1. The open permit

A permit is opened when work begins and closed when the final inspection is passed and a certificate of completion or amended Certificate of Occupancy is issued. The gap between those two events can span years or decades, and that gap is an open permit — visible on the public record to anyone who looks.

The work is usually fine. The deck is beautiful, the boiler runs, the electrical is sound. What was never finished is the paperwork. But to the municipality the job is unfinished business, and open permits routinely outlive the contractor who filed them and the owner who hired him. When you sell, closing it out becomes your problem.

Why it matters more than sellers expect: a buyer’s lender may refuse to clear the loan until the permit is resolved, which turns a records issue into a financing failure. FHA and VA lenders in particular will not close over one. An open permit also implies the work may not meet current code, raising the prospect of mandatory upgrades — and it signals to the buyer that the house may carry other compliance problems nobody has mentioned. By the time it surfaces in title review, it is a lever, and buyers routinely extract credits worth several times what closing the permit would have cost beforehand.

2. The Certificate of Occupancy that does not match the house

If permits are about individual jobs, the Certificate of Occupancy is about the building as a whole. It states the legal use and occupancy — single-family or two-family, the number of stories, the approved layout — and it is the baseline against which every other compliance question gets measured.

A finished basement, a converted garage, or a third unit that does not appear on the C of O is unpermitted space in the eyes of the town and the lender, however long it has been there and however nicely it is finished. The book’s line on this is the one worth remembering:

“When the document and the building disagree, the building always loses the argument at closing.”

The consequences stack: lenders frequently require a valid C of O matching the property before they will fund, so no C of O can mean no loan and no closing. An appraiser may not count unpermitted space toward legal square footage, which suppresses the appraised value of a house you have been living in and paying taxes on. Selling with a known discrepancy and no disclosure invites a claim after closing. And discovered mid-deal, it hands the buyer a powerful reason to renegotiate or walk.

A temporary Certificate of Occupancy is its own item. A TCO permits occupancy for a limited period while final items are completed, and it expires. If a property is operating under a lapsed TCO — or under a TCO at all — treat it as an open matter to resolve before listing, because the buyer’s lender will. Some older homes, in places that did not require one at the time of construction, have no C of O on file at all, which raises a different set of questions to work through with an attorney.

3. The municipal violation quietly growing into a lien

A violation is a recorded finding that the property breaches a code — building, zoning, fire or health. Building code violations cover work done without a permit, structural deficiencies and failure to maintain. Zoning violations cover uses the zone does not allow: an extra unit, a home business, a non-conforming structure. Fire code covers egress, missing or non-compliant smoke and carbon monoxide detectors, blocked exits. Health code covers sanitation, pests, mold and habitability, and shows up most often on multi-family and rental property.

The danger is twofold: the violation itself, and the fines compounding in the background. An unanswered violation does not stay the same size. Penalties grow, and once they reach a threshold or go to judgment they attach to the property as a lien that must be satisfied before clean title can transfer. A small violation resolved promptly is an annoyance. The same violation ignored for years becomes a four- or five-figure surprise at the closing table, paid out of your proceeds, often with interest.

Violations do not announce themselves. They sit in a database, and the first time most sellers hear about theirs is when the buyer’s title search surfaces it. In a complex jurisdiction no single search is enough — violations live in different agency databases, and missing one is exactly how a clean-looking property hides an expensive problem.

On qualifying homes this work can be done as part of a Real Estate Plan listing with nothing out of your pocket, paid from the proceeds at closing. That is only possible because the construction and restoration companies are ours — see Construction Services for how the work itself is priced and run.

Related reading: Clearing Violations Before You List · Estate Planning, for the title, lien and ownership side of the same pre-listing search · Title Services.