The first step in identifying if you need a permit to refinish your basement, is to determine if it is in fact a basement, or a cellar. Although the two terms are consistently mistaken for each other, they are distinctly different according to the Department of Buildings (DOB). A basement is at least 50% above grade and is considered a habitable space, whereas a cellar is at least 50% below grade.
A cellar is not considered habitable space and therefore, is limited in its use. A cellar cannot be used for sleeping, eating or primary cooking purposes. It can be renovated to accommodate certain household functions like a rec room or storage room, and potentially a secondary kitchen, or a ¾ or half bath. Whether the lowest level of your home is considered a basement or a cellar, most improvements will require an architect to file plans with the DOB, and will require permits.
The most common renovation to a basement is the addition of an extra bedroom, a bathroom or a kitchen, and in some cases, all three. When renovating a basement to add livable space, permits are required and architectural plans will need to be filed with the DOB. Refinishing the basement is one of those projects that people think they can do without a building permit, because the work isn't visible from the street. However, that is a mistake. If you get caught, the building department can force you to either legalize the work or remove the improvements.
NYC employs various enforcement procedures when they suspect work is being performed without a permit. Enforcement can include a violation for the work performed, an Order to Vacate and/or a Stop Work Order, all of which will immediately halt progress of the job and will bear costly fines.
If you are a handy homeowner with the ability to make improvements to your home, beware. The same filing and permitting requirements apply to you even though you are not a "contractor". The specifications of the work you are doing to remodel or renovate your home determine whether a permit is required, not who is doing the work.
The big concern about remodeling or renovating your basement is when a professional contractor doesn't secure a permit for the work, when it is clear that the work being performed requires a permit. That type of negligence places the homeowner in a vulnerable situation, as the burden of the penalties, and the requirement to make necessary changes, falls into the lap of the homeowner.
If a contractor suggests to a homeowner not to obtain permits to save costs... that homeowner should avoid retaining that contractor. A contractor that does not secure a permit for any project that requires one probably isn't licensed and doesn't have insurance, or both.
Liability for a construction project is assumed by the person or company that the permit is issued to. Simply stated, if you hire a contractor to finish your basement and they don't secure a permit, then you the homeowner, assume all liability for the project. What happens if a worker gets injured? They will come after you for damages. If the contractor has secured the permit for the project then he would be responsible for any accidents. A licensed contractor will carry both liability insurance, as well as workers compensation insurance, and in most cases, this will protect you as the homeowner from liability.
The intent of filing a work permit with the DOB is the safety and performance of the project by confirming that all work was done according to local building code. Depending on the scope of work, multiple permits may be required for construction, plumbing and electrical work.
Don't be short sighted... Look at the permit and inspection process as an opportunity to have professional building inspectors verify that the work performed on your home is safe and professional. Skipping the permitting process can cost you thousands of dollars down the road.
One major implication of finishing a basement without a permit is what happens when you try to sell your home. In any real estate transaction that uses a broker or title company, there is a verification process whereby the square footage of your home, and the improvements made to your home will be checked with the local assessor's office and building department. There is a clear delineation between an unfinished and finished basement that the appraiser will note in the appraisal report. In cases where a finished basement exists, but is not noted on the certificate of occupancy, almost always, a buyer's agent will require that the finished basement be permitted and inspected as a condition of the sale. This process can cost thousands of dollars including a triple permit fee for doing work without a permit.
My advice to you is that in no way, shape or form is it worth trying to 'get away' with finishing your basement without a permit.
If you are considering refinishing your basement to use as a rental, there is no doubt your first phone call should be to a registered architect. The rental of a basement in a two-family dwelling would result in changing the status of the building to a multiple dwelling (three-family or more) and would require a new certificate of occupancy. The same would apply for a one-family dwelling, which would require changing the status of the building to a two-family dwelling. Furthermore, if an owner is interested in renting the basement of their two-family dwellings, they must comply with all provisions of the New York State Multiple Dwelling Law.
Aside from the other important factors above, there is almost always a correlation between the quality of the finished project and whether a permit was issued. A licensed and insured professional contractor is required to use licensed, insured sub-contractors for work such as plumbing, electrical and mechanical. As a general rule, any contractor that has taken the time to establish themselves with a license, insurance and a lengthy track record of happy clients will not be cutting corners with sub-par tradespeople. Of course, there are other factors besides being licensed and insured that separate one contractor from another, but if a contractor isn't willing to pull the permit for the project, cross them off your list of consideration and move on to a more professional basement finishing contractor.
The permit process is important and should not be overlooked! If after consulting with a contractor about your basement or cellar improvement you are uncertain if it requires a permit, consult with an architect who can guide you in the right path. Make sure that if your contractor states they will secure the required permit, it is included in your contract.
Ronald D. Victorio, R.A., AIA
Ronald Victorio Architects