Permits And Escrow Accounts

bert0168

The borough I am going to be working in requires escrow money to be held until the CO is issued. I am pulling all permits.

I don't want to tie up my money until the officials finish ing around and finally return it to me 3 months after the CO.

So, how do I present this to the homeowner so that it is their money that is held and not mine?

We Fix Houses

Escrow acct for what and how much ?

Maybe an escrow acct or performance bond ? A performance bond is available from your ins broker.

bert0168

Anyone?

rbsremodeling

Dear sir I need 1k for the city to place in escrow until the CO is issued. Please make check payable to wala wala burough county usa.

Thank you for your cooperation

__________________

bert0168

I guess it's to assure the work gets done by the contractor.

It's only $250. I know, not enough to cover anything incomplete or wrong. (Not from me )

I had to do this a few years back and they held up getting me back my escrow for 3 months after the CO was issued. I just need some advice on weather or not I should try to get the HO to put it up and if so how to approach it with them.

We Fix Houses

I guess ??? How about finding out and posting again. Does the township have a website that explains ?

Performance bonds are a direct cost to the job, same as a 2x4. Go over it with the customer as you would any materials.

Its not an indirect cost such as telephone, truck, tools, office equip. that your customer thinks is included in your price.

bert0168

Here ya go...

3. BUILDING PERMITS (Applies to all construction)

GREEN POINTS: Applicants for Building Permits for Residential or
Commercial new construction, additions, or remodeling may apply for
Green Points to reduce the amount of the permit fees. The burden of
demonstrating compliance and qualification for Green Points is the
applicants and all required documentation must be submitted along
with the Green Points worksheet.

Compliance Guarantee Deposit: A $250.00 escrow deposit is required for
Building Permits. This deposit will be refunded upon issuance of a Certificate
of Occupancy conditioned on all required inspections being completed and
approved.

Is this a performance bond?

We Fix Houses

What are Green Points ?

Is this a local initiative to promote green building practices / technology ?

From what you just posted sounds like its optional. If you do choose "Green" then the inspector will verify that you have done the green items on your permit application and you'll be eligible to get all or part of the $250 back. The escrow fee is to guard against abuse of the program seems to me. Keeps people from applying for Green Points and then not building as such.

Is this the case ? Or what is ???

bert0168

The Green Points don't have anything to do with the escrow. It was part of what I cut and pasted.

The escrow statement was at the bottom of the permit fee schedule

wellbuilthome

I write a work order for the price of the permit escrow , and road bond . The HO get there CO , escrow, and road bond from the town at the end of the job . I have three bonds out now 2500 each . Most of the time they are 1000 bucks.

Kgmz

When I read your first post I assumed we were talking about some big money like 10's of thousands of dollars.

But $250, I would hope you are making a lot more money than that on each job.

And if I was the homeowner I would not pay it, even if I got it back at the end. The person that shoud be paying it is the one who is responsible for the job and is responsible for compliance, and the one who is pulling the permits. Now if it was the homeowners name on the permits as the rsponsible party/self contractor then they should pay it.

rbsremodeling

This makes absolutely no sense. I apply for all permits on my job, engineering fees, and sometimes permit expediters. The homeowner pays for everyone of these fees, why wouldn't they??

__________________

Kgmz

Because it is basically just a deposit that you get back. So it is not in reality a fee that the homeowner should pay.

And the key word "compliance". Who is responsible for that.

And also it is just $250, Geez. And you get it back.

If you want to talk big money, I have a $375,000 cash bond to the county that has been in effect for a year now to guarantee the road improvements will get done for a large commercial job. It was a lot cheaper for me to put up the cash than get a bond, plus I get to keep the money in a CD and I get the interest. A Win Win for me, no bond fee and I still get my interest.


Or just build the $250 fee into each job, and when you get it back it will just be extra profit.

bert0168

Compliance isn't an issue where I am concerned. All my jobs are done to code compliance regardless. Perhaps other contractors in the area have histories of leaving jobs unfinished or not to code, I don't know. I understand the borough doesn't know this but still not the point.

No it's not big money but I don't set the fees. It's a front porch renovation but the amount isn't the point.

Yes it's a deposit but one associated with each specific project. This is on top of the contractor registration fee and the permit and zoning fees they will be receiving.

The point I was trying to make is why should I let the borough hold my money, money that they required PRIOR to the start of the project, beyond the day that the CO is issued. This agency, in my experience, has a history of holding monies up to 3 months following a CO. I do not have the option of a CD with this amount or this agency. I am sure they are using it to generate the interest for themselves.

I really wanted to know if most guys put up the money themselves or had the homeowner write the check.

bert0168

Kind of what I was thinking. It is a fee associated with the job IMO.