5 Reasons Why Building Permits Are So Expensive

When doing construction or remodeling work, you’ve probably come across an unexpectedly high cost: building permits. It can be irritating to have to pay for permits on top of the work, but there are some good reasons they’re expensive.

Here are 5 characteristics of building permits and the reasons that they’re expensive:

1. They’re inconvenient for contractors.
2. Building permits affect your home insurance.
3. Building permits improve safety.
4. Remodeling grants and loans are affected.
5. The cost helps to pay the inspectors and city.

Building permits tend to be a hassle for everyone involved, but they’re expensive for some very good reasons. Getting high-quality work is worth a little extra money and effort on the part of the homeowner and contractors alike. This article will explore why building permits are necessary and why they’re so expensive for homeowners.

1. Permits Are Inconvenient for Contractors

For major construction jobs, permits are part of the work too. However, this doesn’t make them any more convenient for the contractor. Contractors doing minor remodeling work may try to convince a homeowner to just pay for the work and ‘bypass’ the permit.

When you get a building permit, the contractor must physically go to a city or county office. There, they will typically wait in line before filling out extensive paperwork (depending on the job) and paying a fee. This takes time where the contractor could be doing paying work, and in this line of work, time is money. So naturally, they’ll charge extra for getting a permit.

After the work is complete, the contractor has to be available on-site when the inspector arrives – and many times, the inspector will give an open timeframe such as 9 am to 3 pm. This is a lot of time for the contractor to be ‘locked down’ and unavailable to do other paying work for other customers.

You can’t expect them to be available for free like we just talked about so that further increases the cost of a permit to the homeowner.

2. Building Permits Affect Your Home Insurance

Home insurance isn’t cheap, but it’s essential. Building permits ensure that a project is up to building codes, which an insurance company would naturally be very interested in; they insure the property, so it’s in their best interest to ensure your permits are in order.

This affects you, because, without the proper permits, an insurance company can increase your premiums or even cancel your policy. They’re able to do so because reputable contractors usually have no issue getting permits.

Contractors who would skip a permit are more likely to perform shoddy work that can cause property damage or even to people. Such properties are more of a liability for the insurance company, and they have little to gain from insuring the property.

3. Building Permits Improves Safety

Safety regulations aren’t cheap, unfortunately. This is because safety requires attention to detail and sometimes demands extra work. If you’re building a home or doing electrical remodeling, you want to ensure that the work gets done the first time correctly.

Building inspectors check common areas where contractors would be most likely to take shortcuts on the work in the name of saving money on labor or materials. Once certified, a property is guaranteed as safe for occupants.

Without a permit, contractors have no liability if something were to go wrong – the burden would be on you for hiring the contractor to work without a permit. However, with a permit, the contractor is responsible if the work is shoddy and damage to people or property occurred because of it.

4. Remodeling Grants and Loans Are Affected

There are many grants and loans in place that homeowners can apply for and take advantage of in order to improve and alter their homes at a reduced cost – sometimes this can be for handicapped access, essential repairs, or green energy grants, but there are many such programs in place.

Loans are another option, with home equity lines of credit being a popular method of getting money to remodel a home.

Regardless of the source, any lender or grantor will want to make sure the property is up to code. If you have significant work done to your home without the proper permits filed, this can cost you a chance of getting that grant/loan.

Having the right permits in place is expensive because it certifies your property as safe and well-regulated. These are very important when any official entities are looking at your property with any degree of scrutiny.

5. The Cost Helps To Pay the Inspector and the City

The cost of a permit isn’t just for the contractor’s time and effort to get it – part of the cost is that the salary of a qualified inspector has to be factored in.

Similarly, all of the people involved in the process of approving, processing, and sorting permits derive their salary from building permits. When someone skips a permit, they’re not only hurting themselves but also their local government workers.

What Are Building Permits and Why Are They Necessary?

A building permit is a local government agency’s official approval notice that grants you and/or a licensed contractor permission to proceed with a construction or remodeling project. Essentially, building permits are necessary to ensure the job is done to standard.

Building permits are typically divided into categories according to the type of work: carpentry, construction, plumbing, and electrical, being a few common types. Major construction or remodeling jobs would probably have a few or most of these permits involved.

Permits are essentially a guarantee that the contractor will perform the described project to meet or exceed building codes in your area.

An application must be filled out, where the work is described, and a building inspector will also visit the worksite and inspect the work upon completion. The contractor is usually required to be present upon inspection to answer questions and concerns from the inspector.

Sources

• Investopedia: Why Building a House Is So Expensive
• The Spruce: What Is a Building Permit?