Can I Sue My Contractor for Doing Unpermitted Work?
When you had your kitchen remodeled, you hoped it would add great value when you decided to sell your home. Now it’s the reason you can’t sell. Where you saw smooth granite countertops and a gleaming cooking island, the city sees code violations. How could this happen? Permits weren’t pulled, the work fell short of standards, and the contractor made out like a bandit. It’s infuriating. So, can you sue your contractor for doing unpermitted work?
In a case like the one just described, you probably can sue. However, the answer is often more nuanced.
Why Are Permits Such a Big Deal?
A building permit is a local government’s permission to either construct a new building or expand, renovate, or remodel an existing one. Permits ensure that construction projects follow all relevant regulations concerning building standards, land use, and environmental protection.
Any major work done on your home will likely require the contractor to get permits.
When are Permits Required?
If you ask a hundred different experts, you might get a hundred rambling answers. So follow this simple rule of thumb: Any time you or a contractor changes the footprint of a space in any way, get a permit.
Work that alters the footprint of your space or home includes the moving or changing of:
electrical wiring
plumbing
gas
load-bearing walls
the dimensions of the home or space
Changing the footprint of your home could have an impact on more than just your home, such as on the environment, other nearby homes, or the gas, power, and water lines other properties rely on. This is why no major work should commence without first obtaining a city or county permit.
Getting the right permits — plumbing permits for laying pipes, for example — helps ensure that the work passes inspections and is up to code.
Problems Resulting from Unpermitted Work
In Colorado, the homeowner is ultimately responsible for their home, and any construction work done on their property. This means that if you hire a contractor who does the work but never pulls permits, you could be held accountable.
You might be able to pull the permits even after the work is finished provided:
You pay twice the amount the permits would have cost, and
The unpermitted renovation passes a code inspection.
The Work Fails Inspection
If the work fails to pass local code inspection, you still have options, but they’re not good. You could:
stay in the home indefinitely.
tear out the renovation and redo it to bring it up to code.
sell the home at a considerable loss after disclosing the code violations.
Note: If the code violations are severe enough, local authorities could condemn the property. In that case, you would not even have the option of remaining in the home.
Local Officials Halt the Work
Someone from the city ordinance office might drive by while construction is in progress, ask for permits, and shut the whole project down until permits are pulled. If the contractor was responsible for pulling permits, this is a clear breach of contract, and you may be able to sue if no other resolution can be arranged.
Who Can Issue a Building Permit in Colorado?
Building permits are issued at the local level, either by the city or the county where the work is to take place. The city usually has jurisdiction, except in unincorporated rural areas and much smaller towns where the county issues permits.
For example: If you live in Denver, Boulder, or Castle Rock, the city will issue the appropriate permits for the job. If you live on unincorporated rural land somewhere in Douglas County, then you’d go to your county’s building inspection office.
Note: The requirements for obtaining a permit vary from jurisdiction to jurisdiction, which can make getting the correct permit a little tricky. However, most contractors are familiar with the requirements in the areas they work.
Who is Responsible for Pulling Permits?
Generally, the party doing the work assumes responsibility for obtaining the permits, but they are not necessarily required to do so. This is usually the head contractor or an agent or subcontractor working under them.
The homeowner certainly can pull permits for their own property. However, most leave that to the professionals. In fact, most contractors add the cost of pulling permits to the overall bill for the project.
Unfortunately, not all contractors pull permits.
Make Sure the Contract Specifies Who Pulls Permits
The best thing about a written contract is that it makes clear the obligations of all parties.
Any matter that should be clarified can be mutually understood and written into the contract and referred to when necessary. Specifying who pulls permits is one of the matters that should be clarified.
When You Cannot Sue a Contractor for Unpermitted Work
You cannot sue a construction professional only because they failed to pull a permit, unless the contract required them to. Let’s go over that again: If you …
hired the contractor, and
they fulfilled the contract, and
you had no issue with the quality of the work,
… you cannot sue over their failure to pull permits.
However, you can file a complaint with the city, county, or any regulatory body like the Better Business Bureau. You won’t win damages, but you can perhaps get the contractor sanctioned or fined for not pulling the permits.
You also cannot sue the contractor if the contract stated you were the one responsible for pulling permits.
When You Can Sue a Contractor for Unpermitted Work
The first step to bringing a successful legal action against any incompetent or unscrupulous contractor is hiring the right lawyer for the job. When it comes to work that wasn’t permitted, you generally can sue a contractor for:
breach of contract,
civil theft,
fraud, or
poor workmanship.
You may find out during the lawsuit that the contractor wasn’t licensed and never did pull permits, even though they were contractually required to do it. This could show negligence and strengthen your case. However, due to the state’s Economic Loss Rule, you’re only likely to recover actual damages — the cost of repairing or completing the contractor’s poor work.
The Economic Loss Rule prohibits claimants in construction disputes from being compensated twice for the same economic loss.
Damages You Can Recover from a Successful Lawsuit
If the contractor was responsible for pulling permits, and a code violation arose from their failure to do so, you are entitled to recover damages equal to the cost of repairing the problem. In other words, actual damages.
For example: Let’s say a contractor completes a $20,000 renovation on your kitchen. He never pulled any permits, and a subsequent inspection shows the work is not up to code. Your damages would be the cost of:
tearing out the unpermitted work ($6000)
re-renovating the kitchen up to code ($23,000)
total damages: $29,000 (minus attorney’s fees and legal costs, unless they are specifically provided by the contract)
What if the Contract Doesn’t Specify Who Gets the Permits?
If the contract is silent on who pulls permits, it could be more of a gray area. However, you could make a case asking why the contractor did the work without a permit since an experienced professional should know better.
Talk to an Attorney About Your Unpermitted Work
Have you been stuck with unpermitted construction work on your property? From poor workmanship and unreasonable delays to unlicensed work and breach of contract, our real estate litigation attorneys can help. Call (720) 797-1568 for your case assessment.
