Florida law allows a residential property owner the ability to pull a permit and serve as an Owner-Contractor so long as the residence is for occupancy of such owner and NOT offered for sale or lease (Note: the owner is also required to sign a disclosure statement confirming the same at the time the permit is obtained). On the surface, this is excellent news for an owner that has the skill set to make improvements, wants to save a few extra dollars, and/or wants to maintain social distancing. However, when you dig a bit deeper, an owner may have just restricted their ability to sell their home for one (1) year after the completion of the improvements. What?!
As noted above, an owner can serve as an Owner-Contractor, but cannot immediately offer the residence for sale or lease. Proof of sale or lease by Owner-Contractor within one (1) year after the completion of the improvements is evidence that the construction was undertaken for purposes of sale or lease. So what does that mean? If an owner pulls a permit, serves as the Owner-Contractor, completes the work, then wants to sell the residence immediately, the Owner will violate the statute and local ordinances governing this issue. (For practical purposes you can refer to Florida Statute 489.103(7) and Sarasota County Code of Ordinances, Article V, Section 22-122(3-6)). Violations could include the issuing of a citation, fines, civil penalties, and liens. With that being said, the local Building Department may consider extenuating circumstances and the parcel/owner permitting history when evaluating whether to enforce this requirement; however this is done on a case-by-case basis. How does this impact you, the Realtor?
If you represent a Seller you may want to ask the following questions of your client before you take on a listing that could impact your marketing dollars and closing timeline:
1. Have you pulled any permits on the property in your own name as Owner-Contractor?
2. If so, when was the permit pulled and when was the work completed? (Copies can usually be found online or obtained at the local building department).
If you represent a Buyer, you may want to ask the following questions of the Listing Agent before your client enters into a contract that could affect their closing timeline or a successful closing altogether:
1. Is the Seller aware of any open permits on the property?
2. Has the Seller pulled any Owner-Contractor permits? If so, when was the permit pulled and when was the work performed completed? (Note: it is a good idea to order a municipal lien search that reflects recent permit history.)
By asking the questions above, you may avoid a messy listing, wasting marketing dollars, provide some (non-legal) guidance to your client in hopes retaining future business, and protect your client from the aggravation of a delayed closing. As always, should you have any questions concerning Owner-Contractor permits we encourage you to reach out to your trusted local real estate attorney.
Sincerely,
Jamie A. Ebling, Esq., jebling@berlinpatten.com
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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