PIGS GET FAT

By Eric Domeier, AIA, ICC Commercial Inspector

For the California apartment owner, permitting can be a dreaded phase of renovation projects. Submitting to the permit process can sometimes lead to unintended upgrades, and incur unplanned costs. But the alternative also has risks, both near and far.

Apartments are a long-term investment. They often reach their most lucrative phase of life around fifteen-years after purchase. The loan is paid, the value of the property far exceeds the purchased price, and rents are phenomenally higher than they were at the outset. But this is also the time in a building’s life where major systems may require replacement or major repair. These can be deferred, but the consequence is a slow ebb of rental rates and building value.

Certain improvements are exempt from permitting. These include modifications to interior finishes such as paint, floor tile, cabinets, and carpet. Certain sidewalks, driveways, and awning repairs are also exempt. It’s important to note, exemption from permitting does not mean exemption from compliance with the current building code. Even exempted items are required to meet the code. For the above examples these can include volatile organic compound (VOC) standards, trip-hazards, ADA accessibility, non-slip floor tile, and flamespread standards. To ensure compliance, it is advantageous to have a knowledgeable designer on hand, and a competent licensed contractor. Another way to manage risk is by purchasing approved products from CA based building supply houses. Cheaper materials from out-of-state or out-of-country sources may not be worth the savings.

But where an item is part of an engineered system, is a impacts life-safety, modifies the envelope… these will require permitting. The general rule of thumb is: If you touch it, you upgrade it. Any component of the building that is modified will need to be brought into compliance with today’s code.

There are also risk-prone issues that are outside of the jurisdiction of the code official. An example of this is project built in the 1970’s, when window sill could be as low as 24-inches. I was brought into a project where a child slipped out of their bed, through an open window, and fell one-story to the parking lot below. The child was killed, the owner paid a significant amount of money on the claim, and the family’s life was altered forever. The code authority did not require this window to be brought to code, because the window had never been modified. The window was grandfathered component of the egress system, into compliance. An unusual case, but not uncommon.

Similarly, accessibility issues for the disabled pose certain risks to apartment owners. While the City may provide an economic hardship waiver to bringing a project into compliance, it does not prevent a disabled person from bringing a successful lawsuit against the property owner. A waiver by the local code authority does not equate to a waiver from Federal law that enforces the ADA.

Clearly, owning and managing apartments has some risk. But submitting to the permit process during improvements is an effective way to manage these risks. The local code authority is a partner to the building trades. And can be your friend to ensuring quality, safe workmanship. For the designer, the additional reviewer of a project scope and detail is much appreciated. Sometimes an item is overlooked, and these are better addressed prior to a contract being awarded. Many millions of dollars have been spent by Owner’s, remediating the unintended consequences of their unpermitted repairs. As a risk-mitigation consultant, I’ve seen this occur where interior renovations breached fire-rated assemblies; where waterproofing systems failed; and in the above example of an older project with significantly hazardous window.

Forgoing the permit process is like deferring maintenance, but also paying for the maintenance. Yes, the project will have a lesser immediate cost. But whatever savings are found today, these will be paid out in the future. Whether through decreased rents as the building fades into obscurity, or having to correct work that has failed, or provide credits to a buyer. Unpermitted repairs have long-term costs well beyond any savings.

As they say in the South: Pigs get fat, hogs get slaughtered. This idiom has no better context than in managing and owning apartments. Yes, the longtime owner is finally reaping the reward of their investment and discipline. Enjoy that, it’s deserved. But at the same time, invest back into the property. Through both permitting, and assessment of egregious life-safety risks. Through this process, the owner will keep the rents on an upward trajectory, and secure the safety and security of the tenants. Maintaining the property with proper and compliant renovations will ensure its value for another thirty years.