Until recently it was not unusual to see residential listings with older building permits that were showing as open, easily checked in the Hawaii County public records. That could happen for a number of reasons.
Usually with older permits the paperwork had not been digitized and a little digging would show the construction as completed and inspected. Other times, the owner or contractor had completed the work but never called for a final inspection. Sometimes the work had just never been finished. And occasionally, work had never begun.
This year, as part of the implementation of the online permitting system (the EPIC system discussed in my earlier post), the County is cancelling all expired permits. The cancellation, which was slated to happen March 7, 2022, has just been extended to allow owners to attempt to complete work or get final inspections.
When Do Hawaii County Building Permits Expire?
Section 5.5.4 of the Hawaii County code sets forth the following expiration periods for building permits:
- Permits issued to a contractor expire three years after issuance.
- Permits issued to an owner/builder expire five years after issuance.
- Permits expire after 180 days if the work never commences.
- Permits expire if the work is begun, but suspended or abandoned for more than 180 days.
The reason for this is simple. Building code changes over time and the County is responsible for new construction meeting all current standards. It makes sense to cancel permits for which construction has never passed final inspection, rather than inadvertently putting them in the position of being asked to inspect and pass construction that was done to decades-old standards. This change is helpful to protect the consumer in a real estate transaction as well.
What you need to know about buying or selling a house with open permits
The Sellers Real Property Disclosure Statement legally required to be provided to a buyer of residential real estate in Hawaiʻi includes a section addressing the status of construction on the property. Now, except for the oldest of properties, this should be easy to verify in the County records via the EPIC system.
Obviously if it is possible for a prospective seller to complete construction and call for final inspections on an open permit prior to listing, or at least prior to close of escrow, it makes for a cleaner transaction and adds value to the property. Open permits and improvements built without permits can create difficulty in obtaining financing. An all-cash buyer can usually purchase a property showing open permits without impediment, but during their due diligence period they should be sure there is a clear path to completing the construction and inspection process before permit expiration.
Permits issued on or before March 27, 2012 have until June 1, 2022. Permit issued on or before March 7, 2017 have until September 7, 2022. If you see newer permits, recall that if was filed by a contractor, it is valid for three years. Owner-builders have restrictions on selling so that is a topic for another blog post.
If the permit expires with partially completed construction, the owner would need to file a new permit application, and meet all codes then in effect, even if different from what the code required at the time the construction was begun.
If you have questions about the permit moratorium, best to call the County directly.
You can reach the Department of Public Works Information and Education Specialist, Sherise Kana’e-Kāne at firstname.lastname@example.org or 808-961-8499.