The City of San Antonio is flipping the script on contractors, homeowners, and home flippers who don’t comply with permitting laws.
Beginning last year, the Development Services Department deployed a team of building inspectors to crack down on real estate investors, contractors, and homeowners who undertook renovations without first seeking a permit from the City, handing out more than 900 citations.
In just this month, an additional 200 citations have been written – most involving work done in violation of the City’s building code that could pose health and safety risks to a home’s occupants.
“And that’s very concerning to me, and that’s what we’re trying to fix,” said the City’s top building official, Michael Shannon, director of Development Services. “There’s a lot out there and a lot of different types [of violations], but they’re all related to safety and health because that’s what our codes are based on.”
Inspectors found everything from faulty gas lines and electrical wiring to major engineering and structural issues.
A building permit is required any time a property owner or contractor builds, remodels, or demolishes a structure. New fences, roofing, swimming pools, and additions all require permits, which cost between $80 and $400, depending on the type of job. After the permit is submitted, the City reviews and approves the plans, and the work is inspected when it’s complete.
In some instances, home buyers complained they couldn’t track down the contractor who rewired the electrical systems in their home for an air conditioning system that was malfunctioning. Conversely, home sellers didn’t have the proper paperwork to show to potential buyers that remodeling work was done properly, thus delaying a sale. Residential real estate investors, including so-called home flippers who buy houses to remodel for resale, were faced with costly fixes and delays when City inspectors found work being done without a permit.
Last February, City Council funded additional inspectors to address the growing number of complaints from area residents that contractors weren’t pulling permits. This group, called the Strike Force team, fanned out across the city on weekends looking for violations.
Within the team’s first four or five weekends of being mobilized, its members discovered 600 violations.
“We saw a lot of renovation of houses that are being flipped or even homeowners that were doing [work] or paying someone to do some significant renovation stuff, so we knew the problem was growing, but this kind of confirmed it,” Shannon said.
In addition to physically driving neighborhoods and looking for violations, the team also scours multiple listing service websites, such as Zillow, to find remodeled houses, then checks the address against the permitting database.
“These codes have been the same for a long time and they’re there to protect not only the contractors, but most importantly the residents in homes,” Shannon said, noting it is especially important when it comes to codes regulating electrical, gas, and structural systems. “Not only were we finding people weren’t pulling the permits … we were actually finding a lot of unsafe stuff.”
Owners and contractors who don’t pull permits can face citation fees starting at $300 for a first-time offense. Violators also are charged double the original cost of the permit.
The consequences don’t end there. When the violation involves a contractor, the City notifies the State of the investigation, putting the contractor’s license in jeopardy, and may also suspend registered contractors for a period of time. But some violations are so egregious, Shannon said, registrations are revoked entirely, and the contractor is permanently prohibited from doing business in San Antonio.
For home buyers and sellers, the penalties also can be costly and frustrating. In one case, the City cut off utilities to a home that was on the market in order to stop a potential sale and ensure remodeling work was done properly.
“We tend to think of that as the last resort, but our job is to protect those are going to be living in those homes, and that was hard and caused us some challenges, but we’ve been working through those issues with the help of [the San Antonio Board of Realtors] and individual realtors,” Shannon said.
The goal of Shannon’s department is to get people violators back on track by getting them to pay the fines and attend classes to learn about the permitting process, he said. “And then they’re back doing it the right way.”
He said some homeowners and contractors respond to citations by saying they didn’t know they needed to pull a permit for the job, and others admit skipping the process in order to save money or get the job done faster.
One local contractor, who preferred not to be named, has been doing remodels and home additions in San Antonio for 20 years. He pulls 30 to 40 permits a year and doesn’t consider the fees, nor the time it takes, to be unreasonable.
The growing reluctance to pull permits may be for many reasons, the contractor said. For starters, some contractors are working illegally because they aren’t registered with the City and thus can’t pull a permit. Others are just cutting corners on cost.
But another reason to sidestep permitting would be to avoid inviting investigators to look at work beyond the scope of the permit, the contractor said.
Most contractors know that when they apply for a permit on one aspect of a home, the electrical system, for example, the inspector also will look at the rest of the home, Shannon said. If the inspector finds the water heater wasn’t installed properly, or some other previous work was done incorrectly, that can delay the new project.
“And all of a sudden the people are looking at another thousand dollars to change that when we didn’t permit that or ask for that,” he said.
Wayne Ramirez, a former mortgage broker who works as a realtor with Re/Max Integrity, said one of his friends purchased an older home in the Hillcrest neighborhood on the North Side as a rental property.
When an electrical contractor began work on the home, a City inspector stopped by, saw the permit, but then found none of the previous work on the home had been permitted. The inspector “red-tagged” the house and blocked the electrician from doing any further work until permits were pulled.
Ramirez often represents homes for sale in the Jefferson neighborhood, where he also resides. When an older home hits the market, dozens of investors will bid even when the home requires significant repairs, he said, because the inventory of homes in that area is limited.
“Everybody wants to get into the game to try and make some money,” he said of house flippers. “A guy says, ‘Hey, I know how to do this type of work, I want to go buy this house and try to flip it because everybody else is doing it.’ So that’s where we’re running into a problem – there’s just not enough good tradespeople that do that stuff.”
Last year, the City established a database of registered and licensed contractors on its website, Contract Connect.
“We’re also working to highlight the contractors that are doing it well,” Shannon said. “I think that’s just as important, because … there’s a lot of renovation work to be done and it is exciting, and I think our community deserves that.”