Originally Posted by ted527
homeowner retains portion of final payment until inspections are passed.
also if contractor is on the permit there is a paper trail if something bad happens.
A permit is a permit. The application informs the AHJ of the planned work and allows for inspection of said plans and work as to conformation to the applicable codes.
A contract is a promise for consideration, that is the paper trail. You can tie your payment schedule to passed inspections (
) but, whose name is on the permit is moot as the permit is neither a promise or consideration.
In a worse case, if the client and contractor part company on less than amicable terms and the permit is in the contractor's name, the AHJ can delay or charge for transfer of the permit to the homeowner. This happened to a client I worked for
. Remember the contractor buys the permit with the client's money and ought never have to pay for them twice.
A title search will turn up any open building permits which can delay/derail refinancing, home equity lines, or sale.