Closing Open Permits in New York City: What Property Owners Need to Know
Introduction
If you are buying or selling property in New York City, one of the most common issues that can delay your transaction is an open permit. Open permits occur when work was filed with the Department of Buildings (DOB) but never properly signed off. Before closing, lenders and buyers will require all permits to be cleared. Failing to resolve these issues can stall your deal, add unexpected costs, and even expose you to violations or penalties.
This guide explains what open permits are, why they matter, and the steps property owners can take to close them efficiently.
What Is an Open Permit?
An open permit means the DOB has a record of construction or renovation work on a property, but the project was never finalized with the required inspections and approvals. Common examples include:
- Renovation permits where no final inspection was scheduled
- Electrical or plumbing permits that were never signed off
- Alteration permits filed years ago but left unresolved
These open items remain tied to the property until officially closed out, regardless of how long ago the work was done.
Why Open Permits Are a Problem
Leaving permits open can create legal and financial issues, including:
- Delays at Closing: Buyers and lenders will often refuse to proceed until permits are cleared.
- Fines and Violations: The DOB can issue penalties for incomplete or expired permits.
- Liability for Owners: Even if you didn’t perform the work, as the current owner you are responsible for resolving it.
- Impact on Insurance: Some insurers may deny coverage if the property has unresolved construction history.
How to Identify Open Permits
Before a real estate transaction, you (or your attorney) should run a DOB NOW / BIS property search to check for outstanding permits, violations, and applications. This is part of due diligence and can save time by spotting issues early.
Steps to Close an Open Permit
Closing an open permit can be challenging, especially if the original contractor is no longer available. Even when the work was completed, the contractor must file the proper paperwork, and the local building department must send an inspector to sign off, which can take a while. There is also the risk that inspectors may uncover new issues during their review, particularly if temporary fixes were made to pass earlier inspections.
The general process includes:
- Hire a Licensed Professional.
An architect, engineer, or expeditor may need to review the permit history and determine what remains to be done.
- Schedule Inspections
If the work was never inspected, the DOB may require final inspections to verify compliance.
- File the Proper Paperwork
Depending on the permit type, forms such as a Certificate of Completion or sign-off request must be submitted.
- Resolve Violations (If Any)
Open permits sometimes trigger related violations (e.g., failure to schedule inspections). These must be corrected and cleared.
- Confirm Closure
Always confirm in DOB NOW or BIS that the permit status shows as “signed off” or “closed.”
Common Challenges in Closing Open Permits
- Contractors No Longer Available: Old permits may have been filed by contractors who are no longer in business.
- Work Was Altered: If the work changed without updated filings, amendments or new applications may be required.
- Multiple Open Permits: Properties often have multiple outstanding items, requiring coordinated resolution.
Preventing Open Permits in the Future
To avoid these issues:
- Always confirm that your contractor schedules final inspections.
- Request proof that permits are signed off before final payment.
- Keep digital copies of all permits and closure documents.
Why You Need an Attorney’s Guidance
Navigating DOB procedures can be complicated, especially when deadlines, lenders, and buyers are involved. A knowledgeable NYC real estate attorney can:
- Ensure seller is responsible to address open permits, which are not considered a title defect
- Negotiate responsibility for closing permits between buyers and sellers
Conclusion
Closing open permits in NYC is a crucial step in any real estate transaction. Addressing them early can prevent costly delays and disputes. Whether you are buying, selling, or refinancing, consult with an experienced real estate attorney to ensure your property is cleared and ready for a smooth closing.