unusual, for an inspector to go extra hard for awhile on a contractor who has been sloughing off on getting building permits, even though it commonly hurts the homeowner as much or more than the contractor.

A couple of things that sound possibly a bit hokey here, and $3000 for those added items sounds high by 2-3 fold to me, depending on specific circumstances.

1) the hearth extension - a non-combustible hearth mat in front of the hearth costs under $100, permanently installed fireproof hearth slab commonly meets that requirement for about $200-300 - unless this is a case where there was basically zero hearth, in which case probably about $300-500 for a typical (not fancy stone) one.

2) an egress window, cut into a wall where there is not one now, typically $500-1200 depending on whether you have to cut into the foundation or not to install it and whether you have to build an outside well with steps up to ground level for egress.

3) radio linked (presumably radio-linked to avoid running the usual interconnecting wiring) should cost about $100-150 each installation during a remodel. And I would question why the whole house - because a basement remodel would normally affect only the area being remodeled, not require upgrades house-wide UNLESS your house already fell under a code requiring interconnecting alarms (in which caseshould only require a run from the new alarm to any one of the others upstairs), though I suppose there may be some code jurisdiction requiring that. However, a quick web search turned up such cases only in the UK.

Just a gut feeling but you might check with the actual building inspector yourself, or ask to see the inspection report when talking to the contractor about responsibility for delay costs - because while the building inspector may have required these items, it is also possible he did not and the contractor is trying to add on some additional work at the end to bring his profit back up after any iffy performance, and that these items were not actually required. For instance, generally a basement room would only need a legal egress window (in addition to the door of course) if it were being configured as a bedroom, not as a den or rec room.

As for not paying - you certainly have a dispute. Unfortunately, if these items are actually being required by the building inspector, without the final inspection the room is in legal limbo and could (in some jurisdictions where they check these things) cause problems when you go to sell if not before - particularly the fire alarm and egress window if being marketed with that room being counted as a bedroom in the listing.

You said - If they aren't done, the project can't continue, and if it can't continue, isn't he in breech of contract?

That is a nasty piece of circuitous reasoning - are you sure you are not a lawyer or a politician ? If you fail to pay so he will not finish the work due to lack of contractual payment, then yes he cannot finish the job, but that would put YOU in breach of contract, not him. he has noresponsibility to finish the job if you fail to make contractual payments, or indicate you arenot going to pay. If any of the items are NOT required by the building inspector, then not paying for them and telling him not to do them is certainly legit, assuming they were not in the original scope of work - basically you would be turning down a proposed change order, and he wouldhave to finish the job without them at the agreed-uponk original price. Otherwise, you could negotiate that the job end now or without doing those items with a contract amendment - though that would leave you without a final inspection so you would not have a passed inspection on his OTHER work either - leaving you potentially in the lurch for unpermitted construction, as well as possibly having other improper work in place.

If you can't resolve those issue and get the job finished, then time to talk to an attorney - because if you fail to pay what the contract calls for, either as progress payments or after he has completed the work as may apply, then he can sue YOU for breach of contract and also put a lien on your property for what you own him - which become a mess real quick, especially if your mortage company,construction loan lender, car loan company, credit card companies etc get wind of it and enforce a mutual default clause in your contracts with them and demand immediate payment of ALL your debts.

Answered 5 years ago by LCD

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