L&I Issues Guidance on Construction Permit Expiration
Due to rising construction costs, rising interest rates, sales and rental market conditions, as well as other factors, many developers possess Philadelphia Zoning and Building Permits that are expiring soon.
06.12.24
Some building permits may have been issued on or before December 31, 2021, and thus subject to the former and generous 10-year real estate tax abatement regulations. A permit that expires can implicate a myriad of non-preferential conditions if the developer needs to obtain the permits again. Such conditions include:
- The cost and time of returning to the Philadelphia Zoning Board of Adjustment (ZBA) to seek relief again, along with the risk of change in support or opposition by interested parties.
- Loss of the pre-2022 10-year real estate tax abatement availability, and applicability of the new tax abatement rules.
- Possible changes in the applicable Building and Fire Codes that would redesign and require the revision of construction plans, as well as increased costs.
- Paying the full cost of the fee of the new building permit.
Accordingly, extending a permit—if that option is available—would be most preferential.
With this in mind, here is a summary of the available permit extensions:
- A zoning permit that approves and involves construction is valid for three years, during which time one must secure a building permit.
- For a zoning permit issued as a matter of right, the permit can be extended for one additional year from the three-year expiration date.
- For a zoning permit based upon a ZBA approval, the permit can be extended for one additional year from the date of the ZBA decision.
- A building permit is valid for five years; that is, one has five years within which to complete the construction. There is no means to extend a building permit beyond five years.
- Once a building permit is issued, work authorized by the permit must commence within six months after issuance of the permit in order for the permit to remain valid. After work has commenced, authorized work cannot be suspended or abandoned for a period exceeding six months at any time during the life of the permit or the permit will become invalid.
Notwithstanding, a building inspector is authorized to extend in writing the time for commencing or suspending the work for reasonable cause. A maximum of two extensions, for a total period not exceeding 12 months, may be granted to extend the time to commence work (i.e., you can obtain extensions that will allow you to push off commencing construction until 18 months following the issuance of the building permit). Once work has commenced under a building permit, a maximum of one extension, for a period not exceeding six months, may be granted to extend time on suspended work (i.e., you can obtain an extension that will allow you to stall work for 12 months while maintaining the building permit as valid).
Notwithstanding, extensions to the deadline to perform work under a building permit do not extend the ultimate expiration date of the permit. All building permits expire five years from the date of issuance, regardless of whether one or more extensions of the deadline to commence work were ever issued.
L&I’s recent FAQs provide helpful information about some of the most common questions related to construction permit extensions. They are also timely considering recent capital market trends that have made obtaining construction financing more challenging, delaying construction start dates. If you have any questions about L&I permit extension issues, please contact the zoning and land use practice at Klehr Harrison.
Co-authors Ron Patterson, chair, and Stephanie Boggs Magagna, associate, are members of the zoning & land use practice group at Klehr Harrison.