Benjamin Sens, Founder and CEO of BOSS Construction Group, joins The Virtual 5 for questions about permitting and Code Violations.
The Virtual 5 include Carmella Smith, Jeinny Greenwald, Nicole Rymer, Becky Hartley, and Gary Hartley.
The Virtual 5 Team is a Keyes team show that streams every Thursday at 5pm ET.
More information about The Virtual 5:
https://www.facebook.com/TheVirtual5
Transcript
Unknown Speaker
Hello, everyone, welcome back to the virtual five. So happy you can join us again this week, we’ve got a really exciting show for you plans. If you haven’t been able to catch up on all of our shows so far, please do so you can head to our video section of our Facebook page and we have everything there. Last week we kind of guided you through our process from listing to closing and, you know, business is happening. So please reach out to us. We have about 30 years of experience here collectively, so we can definitely take care of anything real estate in real estate related for you. And hopefully you brought some friends with you in a drink and you can enjoy our show today. And every Thursday, we’re here at five o’clock. So I’m going to go right here on part of the virtual five. Let me introduce The rest of the team, we have Carmela Smith,
Unknown Speaker
Becky Hartley, Gary Hartley
Unknown Speaker
and Jamie Greenwald. And that rounds out our virtual five team. So we look forward to hopefully, working with you. And if you have any questions or pages live 24 seven, you can always, always reach us. So, you know, there’s many different facets to a real estate deal and so many things can go wrong. And today we’re going to talk a little about permits and code violations, something that you probably don’t even think of that I think every one of us here can raise our hands that has been an issue in a deal usually right before a deal needs to close is usually the issue. So it’s really important topic that we’re going to discuss and we have our expert here today. Benson’s boss construction group, how are you?
Benjamin Sens
Hi, how are you guys doing? We’re doing great
Unknown Speaker
for being here today, like I said, I think it’s a topic that most people if you’re not in the industry or maybe bought a house and never had to deal with it, you wouldn’t know that this is a pretty big.
Benjamin Sens
Um, my my background is as a municipal Inspector, for a couple municipalities in Broward. A lot of my family’s in real estate, third generation real estate and again, I was constantly having agents with a lot of trouble and they were coming to me like you’re saying, right, right before a closing and so what I started doing with the real estate boards, and a lot of offices like we met in December as I started educating realtors on the importance of doing a lien search early. So understanding and this is a South Florida problem, these open permits and code violations. So again, that’s very important. And that’s a lot of the background about myself and it is a general contract. tractor I’m not looking for work for myself, I’m not trying to re engineer things, I’m looking to get these things closed out, represent your sellers the best keep the transaction on track. And sometimes these things can’t simply be closed out. So they’re very unique and complicated issues that you guys need a, you know, a consultant and a lot of times I see the agents getting caught up in this because it’s last minute and then the seller tries to contact their previous contractor and they end up getting involved in things they shouldn’t be sometimes things go awry, and they turn into bigger things and you know, you guys are the you guys are the relationship managers and you guys are the sales experts and I’m here to keep you know your relationship with your client good.
Unknown Speaker
Well, that hit everything. We like I said I’ve had it recently have that issue like a week before closing and it delay closing. You know, you’ve had issues where the company’s not no longer exist that sure are met. That happens a lot in South Florida unfortunately. So I’m happy you’re here to kind of guide us through and get some really useful information because it because it isn’t an issue. So you brought up you work with different municipalities. So that’s actually my first question are different permit restrictions, code restrictions or violations that are specific to each county municipality town or is it more of a statewide? thing?
Benjamin Sens
I’m glad you asked that. Nicole. We’ll start from the state, the state of Florida and House Bill 447. So Florida realtors were lobbying the state legislature for a long time to instruct the local building officials. If something’s older than six years, excuse me, and it’s not a violation, and it’s not a health safety matter. They were instructed to close those things out again, Most of these contractors, they’ve got paid full 100%. And but again, this either a permit hasn’t been issued or the permit expired or there’s a lien or code violation. So there’s a couple different tiers. But so this so the state legislature instructed the local municipalities close these things out, the building official and each municipality, which there’s dozens and dozens of in the Tri County area, they are the ultimate judge. They could take the state code further, for example, like around a pool that was built after 2000, you have to have a four foot fence. Well, the city of Weston took that. expanded upon that and took that out a little heavier in magnitude and said you have to have a five foot fence so the cities can take the Florida building code a little bit further. Cities also control zoning, they control landscaping, parking, any type of a static Next to a building so outside the building code, because I had a question from someone who’s trying to convert into multi units outside the building code, you have you have the zoning code. So someone asked me, for example, what is the minimum square footage for an efficiency? And I knew that the building code has requirements, but the zoning code regulated that even further. So they get very complicated and you have to know the people and the process. And constantly that process is changing. As building officials change and local people evolve the Commission, the manager, things like that. Some of these things change. So something I resolved in December, in the same city, an open roof permit. The resolution might be different in June today.
Unknown Speaker
Wow. Yeah. And that. That’s a little worrisome. There’s a lot of cooks in the kitchen. You always constantly has to be aware of. And like I said, this could really prolong a closing. It could affect, you know, depending on the loan that you have in the code issue, maybe a room wasn’t permitted, or properly. I mean, a lot of things that we as agents have to be cognizant of and be aware of so,
Benjamin Sens
so, so, very interestingly that you touch on that. Nicole, there. There is. Actually, I don’t want to I don’t want to roll into another question. So. Okay, no, no, like, what I, what I, what I was gonna say is a lot of these agents, they’re pulling lien searches very early in the game, when they list the property, and they’re finding out about these deficiencies, because they’re so close to the closing.
Unknown Speaker
Yeah, and that’s when it becomes the issue. do those things usually come up right before closing? And you’ve got two parties usually trying to move and then it? Yeah, it’s a lot of problems at the wrong time. So yeah, it’s better to take care of things, obviously, like most things, take care of it in the beginning, are you aware of it so that you can work on it so that it doesn’t go away.
Benjamin Sens
And so I have instances all the time where the sellers hit up during the inspection period. Then the lien search finds open permits. And if the buyer’s agent in as his contract, they put the sellers to close open permits and violations prior to closing it own expense. And I know you guys do that. So again, you don’t want your seller to be negotiated twice with and a lot of these things are a lot more cost effective to be handled really early than late. For example, if you’re trying to close out an open permit, and there’s other code violations around that and you call The city out to come out and close out the permit. Well, not knowing I could go ahead and clean some of those things up that may require a permit. So
Unknown Speaker
thank you so much. It was valuable, valuable
Unknown Speaker
information.
Benjamin Sens
Cool.
Carmela
Hi, Ben Lance,
Benjamin Sens
Carmelo.
Carmela
Joining us. We truly appreciate it. This is information that is very valuable to us time saving as well. Um, I have a question about who applies for the permit? Is it better for the contracting employee or for the homeowner? And whoever applies? Are they the ones liable?
Benjamin Sens
that’s a that’s a that that’s a great question. Because the So for example, if you’re if the property the owner of record has to sign the permit application, and it’s very important to know because I just submitted a building permit application earlier this week yesterday. If probably properties in a trust the building department wants to see a small copy of the trust. So they they want to verify the owner signing, they want someone to take responsibility and collect their fees. Now the license fee is your licensed general contractor, plumber, electrician, mechanical for air conditioning, so on and so forth. These people they need to be registered usually with the city or town, have liability insurance have other permits that are closed some cities even which I really shocked me, I mean, and the building department which I used to work for many and they say we’re not the contractor police, they even let contractors. They even let contractors have new permits issued to them when they have expired permits open. So again, those things need to be taken care of. But again, everything falls upon the homeowner Carmela everything you know when these permits are left open And your contractors paid full, even, even if they’re still in business there, Mia. And you know, and again, a lot of sellers say to me, but I, but I closed on this property, a lot of sellers say, but this property This was from three owners ago. So, again, it always falls on the current property owner. And they are always liable to to handle these things, even if they’re done by previous owners. Some of the cities are also starting to do re occupancy inspections, where they’re dictating before a sale, we need to come and inspect to see if it matches the tax roll and see if there are any violations on the property, which again, they’re using the transfer of ownership to cure violations in unincorporated areas of the county, and I’ve seen that a lot. So a lot of the cities are copying each other. But But yeah, the contractor should be liable. But unfortunately, it always falls on the homeowner. There’s one other exception. There’s something called an owner builder permit, which is very cool. It allows owners up to $70,000 to act as their own contractor. But it has to be a single family property. It can’t be an attached like a condo or townhouse, and it can’t be for like a pool or anything where you’re mixing water and electric but people pull their own permits as well but you’re left liable and you hold the city harmless.
Carmela
Okay, I have one follow up to that and an agent called me a couple of months ago and asked me my opinion. He was trying to get a permit taking care of the homeowner couldn’t do it. The building department he said he said that he could apply as the contractor as the real realtor. And that would close it but then the back STAY with Him forever
Benjamin Sens
shows is the show Yeah, that’s that’s not very common at all. I learned about that two years ago when I was at 2300 jog road and unincorporated Palm Beach County. I was actually working with a close friend at the time. And he told me that he said, and if I’m not if I think I’m answering this correctly carmella the city, if you’re selling your property, they will not let you do an owner builder.
Carmela
Yeah, it wasn’t his property. He was the realtor of the property.
Benjamin Sens
Correct? Correct. So the county says, if you’re the owner, they’re not going to let you do owner builder. If they find out the properties on the market. They usually find out the property’s been listed if they got a lien search request, an open permit search or they have other ways of finding out so Palm Beach County, which is the only place I’ve seen this allows realtors to close out open permits in certain circumstances because under the Department of Business Information regulations, realtors can handle construction up to like 1000 or 1500, which is, by the way, something that I would never, ever do. You know, not only do you have an interest in the sale, you’re causing a possible liability to your brokerage and your real estate license. You know, for example, I just, you know, I just advised a listing agent prior to listing the property because of the deficiencies that we found out about, hey, maybe you should only list this property, conventional or cash, because I know the deal won’t work out FHA or VA. Maybe you shouldn’t take a picture of an illegal addition and write illegal addition or so. Again, I can help agents out as an owners Rep. When when they’re looking to list properties to help them so they don’t get in those circumstances. But again, keep in mind a lot you know, not you guys but a lot of the people who were Light and in this business, a lot of new licensees, a lot of part timers and people, you know, when they see their commission in jeopardy, they will do some crazy things that don’t make sense. And again, this is where I’ve seen that five days, six days before the closing the county lens, a little carried out at them and they and the county and the building departments, they don’t care. They just want someone to take responsibility under a license for it, collect their fees and come out and inspect. But when I originally found out about that, Camille, I was I’m sorry, Carmela i was i was i was i was very shocked. I was very shocked. They were letting that go on.
Carmela
Thank you.
Unknown Speaker
Hi, Ben. How are you? Thanks for joining us. Hi, Becky. What’s up? I’m just interested in knowing what are the common types of updates that homeowners can do that don’t require permits.
Benjamin Sens
So for example, like paint Doing baseboards flooring in a single family residence doesn’t require a permit but in a condo it does because they check for the soundproofing or underlayment. Changing a fixture again, it all depends on the municipality that you’re located in. But at the end of the day, these municipalities want want to see you pull permits for changing toilets, and water heaters and air conditioners and very for any for installation of outlets for very, very minor work. And someone asked me the other day in Fort Lauderdale. Again, most people in a single family house, they don’t pull permits for kitchen renovations, which they should and things like that. And why is that the case because the cost of the permit, the time it would take the architect getting an architect for kitchen renovation to take down a non load bearing wall. You’ve just tripled your construction costs. So law I, I see a lot of issues with single families. In condominiums, I see the contractor, he, you know, he or she so proud, he applies for the permit gets the association approval gets the permit issued, and then never calls for final inspections. So leaves that open and expired. And we see that a lot when the word can pass inspection, or there’s or the contractor ends up doing more work for the owner outside the scope of the permit. And then they know you can’t close it out. So they just leave it open and the resident finds out right before they have to sell the place.
Unknown Speaker
Hi, thank you.
Unknown Speaker
Thanks, Becky. Hi, Ben, thanks for giving you time to come and speak to us today. Appreciate thanks for having me on the phone. Thanks. No, my question is say I was a homeowner and if I constructed it any type of construction without a permit, and this comes alive at some point in the future wanna sell it? What was you know, what’s the process then?
Benjamin Sens
Um, well, a lot of the times it’s so the process would be to get an as built or permit after the fact, a lot of the things that I see a problem with are liens, which are the last step of the city code violations, which are which liens are a result of when they don’t get compliance. Violations for expired and, and expired and open building permits. So a lot of times, a lot of the work is done. Okay. As long as there’s not much documentation at the city level, and you have an unpermitted kitchen. It’s just best that the seller disclose that to the buyer. It’s not a deal breaker and it might not be something that you want to permit and you as a property owner, need and you know, real estate sales professional need to understand that hey, this guy got windows In the back of his house without a permit, because he didn’t pull a permit for his back edition. So obviously we don’t want to call the city to do a window inspection in an enclosed room that was done without a permit anyway. So, you know, these are called non conforming uses. These are called things that can’t be brought into compliance, which, through a consultation, I can tell your property owner or your seller that or give you the right advice. Thank you. Thanks, Gary.
Unknown Speaker
Hey, Ben. Well, thank you for being here with us.
Benjamin Sens
All right. And how do I say your name? JAMIE? Jamie, Jamie. Jamie. Okay. I know. It’s spelled like Jenny. I know.
Unknown Speaker
Yes. No. Okay. Well,
Benjamin Sens
thank you, Jamie.
Unknown Speaker
What do you just said about? I’m going to ask you My question is how really expensive could it be?
Unknown Speaker
Doing a construction without permit like later on in the game.
Benjamin Sens
So permitting after the fact could get very costly depending on the deficiencies, a lot of times you know, I’m just looking to get things right on the surface. So when I do a change of contractor if it’s an open permit or a new permit, the city comes in and everything looks good and we get through that right. To give you an example, I’m dealing with a listing in century village in Boca right now. The agent called me because not because they had an open permit, not because they had a code violation or lien on the property because the condo association cited them for work without a permit. condo association says to the seller, we’re not going to let you we’re not going to prove any prospective tenants or any prospective buyers until you get a permit. They renovated small unit $50,000 unit was made for a flip kitchen. It was a one In one and a half, some kitchen bathrooms, everything. So again, something like that they took down walls, they opened up the kitchen, it was on the first floor. So soundproofing really doesn’t matter, the hot water heater, they relocated in the bathroom, they changed the electrical panel, they change the tiling in the shower. So again, all of these things, you know, you know, you’re looking at, you know, 5070 $500 to correct this deficiency and the seller and this circumstances in the condo. So they you know, and the association took a very strong stance, and I and I think the seller who was an investor and a lot of investors and flippers, when they hire people to do the work, they hire people who might be messy or unlicensed, so they leave the door open. They work after hours, they bother the neighbor. They don’t seek any approval. So this is where the essential Association takes a strong line and the city in the and this is unincorporated Palm Beach County. And the county has to one other follow up in Riviera beach, which is very interesting. A client purchased a property, nothing came up on the lien search. So no open permits no code violations. But they went to pull a roofing permit Three years later, because the roof was bad. And they had a flag in the system that that there was kitchen and bathroom renovations. So no permit, no open permits, no code violations. But there was a little flag on the property when they went to the building department. So they would not release the roofing permit to the roofer until they got the kitchen and bathrooms permitted after the fact. So it’s, again, it’s it’s really important. It could you know, these margins on flipping are very small sellers who are end users, they’re not in positions to pay this amount of money. And a lot of times, like I said earlier, after the inspection period they get negotiated with if the agent doesn’t do the due diligence, they have problems with open permits and code violations. And who do you think they come after they come after the agents, they come after the commission, they say all falls apart, essentially. And that’s, that’s what we’re trying to prevent from happening.
Unknown Speaker
So then you so homeowners and sellers should not rely on the contractors. I’m sure a lot of them rely on me hire the contractors to do the work. They apply for the permanent contract. And so the homeowner should really do some investigating themselves and check with their contractors to make sure that they pulled the permit.
Benjamin Sens
The homeowner should actually most building departments have an online portal that most of us use. Before you list a property you can go online and Not an open permit search, which leaves search company conducts and they cost a lot of money. And there’s a lot of turnaround time to kind of backtrack here. The reason why the lien search is pulled late, is because the title company has to front the cost for the lien search, and then they get reimbursed. So if that’s why they wait till after the inspection period, or when they get the contract, because if that’s not happening, and then it takes 1010 to 10, five to 10 business days, and about 200 some between 80 and $250 to get that open permit search, but we have a lot of you know, online stuff. So you know, those online databases, they don’t go as far back as the permit searches, but they’re at least a good start. So you can, you can go online, and to circle back what you were saying about the the resident or the property owner, they should not trust their contractor. They should not rely on their car. contractor they should go to the building department they can call the building department would inspections bypassed is my permit closed also before they pay the contractor and final, if it’s a pool or a large project, they should make sure the contractors, subcontractors and vendors have been paid. Because if the contractor dupes over them, they’ll put a lien on the property, and that’ll be the owners problem. We had a situation with parkwood pools where I was on channel 10. Kind of like a little help me Howard segment where a very well known pool company, they had 30 ongoing pools from Key Biscayne to Wellington and that some were holes in the ground, some you know, and again, as most of the single family he lays and these homeowners got stuck. And not only did the subcontractors and their suppliers, the HOA fees were going after the homeowners because there were code violations and aesthetic violations. holes in the ground. So again, it’s very important that you do follow up with your building department. And and and make sure that your contractor has done the right thing. Service America, a company that we all know very well they went out of business. They were notorious for charging people permit fees for hot water heaters and air conditions. They were only pulling every other one because the city would see their trucks all around them doing installs, and then they see the truck Park and they check but again, I’m dealing with a situation in Miramar right now, where where they didn’t even pick up the permit. So they just showed the resident a receipt for the permit, install the air condition. And now two years later, the resident has to sell their house and thank God the installation was done right. So the work was done right? It could pass inspection, but we need to do a change of contractor and pay those fees. So we come into all sorts of these situations. And like I said, it is always a hardship for the seller, because they’re almost, they’ve already paid for the work most of the time.
Unknown Speaker
Right.
Unknown Speaker
Thank you. Sure.
Benjamin Sens
Thank you Carmela.
Unknown Speaker
This is such a valuable information that nobody’s getting I’m telling you now watching the virtual five years, I found it again. I
Benjamin Sens
found when I was working in the building department, this was back in Oh 789 in Weston, I found a lot of realtors coming to the building department. I’m like what are realtors doing here. And they were trying to give the best level of service to their to their trying to get the best level of service to their clients, whether they were absentee and they lived in another area of the country, whether they were end users and they lived on the property. Again, these issues were coming up so close to closing and so close to a rate lock being lost or a deal falling apart. So you have to be able to understand and Like I said, these contractors, they’re licensed by the state, the city keeps letting them get more building permits. But if the permits left open, it’s no skin off their back. Even if they’re still in business, so, you know, I look out for the interests of property owners and agents, I work with a lot of Real Estate Attorneys. But But again, any situation we can resolve, meaning if we, if it’s a credit to the buyer, if it’s valuating the situation but I don’t want I don’t want agents or owners or title attorneys to come up with their own valuation. Oh, we could close this pool permit for 20 $500 seller credits buyer post closing they find out there’s more problems and then they’re upset, you know, at their agent or they’re very disappointed. So, again, I’m just I’m not trying to scare all you guys. But I’m just trying to tell you guys how how I can assist you and your viewers, and how I could be a resource for you and your clients in the South Florida. Real Estate community. Thank you
Unknown Speaker
so much. I think this is such insight to what we have to deal with. Because, you know, yeah, I’m a realtor, but look at everything that we have
Benjamin Sens
to kind of be. Absolutely,
Unknown Speaker
because it affects I mean, each of each of us have had this problem more times than we can can count. And they’re, you know, we just want the deal to close. There’s so many moving parts already. And this becomes an issue at the worst time possible. So we try to, you know, take care of it before and there’s so many different parts to everything we talked about today with permitting and building codes. And it was such valuable information. So we really appreciate your
Benjamin Sens
show. Show and again, I’ve seen agents do this. If you want to go online when you take a listing or call the building department and ask them if there’s open permits. That’s really for free, they’ll most likely say I’m a resident, they’ll give free information. If you want to have your title company or you want to contact reliable lien search, which I work with, you can pull a lien search on the property and have that updated prior to closing. Which is is which is which is which is phenomenal. And it is it is it is the best thing you could do. And let me tell you, sometimes the sellers do it. Sometimes the agents do it, but everyone ends up appreciating it. So it keeps things on on track.
Unknown Speaker
Wonderful. You’ll have to come back. Yes, yeah. Yeah. should come unfortunately, because it’s such an information pack. So So Benson from boss instruction, we really appreciate you coming on. Again. We’re the virtual five. We’re here every Thursday 5pm. So if you have questions, comment below if you want to contact us real estate. We’re here 24 seven and we look forward to seeing Be with you. And we will see you again next Thursday.
Benjamin Sens
Thank you virtual five for having me on. It was a pleasure.
