Building Permits – Definition

Cite this article as:"Building Permits – Definition," in The Business Professor, updated September 14, 2019, last accessed May 31, 2020, https://thebusinessprofessor.com/lesson/building-permits-definition/.

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Building Permits Definition

Building permits refer to a legal authorization for construction of a building which the government or regulatory bodies grants. It generally means that no one should start any construction before getting approval from necessary construction bodies.

Investors and economists take a keen interest in monthly reports on building permits. Construction brings about economic activities like employment. So, when investors look at the report, they will have a hint of the country’s financial state in the future.

A Little More on What is a Building Permit

The different types of building permits are indicators of either growth or stagnation in the economy. An increase in business building permits, for example, shows that the economy is going to grow. Also, an increase in warehouse building permits indicates the growth of businesses in the future years.

The prices for obtaining business permits are not constant. Different cities have different pricing for obtaining a permit. The type of project you employ will also determine the price of your building permit. For instance, the cost of reconstructing an entire wall will not be the same as the cost of building the entire house.

The process of obtaining a building permit

Different states and countries have varying regulatory codes for constructions. However, all are set to ensure the buildings are safe for use by the public. The process of getting the permit involves the following steps:

Step one: Completing a manual or online application for the permit.

Step two: Preparing architectural and landscape drawings for the project. If the project is too big, you can go ahead and hire professional help to assist with the drawings. It will ensure that the building meets the construction codes.

Step three: Setting up an appointment for the plan approval. The approval period is not specified, as it may be days, weeks or months, depending on the type of project. If the project plan requires making corrections and revisions, then it may take a longer time to be approved.

Step four: Obtaining the permit after the government approves the plan.

Step five: Scheduling inspections with regulatory bodies to ensure your construction is in line with the project plan. The inspection process is not a one-time thing. It is done throughout the construction process.

Step six: Completing the entire construction and obtaining an overall approval from the government.

The projects that need a building permit

Generally, not all constructions require a building permit. Each city has its permit requirements. Your project will need a permit depending on the building regulations of your country.

Take an example of Florida, where the construction permits focus on safety due to the heat, and humidity in the region. In regions that often get consumed by forest fires, the construction code may require the use of fireproof building materials. Areas that experience earthquakes require the use of materials that can withstand tectonic activities.

Most projects requiring building permits are those that alter the overall structure of a building. You are likely in need of a permit in the following cases:

  • Removal or addition of walls
  • Changing of the piping system of the building
  • Re-roofing of the building
  • Converting the purpose of a room. For example, changing your garage into a living room, or
  • When you want to demolish a part of the building

Some of the projects that don’t need a building permit include:

  •  Addition of cabinets in the house
  •  Re-painting the building
  •  Building a pavement on your driveway
  •  Flooring the house
  •  Building a fence around your house

The person who arranges the acquisition of the permit

The construction of commercial or business buildings is a huge project that may require the hiring of a contractor. If that is the case, the contractor is required to obtain the building permit. In case of any problems in the future, the permit applicant will be the responsible party. Since the contractors are familiar with the inspectors, this may work in your favor.

If the contractor is expensive and charges on an hourly basis, it will be safer for you to fill in the paperwork and submit it. The complexity of your construction should help you determine the best way to obtain a building permit.

The validity period of a building permit

All the building regulatory bodies have a time frame for the commencement of the construction after issuance of the permit. Nevertheless, it is common that the permit expires if the construction work does not start within 6 months.

If the building is not complete one year after the issuance date, the permit will also expire. Expired permits can undergo the renewal process. However, the owners should acquire the permit close to the construction’s starting time.

Consequences of not obtaining a permit

To truly know whether your project requires a building permit, it is safer to consult your government permit office. They will advise you accordingly. The process is usually overwhelming, but it is important to get it done.

Doing this will help prevent future demolitions, or shutdowns in case your building does not meet the standards. In other cases, the government will charge you triple the number of permit fees if you fail to comply with the first time.

Conclusion

People do not often obtain building permits, and then go-ahead to construct their houses. The houses turn out alright without any arising problems. However, it is good to always obtain a permit before beginning any construction.

It will help you build quality houses that meet the government’s standards, meet the health and safety codes and help value your property accordingly. The buildings that do not meet the code of the city can be dangerous to both the owner and the occupants in case anything goes wrong.

 Reference for “Building Permits”

https://www.investopedia.com/terms/b/building-permits.asp

https://home.howstuffworks.com › … › Construction Planning and Projects

www.businessdictionary.com/definition/building-permit.html

Academics research on “Building Permits”

Using building permits to monitor disaster recovery: A spatio-temporal case study of coastal Mississippi following Hurricane Katrina, Stevenson, J. R., Emrich, C. T., Mitchell, J. T., & Cutter, S. L. (2010). Using building permits to monitor disaster recovery: A spatio-temporal case study of coastal Mississippi following Hurricane Katrina. Cartography and Geographic Information Science37(1), 57-68. The pace of disaster recovery varies considerably from one place to another. Even when places suffer impacts from the same event, recovery studies often lack the spatial and temporal resolution to fully understand such local variability in the recovery process and patterns. This paper discusses the novel use of building permits and a spatial scan statistic to identify the spatial and temporal dimensions of recovery in coastal Mississippi following Hurricane Katrina. Our work identifies significant space-time clusters of recovery activity and indicates that the amount of damage experienced and the amount of pre-event housing strongly influence the timing and location of building permit clusters. This analytical method and the use of publicly available data are valuable for a better understanding of long-term recovery processes.

Does housing drive state-level job growth? Building permits and consumer expectations forecast a state’s economic activity, Strauss, J. (2013). Does housing drive state-level job growth? Building permits and consumer expectations forecast a state’s economic activity. Journal of Urban Economics73(1), 77-93. National and state-level building permits significantly lead economic activity in nearly all US states over the past three decades, and produce substantially more accurate out-of-sample forecasts of state-level job and income growth than other traditional indicators including the leading indicator index, housing prices and wealth. We demonstrate that building permits have substantially declined before every recession since 1970, and that differences in permits across states before the last seven recessions explain the relative severity of a state’s job and income losses during these recessions. Hence, we can use permits to predict which states will suffer the greatest job losses in a recession. We show further that housing reflects expectations of future economic activity as permits are closely related to movements in consumer expectations, and both lead the business cycle by four quarters. Differences across regions in consumer expectations and permits are also highly correlated, and both can forecast interstate differentials in job and income losses across regions, particularly during recessions.

Causes of delay in building construction projects in Egypt, Abd El-Razek, M. E., Bassioni, H. A., & Mobarak, A. M. (2008). Causes of delay in building construction projects in Egypt. Journal of construction engineering and management134(11), 831-841. Delay in construction projects is considered one of the most common problems causing a multitude of negative effects on the project and its participating parties. This paper aims to identify the main causes of delay in construction projects in Egypt from the point of view of contractors, consultants, and owners. A literature review was conducted to compile a list of delay causes that was purged based on appropriateness to Egypt in seven semistructured interviews. The resulting list of delay causes was subjected to a questionnaire survey for quantitative confirmation and identification of the most important causes of delay. The overall results indicated that the most important causes are: financing by contractor during construction, delays in contractor’s payment by owner, design changes by owner or his agent during construction, partial payments during construction, and nonutilization of professional construction/contractual management. The contractor and owner were found to have opposing views, mostly blaming one another for delays, while the consultant was seen as having a more intermediate view. Results’ analyses suggest that in order to significantly reduce delay a joint effort based on teamwork is required. Furthermore, causes of project delay were discussed based on the type and size of the project.

Residential building permits in urban counties: 1990–1997, McDonald, J. F., & McMillen, D. P. (2000). Residential building permits in urban counties: 1990–1997. Journal of Housing Economics9(3), 175-186. This paper presents simple empirical models of residential building permits for urban counties in the United States for the period 1990–1997. Building permits, as a percentage of the housing stock, are greater the larger are population growth, the proportion of units that are old (built before 1940), and the proportion of units that are new. A higher initial vacancy rate reduces building permits.

Restriction of Building Permits As a Means for Controlling the Rate of Community Development, Allen III, H. W. (1969). Restriction of Building Permits As a Means for Controlling the Rate of Community Development. Urb. L. Ann.2, 184.

Are the challenges in the processing of building permits a precursor for development of illegal structures in Ghana, Agyeman, S., Abeka, H., & Assiamah, S. (2016). Are the challenges in the processing of building permits a precursor for development of illegal structures in Ghana. US-China L. Rev.13, 337. Procuring building permit in Ghana possess a great challenge despite government effort in addressing this problem through the introduction of new land regulations, integration of the land agencies and emergence of the one-stop shop. The delays now serve as a precursor for issuance of false permits by so called middlemen and the development of unauthorized structures by some unscrupulous developers. This paper takes a retrospective look at inherent challenges in the acquisition of building permits in Ghana and how that contribute significantly to mushrooming of illegal structures in most of the major towns in the country. The intrinsic challenges which this paper identified through descriptive research using structured interviews include: lack of integrated central database management system for permit agencies and analogous institutions involved in the permit processing system, too many processing steps, increased cost of construction and loss of value due to bureaucratic delays, lack of coordination between the land agencies and the local authorities, inappropriate feedback systems among others. Redesigning the current permit system by integrating all the agencies involved in the building permit acquisition process to a central database management system for sustainable development is a highly favored option.

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