We recently heard from a homeowner who was blindsided by her local water district. The reason?
An unnecessary new water meter triggered over $25,000 in permit fees that should not have been charged.
We intervened before a second, similar fee was charged for a new gas line. This saved the owner over $25,000. That’s right, the city was going to charge $50,000 that they were not supposed to collect. Our team, along with the owner sending a note to her city council, eliminated the second fee.
We really sympathize with homeowners when this happens. And unfortunately, it happens a lot. You can be a smarter developer and owner by knowing the codes and questioning the agencies the right way.
Why Surprise Fees Happen in Construction
The truth is that fees are a necessary part of building a home. Everyone expects to pay fees to the city, and they include those fees in their budget.
But sometimes things don’t go according to plan. A prime example is one city that has a park fee, a park program fee, and a third fee for park program administration. Most people don’t imagine paying all these fees when they build a house, so they don’t budget for them.
The key is in planning ahead. Of course, that’s easier said than done. City offices can make budgeting for permit fees incredibly hard. They’re not always up front about which permits you’ll need and how much they’ll cost.
Even if you’re dealing with a city planner who’s knowledgeable, professional, and interested in helping you, you may still have problems in understanding exactly what fees you’ll be charged.
You may even be charged fees that you don’t have to pay.
It’s not that city planning offices are dishonest. It’s just that like most government bureaucracies, they’re incredibly complex. One city planner can’t possibly know what every other officer is doing, and someone from one department can’t (and shouldn’t) speculate about compliance in another department. If you don’t ask the right questions, you won’t get all the answers.
Of course, most homeowners don’t know the right questions to ask. And they shouldn’t be expected to.
How Experts Avoid Surprise and Erroneous Fees
At New Avenue, we use a planning research form that reminds us that there are 27 different offices that may want to review a building permit application and charge you a fee. We use this list of questions to ask at each of the different departments so we can figure out what the fees will be before we start and minimize surprises during the permitting process.
Depending on the project, we check with two to fifteen different agencies. It’s a lot of work, but it also prevents a lot of pain later on and helps us create accurate budgets.
When we see a fee that doesn’t make sense, we ask the agency, we reference state laws, and we even engage our local council people. This often corrects massive fees that aren’t necessary.
Unfortunately, when you’re dealing with permits, the rules aren’t always black and white. Often, politics and officials’ individual interpretations come into play (and cause a lot of problems for the homeowner). Nobody can prevent every surprise permitting snag and every surprise fee, but the right kind of research can certainly help.