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Kendall Jenrette's Blog

By Kendall Jenrette | Contractor in Atlanta, GA

Renovation and Repair Loans and Retroactive Permits: Thanks Chuck!

When you are searching for evaluating a home to determine weather it’s the right home for you always do your due diligence. Throughout metro Atlanta homes are being offered for very reasonable prices, many of which have been built within the last 5-10 years. But it’s is important not to get lulled into a sense of security based on the belief that because the house is newer and is in excellent shape that it will not need work. When considering any home its important to cover your bases. In many cases a “quality” home inspection can be very valuable. In some cases even more information may be helpful.

When homebuyers are planning to use a construction or renovation loan and the subject property has finished living space(s) that appear to have been completed sometime after the original construction of the home ( ie finished basements, attics, and additions) it can be very important to know whether permits were issued “pulled” for the work that was performed.

Here’s an example of a real situation that my company, Southstar Construction, is currently helping a homebuyer and agent work through. Here is the scenario:

This sequence of events took place in a smaller city, around 30 minutes from downtown Atlanta (in Saturday morning traffic).  

An agent has helped the homebuyer find the perfect house. It’s a bank-owned, it priced very reasonably, the home was built in 2004, it is located in a stable neighborhood, the home is in good condition,  the bank made quite a few repairs to make the home more move in ready. My company is selected by the homeowner to perform additional renovations and repairs that the homebuyer will be financing into her mortgage.  

For this project, my company, Southstar Construction, was required contact the local building department and determine whether a permit was needed. It is determined that an HVAC permit will be required for one small portion of the job. During the course of our correspondence, the building official notices that the basement is finished. He searches the city’s records for a permit for the basement finish work. There is no permit on file.

Before the city will issue the HVAC permit, they required that a retroactive permit be pulled to inspect the work that was previously performed by the “mystery remodeler” or “Chuck-in-a-Truck” as I heard an instructor refer to these types as in a continued education class several weeks back.

The building official stated that any deficiencies that are found during the inspection will have to be remedied by the current contractor in order to pass inspection and close the permit. Otherwise the permit remains open, no certificate of occupancy is issued for the basement, no HVAC permit is issued for the current work, and therefore the contractor cannot begin the work, finish the work, or invoice to get paid, and the job stalls. THAT’S RIGHT, all of “Chuck’s” unpermitted work just became the problem of the new homeowner and the new contractor! And who’s going to pay for the remedial work should there by any?

Thanks alot Chuck!

Now imagine finding this out after closing.

I think many of you can see where this is going. Now many of you may be thinking, that checking these types of records is overkill, and in many cases it maybe. 

But if you or your clients are going to have:

1.      work done using 203K, or some other construction loan product, and

2.      the new project  will require a permit, and

3.      andhome has finished space that was completed after the home's initial construction, and

4.      the finished space in question will not be totally renovated/remodeled, but

5.    part of the work you will be permitting is located in the finished space in question,

t     6.    it may be a good idea to check building department for records of the work having been   


It may save you a lot of time and trouble on the back end. Of course the information I’ve shared is not a hard and fast rule. There are exceptions to every situation. You must ultimately make you decision the call based on your own knowledge and experience. However, be artful with the way you frame your questions should you call the building department, but that’s a topic for another time.

Kendall Jenrette

Managing Principal

Southstar Construction & Remodeling



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