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Permit History Reports: A Tool to Prevent Real Estate Lawsuits?

You may have discovered that Permit History Reports can be difficult for real estate agents to access.   Typically, you have to  check with city and county offices depending on the type of work done.  This can be so time-consuming for a busy agent that it may seem impractical to generate your own Permit History Reports.

But “flying blind” leaves you vulnerable to lawsuit risks.  Of course, a new home sale doesn’t need a permit history report.  But you should provide one to buyers on existing home sales to reduce the possibility of — and your liability in — a permit-related real estate lawsuit.

One in five real estate lawsuits result from an issue with permits

And most of these are preventable. Take the cautionary tale of one agent who learned the hard way:

Last year, I sold a home with additions. Within months of the sale, a short circuit caused a fire in the home. The property wasn’t destroyed and their insurance would be able to cover the damages. When the buyers tried to get permits from the city for repair work, they found that permits were not filed for previous work on the home. Their home was deemed uninhabitable. Now they must pay for back permits and construction to bring the home up to code. Plus, they’re responsible for housing expenses and repairs resulting from fire and smoke damage. Until the work is complete and the home passes inspection, they have to live elsewhere. I am now waiting to see if they will be suing me for damages.

Had the agent in this story given the buyer a CRES Building Permit History Report, the lack of permits would have been disclosed. The buyer would have been responsible for doing their own additional due diligence before the sale closed.

We believe Permit History Reports help you avoid claims risk and help better serve your clients. That’s why every CRES real estate E&O policy includes at least 25 free reports each year (a $99.95 value) — and additional reports are available.

With CRES Permit History Reports,  we do all the work for you and provide a single comprehensive report for you  to access and give to buyers.

Do your due diligence to avoid a real estate lawsuit

Permit History Reports don’t show unpermitted work. Instead, they show the permits the property has. It is up to buyers to do their due diligence to compare listed improvements with what is in the Permit History Report. It is on the buyer, not the agent, to make these judgments. The agent never interprets the report to the buying or selling side. Rather, it is to educate all parties and provide full disclosure before close of sale.

Providing buyers with CRES Building Permit History Reports reduces your risk of a real estate lawsuit. Start using them today.

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