When it comes to property upgrades and renovations, one of the foremost important questions are whether or not the project will need permits; and if so, whether the permit process makes financial sense. The issue many property owners are facing nowadays is not so much the cost of attaining a permit, but the time it takes to go through the process before a project can actually be physically initiated. Realistically, it can take months to upwards of a year to obtain the proper permits and a green light from a city office; and lost time equates to lost tenants and lost money.
Unfortunately, this is just one of the many side effects property owners suffer as government regulations and interference in real estate have increased in recent years. That said, the ever-present hand of the government is not going anywhere and we can all expect these regulations to not only continue, but continue to increase as we enter the next era of the real estate industry.
While there is little debate surrounding what is required by a city and why, incidental improvements coupled with tenant demands and time constraints can often blur the lines between what is legally required and what is deemed necessary by the owner.
So, how do you decide whether or not to pull a permit?
When making this decision, it’s best to examine the following questions:
- Will the modifications be structural or non-structural?
- Will Fire and Life Safety issues arise (i.e.: sprinklers, emergency exits, fire extinguishers, etc.)?
- Will your improvements significantly increase lighting or power usage triggering Title 24 Energy compliance?
- Will there be a significant change in use from the prior tenant to the new tenant or occupancy?
- Consider the size of the job, will demolition and construction require significant trash disposal?
- If so, does the city you’re working in have mandatory construction debris and recycling programs?
- Is the work inclusive of two or more floors of a building?
- Will parking be impacted?
- Do you need an architect to assist in developing detailed plans?
If you answered yes to any of these questions, pulling a permit is the best course of action. While it will certainly be the more time-consuming option, if any of the above mentioned areas will be impacted by the prospective project, you can rest assured whatever city you are working in will become involved at some point – be it a complaint from a neighbor or tenant, a report from a third-party vendor or just bad luck – so invest in a supersized bottle of Excedrin and deal with the permit headache now.