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Contractor glossary

Building permit

Updated

Definition

A building permit is written approval from the local building department to do regulated construction, plumbing, electrical or mechanical work. It comes with inspections at set stages, and the job isn't finished until the inspector signs off on the final.

Also called: Permit, Construction permit

What needs a permit

The answer comes from whatever code your city, county or state has adopted, along with its local amendments, so the building department that will inspect the job is the only reliable source. The International Residential Code shows how broad the rule usually is. Its model text says anyone who intends to build, alter, repair, move or demolish a home, or to install, alter, repair or replace an electrical, gas, mechanical or plumbing system the code regulates, must first apply to the building official and get the permit 1.

The same code lists work that's exempt, such as painting, tiling, carpeting, cabinets and similar finish work, and fences up to a set height. It also says an exemption never authorizes work that breaks the code 2. Local lists differ, so a water heater swap, a re-roof or a panel change can need a permit in one town and not the next.

Inspections are part of the permit

A permit isn't a one-time fee. Under the model code it's the permit holder's job to tell the building official when work is ready for inspection, rough plumbing, mechanical, gas and electrical work is inspected before it's covered, and work can't continue past an inspection point until it's approved 3. Every inspection is a date on your schedule and a possible return trip, so build them into the timeline and the price.

Who pulls it

On a contractor job, you should. The FTC lists a contractor asking the homeowner to get the required building permits among the signs of a home improvement scam 4. Some jurisdictions also tie permits to a license or local registration, so check with the building department before you take work in a new town.

Example: A plumber quotes a water heater replacement as one line: "Install new 50-gallon gas water heater, $2,400." The town requires a permit. A clearer quote adds "Permit and inspection: we pull the permit, schedule the inspection and meet the inspector. Fee included: $95." The price is made up, but the customer now knows who handles the permit and that the job closes when it passes.

Common mistakes

  • Leaving the permit off the estimate. List the fee and say you pull it.
  • Skipping it on small jobs. Unpermitted work can come up later, for example when the house is sold, and making it right can mean opening finished work.
  • Covering work before the rough inspection. Drywall over uninspected pipe or wire may have to come back down.
  • Billing final before the final. Tie the last payment to the passed final inspection, and record the permit number and date on the invoice.

How it connects

An inspector can require changes the estimate didn't include. Handle those with a written change order, and define what's in and out in the scope of work. Electrical work is inspected against the edition of the National Electrical Code your area adopted, and solar adds the utility's permission to operate after the final.

Go deeper

Plumbing guideHow to Write a Plumbing EstimateHow to write a plumbing estimate: fixture-by-fixture scope, allowances, permits, code items, exclusions, camera findings, repipe options and changes.Roofing guideHow to Write a Roofing EstimateWhat goes in a roofing estimate: squares with pitch and waste, line items adjusters expect, code items, decking allowances, photos, warranties and payment terms.Electrical guideHow to Write an Electrical EstimateHow to write electrical estimates for service upgrades, EV chargers and circuit work: load basis, scope by circuit, permits, utility steps and exclusions.Solar guideHow to Start a Solar Installation BusinessStarting a solar installation business in 2026: state licensing, NABCEP credentials, permits and SolarAPP+, utility interconnection and the end of 25D.
Scope of workA scope of work is the written description of exactly what a job includes and what it excludes: the tasks, materials, quantities, locations and standards of finish. It's the part of an estimate or contract that defines what the price buys, so anything outside it needs a change order.EstimateAn estimate is a contractor's expected price for a job, based on the scope as it's understood before work starts. It tells the customer the price could change if the work turns out different, but whether it binds you depends on its wording, the customer's acceptance and your state's law.Change orderA change order is a written amendment to your contract that changes the scope of work, the price or the schedule, approved by the customer before the changed work starts. It records what changed, the added cost or credit, the new contract total and any new completion date.National Electrical Code (NEC)The National Electrical Code (NEC) is NFPA 70, the model code for electrical installations published by the National Fire Protection Association. It isn't law on its own: it applies where a state or local government adopts it, by edition and often with amendments, and inspectors check permitted work against that adopted version.Permission to operate (PTO)Permission to operate (PTO) is a utility's written approval to turn on a grid-tied solar system. It's the last step of the utility's interconnection process, separate from the building department's inspection, and the system should stay off until it arrives.Punch listA punch list is the written list of small items still to finish or fix at the end of a job, such as touch-ups, missing trim or adjustments, that the contractor completes before the customer signs off on the work and pays the final balance.

See every term in the glossary

Sources

  1. 2021 International Residential Code, R105.1 Required International Code Council
  2. 2021 International Residential Code, R105.2 Work exempt from permit International Code Council
  3. 2021 International Residential Code, Section R109 Inspections International Code Council
  4. How To Avoid a Home Improvement Scam Federal Trade Commission

Rules and figures change, and many requirements vary by state and city. Check the current version of each source and your local authority before acting, and talk to a licensed professional about your specific situation.