The two permits pulled for work on 4 Presidio Terrace in 2008 and completed in 2009 that identify Plath & Company as contractor total $60,000 in estimated costs (the amount on which permit fees and taxes are based) but does includes a revision to a permit pulled in 2007 for $50,000 worth of work (which they might have done as well).
Two weeks ago Plath & Company filed a Mechanics Lien for their work on 4 Presidio Terrace in the amount of $259,896 (the amount on which they actually want to be paid).
Is it ordinary for the estimated costs to be so far out of line with the real costs ? I understand the motivation to underestimate to reduce permit fees, but this seems too large of a difference to go unnoticed.
No one reports to the city what they actually spend on their homes.. The discrepancy here seems pretty minor to me..
This under-payment of permit fees is SOP. I think the amount a contractor is allowed to file a lien for should be limited to the amount of the permitted work. This increased risk to the contractor would promote honesty and increase permit fees and appraised values.
The current system does nothing to discourage anyone from lying about the value of the work. Also, makes it harder to determine the true scope/value of hidden work performed on a remodel. Did the foundation only cost $20K to repair, or is the contractor a good liar?
CA Superior Court Case Number: CGC-10-496951, SUNSHINE CONSTRUCTION, INC. VS. PLATH & COMPANY, INC et al was filed Jan 11, 2010 that (sorta) explains this situation.
The lawsuit claims breach of contract inter alia and the contract is attached to the complaint.
Sunshine’s (Sub Contractors) original lien amount was $28,160.89.
Interesting quote, “ The Contract price increased from $90,017 to $218,608.95 as a result of additional work requested by defendants.
Looks like the Sub Contractors, Sunshine filed the Mechanics Lien and have asked the court to foreclose, to sell the property, and for permission to be a purchaser of the property.
Anything published on the DBI Permit websites can Never Be Fully Trusted. APN: 1355 067
Check it out yourself.
http://207.215.212.22/minds_asp_pdf/Viewer/DownLoadDocument.asp?PGCNT=0&ALL=Y
“I think the amount a contractor is allowed to file a lien for should be limited to the amount of the permitted work. This increased risk to the contractor would promote honesty and increase permit fees and appraised values.”
Agree, this would be a great way to provide more transparency in this process. And it would help the city’s tax base as well.
Most property owners do whatever they can to avoid pulling a building permit since every time a city worker sets foot on your property they will cost you money (make you add sprinklers, ADA stuff, more handrails, etc.). The main reason that people do what they can to avoid permits or if they can’t avoid one lowball the estimated cost is that under Prop. 13 you need to pay when you improve a property. If you own a home with a $250K tax basis your annual property tax bill will double if you get permits for a $250K remodel (and you will end up paying more than $30K in extra property taxes over the next 10 years)…
P.S. to cvp who wrote: “I wouldn’t pay this much, however, for a house I had to worry about getting mugged when I walked outside of” I’ve lived a few blocks away from this house for years and “you don’t have to worry about getting mugged in the area”. I can’t even think of any part of San Francisco where you would be less likely to be mugged (I have not checked actual crime stats, but I’m betting that the “presidio heights & terrace part of 94118” is close to the lowest in the city for every kind of crime…
[Editor’s Note: cvp’s comment was posted to the wrong thread (but since corrected).]
Not all work is required to be permitted, so it is not unusual for permit value to vary from actual contracted value.
You certainly don’t need permits to file a mechanic’s lien as I discovered a few months ago. My GC stiffed one of his suppliers and the supplier filed the lien directly on my home.
A bunch of phone calls and emails to the GC culminating in a threat to sue finally got him to cough what he owed the supplier. So I’m still on course for going through life without ever being a plaintiff or defendant. Now if I could just avoid being summoned for jury duty every two years I’d be really happy.
Rarely is the permit filled out by the contractor, but by the homeowner or architect. They haven’t yet, in the case of an addition, even done detail drawings or engineering at submittal. They certainly haven’t taken the project out to get actual bids. So, the permit is a best (lowest) guess. The permit application has as place for the building/planning department to change your number if they think it’s too low.
The Milkshake of Despair wrote:
> Now if I could just avoid being summoned for
> jury duty every two years I’d be really happy.
If the jury duty notice just “happens to get hidden in the junk mail” and it gets tossed in the trash “by accident without you seeing it” (and this also happens to the follow up jury notice letters) you will never have to go to jury duty (last time I talked to someone in the court system they told me that they get “no response” to almost 80% of the jury notices that they send in the mail and do not follow up on any of them). ..
P.S. I would never do this and consider it my civic duty to spend time on a jury…
I would absolutely like to see the permit fee system cleaned up in the city. If you think the city does not take it’s pound of flesh for any construction being done, you are not understanding where the money comes from that funds this city.
I have had a job that the permit ran close to 20% of the total cost! Every little thing that they look at gets a special stamp that costs $100’s. And planning charged me 90 hours for something that could not have possibly taken more that 8-16 hours as the neighbor had just done the exact same thing per the reviewer.
The one saving grace is that I find the inspectors are generally very helpful. But getting out the door of the building/planning department without getting fleeced is a big challenge.
And I don’t think that they increase your tax bill based on the $ amount of the permit. I believe they have a fixed increase on what was improved, like $25K for a kitchen and $10k for a bathroom, ect..
The Building Dept has a basic formula to establish estimated construction cost on the permit application. It involves a multiplier per square foot of floor area with different multipliers used for remodels and new construction ($125/sf for the latter I believe – way below average market rate). This establishes an apples-to-apples baseline so it doesn’t matter if a fancy outfit like Plath (at $700+/sf) or a small neighborhood builder w/ a pick-up (at $200/sf) is building the project.
DBI will revise the number if the application estimate is too low.
And their motto is: “I’m from the government and I’m here to help you.”
Building inspectors!!!!!
Linky to Lawsuit (I hope this works)
http://webaccess.sftc.org/Scripts/Magic94/mgrqispi94.dll?APPNAME=IJS&PRGNAME=ROA22&ARGUMENTS=-ACGC10495951
I would think it in the homeowners interest to low ball the permit estimate. I mean, it’s an improvement and an improvement increases the value of the property…..ergo, higher taxes.
Some contractors work for cash also…maybe not $259k. So, there is that factor also.