# Change of ownership mid permitted construction



## jar546 (Sep 16, 2020)

How do you handle a situation similar to this?

Owner is under contract with contractor
Owner sells property before job is complete
New owner wants to use same contractor to finish the job

Do you have a change of ownership form?
Do you require a new contract with the new owner?  We would along with a new NOC filed with the County.
Would you issue a new permit and close the old one?


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## Mark K (Sep 16, 2020)

Keep  the permit active and note the change of ownership.  You are regulating the building not the owner.

Assume a building was being built but rather than the owner being an individual the building is owned by a corporation which was then owned by an individual.  The owner of the corporation sells the corporation to another individual.  The owner of the property has not changed even though a different individual owns the corporation.


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## e hilton (Sep 16, 2020)

The contractor will definitely need a new contract with the new owner, and there is going to be some complicated paperwork to define the split in obligations.


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## Keystone (Sep 16, 2020)

Maintain old file, close out. Have new file and info completed, access fee as appropriate and move forward. If your not comfortable with that have the new owner and contractor generate and notarize and agreement accepting approved plans and conditions as is without conditions.


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## Mark K (Sep 16, 2020)

The Owners contract with the contractor is none of the business of the building department.

What authority does the building department have to require the owner and the contractor "..generate and notarize and agreement accepting approved plans and conditions as is without conditions."  If you find that the work is not being done in accordance with the approved construction drawings you can shut the job down.  Before you try that, have a meeting with the Owner, the Owners attorney and the City attorney.  Be prepared to have them educate you on what you can not do.

If you close out the file does this mean that you will issue a new permit and require compliance with all new laws passed since the original application was submitted?


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## jj1289 (Sep 17, 2020)

We would require the new owner fill out a new application for the project since the permit belongs to the owner and if no change in scope of work no fee is charged


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## tmurray (Sep 17, 2020)

The way we handle this is that the "who did what" is irrelevant to me. The current owner owns all the problems. It does not matter who owned the property when the violation was created, it is the responsibility of the current owner to have it corrected.

The only issue we see is that we take a refundable deposit for major construction. This typically goes back to the person who initially paid the deposit (unless it is acted on). We just need clarification of who this deposit needs to go to at the end of the project.

My municipality owns the permit, not the property owner or the contractor. We are not "selling" permits, we are issuing them. We have re-issued them with new owners information though.


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## rogerpa (Sep 17, 2020)

Mark K said:


> The Owners contract with the contractor is none of the business of the building department.
> 
> What authority does the building department have to require the owner and the contractor "..generate and notarize and agreement accepting approved plans and conditions as is without conditions."  If you find that the work is not being done in accordance with the approved construction drawings you can shut the job down.



The C of O is attached to the BUILDING, not the owner. As long as there is no change in occupancy use or the approved construction documents never mind. The contract between the old and new owner is outside the purview of the AHJ.


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## steveray (Sep 17, 2020)

I don't like working for free, so we document the change and play through.....Be it contractor change or owner....


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## Keystone (Sep 17, 2020)

Mark K said:


> The Owners contract with the contractor is none of the business of the building department.
> 
> What authority does the building department have to require the owner and the contractor "..generate and notarize and agreement accepting approved plans and conditions as is without conditions."  If you find that the work is not being done in accordance with the approved construction drawings you can shut the job down.  Before you try that, have a meeting with the Owner, the Owners attorney and the City attorney.  Be prepared to have them educate you on what you can not do.
> 
> If you close out the file does this mean that you will issue a new permit and require compliance with all new laws passed since the original application was submitted?



The agreement is not bldg department business between owner and contractor however accepting the inspections to date pass or fail and plans as prepared and approved is. Just because a person signs a new permit application does not mean they’d understand and accept what may be within those muni files.  I’d feel a notarized agreement is more friendly then requiring the new owner submit the same plans for review and approval.  Also note I did write, “I for you’re not comfortable mech with that”.  This isn’t one of many options not the only one on the table.


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## VillageInspector (Sep 17, 2020)

The only thing I would do is note the change of ownership in the files. As long as the same contractor remains on the job building to same set of plans its irrelevant who owns the building. The main thing is issuing the CO to the correct party hence the note of ownership change in the files.


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## classicT (Sep 17, 2020)

Typically, we are are getting a new application so that we can update the permit in our system, and a letter of release from the prior owner.


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## e hilton (Sep 17, 2020)

tmurray said:


> The only issue we see is that we take a refundable deposit for major construction. This typically goes back to the person who initially paid the deposit


When a property is sold, there will be a list of deposits such as utility construction bonds, utility account application fees etc, with an agreement as to what happens when it is refunded.


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## mtlogcabin (Sep 17, 2020)

Here we would just change the owner info on the permit. In Fl you should probably require a new Notice of Commencement filled out and posted so the new owner gets properly notified of any possible liens


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## tmurray (Sep 17, 2020)

e hilton said:


> When a property is sold, there will be a list of deposits such as utility construction bonds, utility account application fees etc, with an agreement as to what happens when it is refunded.


Well, aren't you lucky. That is certainly not my experience. We usually get to the end of the project and neither the current owner, nor the former really know who it goes back to.


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## e hilton (Sep 17, 2020)

tmurray said:


> Well, aren't you lucky. That is certainly not my experience. We usually get to the end of the project and neither the current owner, nor the former really know who it goes back to.


Then shame on the lawyers or title company people handling the sale.  They are supposed to be looking for outstanding liens, encumbrances, and title flaws before the papers are presented at closing.  If there is no agreement, inwould say it goes backbto the company that made the payment.  The new owner can’t prove it’s theirs.


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## steveray (Sep 17, 2020)

Ty J. said:


> Typically, we are are getting a new application so that we can update the permit in our system, and a letter of release from the prior owner.


So if the previous owner doesn't "release" , what do you do?


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## classicT (Sep 17, 2020)

steveray said:


> So if the previous owner doesn't "release" , what do you do?


Permit expires. Must apply for new permit.


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## mtlogcabin (Sep 17, 2020)

All fee's are ultimately paid by the owner no matter who wrote the check. It is not the jurisdictions responsibility or obligation to refund those fees because of an ownership change in the middle of the construction. Those items are between the buyer and seller not the jurisdiction.


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## jar546 (Sep 18, 2020)

One of the potential problems is that in many counties, you can't close on a house when there is an open permit which may change the way you handle the situation.


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## e hilton (Sep 18, 2020)

jar546 said:


> One of the potential problems is that in many counties, you can't close on a house when there is an open permit which may change the way you handle the situation.


Got a great story on just that.  

House behind us went into foreclosure, the single guy got into financial trouble and couldnt make payments.  And did zero maintenance for years.  Bought by a flipper who did a huge amount of work on it, more than just paint.

Deck on the back was completely removed and rebuilt. Because it is so close we watched the work every day.  I saw that the deck was not being built to any standards by Mutt & Jeff, so i called the county inspection office and left a message.  Apparently nothing was done, I didn’t do anything else, i had made a reasonable effort to alert them.  

Fast forward about a year and a half.  The new owners have put up a 6 ft wood fence, which is not common here, and an above ground pool.   About 3-4 weeks ago a county inspector showed up, said the permit was open, no one had called for a final.  He looked around, and told them the deck was not acceptable and needed to be rebuilt, and they had 30 days to get the pool permitted and all safeties installed.  Homeowner was really upset.


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## steveray (Sep 18, 2020)

Our State passed a law that all residential permits are "closed" after 9 years....Not completed or approved, but closed.....


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## my250r11 (Sep 21, 2020)

If contractor permit would just note the change of owner. If homeowner permit, permit is closed out and new permit to new owner. Here the owner of the permit is only a homeowner or a contractor that the permit was issued to.


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## ADAguy (Sep 22, 2020)

e hilton said:


> Got a great story on just that.
> 
> House behind us went into foreclosure, the single guy got into financial trouble and couldnt make payments.  And did zero maintenance for years.  Bought by a flipper who did a huge amount of work on it, more than just paint.
> 
> ...



Bought as is? Failed to do due-diligence.


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