New Rules on Florida Building Permits

Three construction workers add paneling to a home. Florida House Bill 447 makes changes to the Florida Building Codes Act that will affect property owners, contractors, and real estate professionals.

House Bill 447 was signed by Florida Governor Ron DeSantis the same day he approved the Remote Online Notarization bill. As most people working in real estate can attest, permitting issues are usually a huge headache to resolve. Hopefully, this bill will help to mitigate some of those problems arising from open and expired building permits.

Specifically, the new rules affect the Florida Building Codes Act, which dictates the procedures a governing municipality of real property must follow when issuing permits, reviewing building improvement plans, and performing inspections. The new rules affect several processes related to property owners, contractors, and local governments.

Here are some highlights of the building permits bill:

• Municipalities may send written notices no less than 30 days before a permit is to expire, and it must identify the permit that is set to expire and the date it will expire.
• A property owner may close out a permit regardless if they are listed on the application for the original permit by either hiring a contractor or assuming the role of owner-builder in accordance with certain rules.
• Requires property owners to sign a disclosure statement confirming they understand the stipulations and penalties for unlicensed work and that they may act as their own contractor with certain restrictions.
• Allows a property owner to close expired or open permits by retaining the original contractor or hire a new contractor to perform the necessary work to close out the permit.
• Clarifies that a new contractor is only liable for the work he or she performs when closing out a permit.
• A permit that is more than 6 years expired may be administratively closed out by the governing municipality if no safety hazards are present.
• Prohibits the municipality from penalizing or refusing to issue new permits for a new property owner when an open or expired permit is attached to the property.
• Limits the fees municipalities can charge for a permit history search based on the parcel number.

The three best things about this bill

From my perspective, the three best things about this bill are:

1. Closing out expired permits are easier because a property owner can now easily hire a new contractor to do the required work. It also means that old permits lingering on the books are easier to rectify.
2. Local governments are limited on how much they can charge for research, and they are also required to use excess code enforcement funds to rebate or reduce code enforcement fees.
3. Contractors don’t have to worry about being penalized for permits that were left open in their name or being held liable for the work of another contractor when helping an owner finish the project.

Nothing is more frustrating than bureaucratic red tape holding up a closing

For settlement and real estate agents trying to get permit problems settled for their seller or buyer, this bill is essentially a godsend. Obtaining permit information and correcting open and expired permits should be easier.

When doing property research across the state of Florida for PropLogix, I noticed how inconsistent the rules regarding permits were from one municipality to the next. In the City of St Petersburg, there was no issue getting an expired permit more than a decade old closed out with a simple email request. Other places had more stringent requirements even when there was no evidence that work had occurred and therefore, no potential safety hazards present. Despite that, many still required a fee for a final building inspection on top of the research fee to be paid.

Doing research on commercial property was further complicated because some municipalities would charge for the building as one search while others would charge a fee for every single unit even if they are tied to one parcel. This bill clarifies that the research fee must be charged based on the parcel. Ancillary administrative fees or surcharges that aren’t related to enforcing the Florida Building Code are now prohibited.

Overall, this bill should help to drive down the cost and time it takes to resolve permit issues.

Are you doing permit searches for every closing?

In our second annual State of the Industry report and webinar, we ask those working in the title industry if they checked for open and expired permits. 46.3% of respondents said always, but 22% said either rarely or never. The percentage of those rarely or never doing this search is a bit concerning to me.

I understand that while technically this search isn’t always considered a part of core title services, it still serves as a valuable part of assessing potential liens that might not be currently filed in the public record. Depending on the state, a contractor or subcontractor can take up to six months to file one for unpaid work or supplies. In order to avoid problems with mechanic’s liens and the bad publicity it could bring your business, title agents should leverage all available information on the property to issue the best policy possible on behalf of the homeowner.

If you’re already doing municipal lien searches (whether you outsource to a company like PropLogix, one of our competitors, or do them in-house), I recommend that every title company and law firm add this research to their current process.

If you’re a title or real estate agent working in Florida, I’d love to hear your thoughts on this bill. What has permit history research been like for you and are you expecting this bill to have a positive effect? If you haven’t had a chance to look at the bill, you can see it here.