The Hidden Hazards of Open, Expired, and Inactive Permits: What Sellers and Buyers Need to Know

When buying or selling a home in Brevard County or anywhere along the Space Coast, the status of open, expired, or inactive permits can quickly turn into unexpected roadblocks. These aren’t just minor paperwork issues—they can have serious consequences that affect the current sale and future ownership of the property. Whether you initiated the work or inherited the problem from a previous owner, it’s crucial to understand how these permits impact both sides of the real estate transaction.

What Are Open, Expired, and Inactive Permits?

Permits are required for various home improvement projects, from electrical and plumbing work to major renovations. An open permit means the work was started but never officially completed or inspected. If a permit has been left open for too long, it may become expired or inactive, meaning it’s no longer valid but still unresolved. Unfortunately, as the current homeowner, these permits are now your responsibility to address.

Impact on Sellers

1. Delays in Closing: Open, expired, or inactive permits can stall your closing process. Buyers may insist that you clear these permits before they proceed, extending the time your home sits on the real estate market.
2. Financial Headaches: Resolving these permits can be costly, especially if the work was done years ago and no longer meets current building codes. You might need to hire a contractor, schedule inspections, or even redo parts of the work, all of which can add up quickly.
3. Legal and Liability Risks: If the permits were for unpermitted work or involve code violations, you could face fines or legal issues. Even worse, these problems can come back to haunt you after the sale if they’re not properly addressed.
4. Impact on Home Value: Unresolved permits can decrease your property’s market value. Buyers may see them as red flags, leading to lower offers or even scaring away potential buyers altogether.

**Not a Title Issue** It’s important to note that these permits are not covered by title insurance. This means it’s up to you to ensure they’re resolved before the sale, as title insurance won’t protect you from these types of issues in Brevard County or anywhere in Florida.

Impact on Buyers

1. Financial Liability: As a homebuyer, inheriting open, expired, or inactive permits can lead to unexpected expenses. You might be required to bring the work up to current code standards, which can be costly. In some cases, you may need to hire professionals to complete or redo the work, adding to your overall homebuying costs.
2. Insurance Issues: Unresolved permits can affect your homeowner’s insurance policy. Insurance companies might refuse coverage for work that hasn’t been officially approved or inspected. This lack of coverage can leave you vulnerable to potential damages and liability.
3. Resale Complications: If you decide to sell the home in the future, open permits can become a stumbling block. Prospective buyers might be wary of purchasing a property with unresolved issues, potentially lowering your property’s market value and making it harder to sell.
4. Legal Consequences: Local municipalities, including those in Brevard County, can impose fines and penalties for unpermitted or incomplete work. As the new homeowner, you could be held responsible for resolving these legal issues, adding stress and financial burden.

What Sellers Can Do

1. Identify All Permits: Start by checking with your local building department in Brevard County to see if there are any open, expired, or inactive permits associated with your property. This is crucial, especially if you weren’t the one who initiated the work.
2. Take Action: If permits are found, work to close them out as soon as possible. This may involve completing unfinished work, obtaining final inspections, or even applying for new permits if the old ones have expired.
3. Hire a Pro: Consider bringing in a licensed contractor or permit expeditor who can navigate the complexities of clearing old permits, especially if they’re years old and the work no longer meets current standards.
4. Be Transparent: Always disclose any permit issues to potential buyers upfront. This transparency can prevent future disputes and help maintain trust throughout the selling process.
5. Negotiate Wisely: If you’re unable to resolve the permits before the sale, you can negotiate with the buyer to take on the responsibility, often in exchange for a price reduction or other concessions.

What Buyers Can Do

1. Conduct a Permit Search: Before finalizing a purchase, conduct a thorough search of the property’s permit history. Many municipalities in Brevard County provide online databases where you can check for open, expired, or inactive permits. Supreme Title orders this search on every file to ensure a smooth real estate transaction on the Space Coast.
2. Include Contingencies: In your purchase agreement, include contingencies that require the seller to resolve any open permits before closing. This ensures you don’t inherit unresolved issues.
3. Negotiate Repairs: If open permits are found, negotiate with the seller to have the work completed or to reduce the sale price to cover the costs you’ll incur in closing the permits.
4. Consult Professionals: Work with a Realtor, attorney, or home inspector who can help identify potential permit issues and advise you on the best course of action.

The Bottom Line

Open, expired, and inactive permits are more than just a paperwork nuisance—they’re potential deal-breakers in both buying and selling a home, including the competitive Space Coast real estate market. By addressing these issues early, sellers can avoid delays and financial risks, while buyers can protect their investment and avoid future headaches. Remember, permits are *not* covered under your title insurance. Other title companies may choose not to perform lien searches, instead placing an exception on Schedule B of the Owner’s Policy. It’s important to understand that a lien search is not just a courtesy. As outlined in Section B-I of the Title Commitment, it requires proof of payment for service charges up to the closing date. This ensures there are no outstanding liens that could affect the property after the transaction is complete.

Requirement: Proof of payment of service charges for water, sewer, waste, and gas, if any, through the date of closing.

Exception: Any lien provided for by Florida Statutes in favor of any city, town, village, or port authority for unpaid service charges for service by any water, sewer, waste, or gas system supplying the insured land or service facilities.

At Supreme Title, we’re here to help you navigate these challenges and make your real estate experience in Brevard and Indian River Counties as seamless and secure as possible. Please call us if you have any questions.