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How to Avoid Permit Pain for Your Construction Business

Paperwork takes time, and time equals money.

That’s why getting construction permits is such a friction point: While your applications are in a queue, the homeowners’ enthusiasm dims and you lose chances to schedule work. You must juggle cash flow by ordering materials and lining up work without knowing exactly when you’ll be able to get started.

Permit pain isn’t likely to ease anytime soon, says Marcia Jergens, vice president of administration for the Homebuilders Association of Greater Kansas City. She tracks monthly permit activity for the region so that association members can anticipate what they’re in for at municipal planning and building departments.

The recession walloped the budgets of many towns, forcing cuts in the staff that contractors rely on for approvals and permissions. As property values and the economy have gradually recovered, some departments have rebuilt staff – but others haven’t.

“The first thing you have to understand is your area,” says Brandon Hall, founder of Brandon Hall, CPA, an accounting firm that specializes in real estate. “You have to understand what is standard for your municipality and then build it into the budget. We have clients with hard money and they sit on the hard money until the permits are approved.”

In Washington, D.C., where he’s based, permit applications routinely have a three-month backlog. It’s half that in Baltimore, in Hall’s experience.

The most important factor, he says, is to keep your cash available so that when a job’s permits are approved, you can swing into action as soon as possible.

“Once you get to know the market, you know what types of projects will take longer (for approvals),” he says. For instance, projects involving basement work might take much longer while minor remodeling that doesn’t involve structural changes might usually sail through.

Once you figure out the patterns for each municipality, you can estimate how long it will probably take to get the permits, and thus when you should actually schedule work and order materials.

Homeowners new to renovation might not realize how much patience and persistence it can take to obtain permits, so it’s up to you to outline the permit process as part of the overall project schedule.

But, adds Hall, homeowners who are have renovated houses before probably are up to speed on the complications that permits inflict on schedule. Expect that they have a pretty good idea of what’s involved and will also detect delays that are not related to the permit process.

“Don’t use it as an excuse to not schedule work,” says Hall. “Permits are part of the learning curve. You just have to plan around it.”

Joanne Cleaver is a widely published freelance business author, writer and former deputy business/real estate editor of the Milwaukee Journal Sentinel. She and her husband have renovated three historic homes.

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