One in five claims against real estate professionals is the result of a permit issue. One. In. Five. While not all of these claims can be prevented, a massive portion can be avoided by simply running a CRES Building Permit History Report. So what is stopping the client–or you–from doing so?
A Building Permit History Report informs you about all work that has legally occurred to the buildings and the property in question. Some believe that running a Building Permit History Report is an additional expense that they can trim from their overhead. What they aren’t calculating is that added risk is adding cost. Not knowing what permitted or non-permitted work has occurred on the property can greatly increase your potential liability and set you up for a preventable claim.
What’s the best and most cost effective way to reduce liability for yourself and your clients? Check out CRES Building Permit History Reports, part of CRES real estate E&O, to get started now.
Reduce your liability—in writing
When you run a Building Permit History Report and show it to your buyer or seller, you are protecting not just your client, but also yourself. They are now aware of all of the legal (or illegal) work that affects the home. The decision to buy or sell rests with them with full knowledge of what they are getting into.
Potential Blind Spots
Every county has different permitting laws, meaning that while one county may require a permit for a shed, another may not. This can make it tricky for real estate professionals to know what is and isn’t legal each and every time they conduct a transaction for a client. A Building Permit History Report can be checked against the permit exemptions list, which is typically available online for each county.
For some, it’s not the lack of a permit, but the existence of one that complicates things. When a permit has been applied for, but the job was never completed, the permit may expire. When the new owners apply for the same permit, they are shocked to find that they have been denied and will now have to pay to reopen the original expired permit, adding considerable additional costs. In this circumstance, the new owners could file a claim against the seller for not disclosing the existence and status of the expired permit.
Use your Building Permit History Report at the negotiating table
If you run a Building Permit History Report for a buyer and come up with no permits on file, this can be a red flag. However, it’s not all bad news. If you can confirm work has occurred on the property without a permit, you can use this revelation as a bargaining chip at the negotiating table. For example, if the home inspector finds non-permitted work that will require repair, replacement and the purchase of a permit, you can ask for a reduction in price. Conversely, when representing a seller, a Building Permit History Report can add value to the sale by confirming the presence of permits for all improvements made to the home.
A Building Permit History Report erases doubt of what is and isn’t legal, assists in the negotiating process, and provides additional protection from claims that may result after the transaction has occurred. Without this report, claims can happen. When you partner with CRES as your real estate E&O provider, you get 25 Building Permit History Reports (a $99.95 value) to use within a year to try out for free. Get started today!
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
Avoid these Top 10 mistakes real estate agents make that leave them vulnerable to a lawsuit...
https://t.co/KN7UUvP9hSHow real estate agents can still build strong client relationships during the pandemic: working closely together wh… https://t.co/YIJU1uvQvI