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“Open permits” refer to building permits that show up on municipal lien searches as not having been “closed.” These permits cover a range of items such as roofs, fences, and pools – and always refer to work on the property being sold that was either: (1) commenced but never finished; (2) finished but never finally inspected passed for compliance with municipal codes; or (3) never started in the first place.
Although technically not “liens,” these items should be dealt with by the closing agent. Because such permits are not “liens,” a title insurance policy may be issued insuring the priority of any mortgage financing and/or the owner’s equity in the home; however, because such permit issues may impact the value of the home, a lender may not close a loan with these matters outstanding. In addition, a prospective purchaser will want these items dealt with because of their potential impact on value. A closing agent will, in all events, want to alert the prospective buyer of these permit issues to avoid possible litigation claims for the loss in value of the home or for the cost of remedying these items post closing.
In general, “open permits” will require a contractor who is licensed for that purpose (e.g.) roofing contractor, to inspect the work, complete the work, have the work inspected by the appropriate municipality and have the permit closed. If the work has not commenced, a code enforcement officer will have to inspect the premises to confirm that nothing needs to be done and then close the permit.