Contractor’s Failure To Obtain The Proper Permits Results In Over $350,000.00 In Fines

By Corey B. Stern, Chitkowski Law Offices

In 2004, the Illinois appellate court ruled against a contractor for failing to obtain the proper permits and mandated that contractor's fine should be in amount not less than $354,700 and not more than $1,768,500.00, to be determined by the trial court. This case demonstrates the necessity of a contractor to obtain the proper permit for the work being performed or face the wrath of the government. This case specifically involves the City of Chicago Municipal Code ("Code"), but since most other municipalities have similar ordinances, this case is important to all contractors.

In this case, the contractor performed work on various properties which exceeded the scope of the original permit and did not obtain a post-construction permit for the excess work, for more than a year. The court stated that only when the new permit is issued for the excess work, will the accumulation of days in violation of the Code end. As a result of the contractor's negligence in obtaining the required permits, the contractor was in violation of the Code. Therefore, the appellate court stated that the Code required the imposition a minimum fine of $100 per day to a maximum of $500 per day.

This case demonstrates three very important facts which every contractor must take into consideration. First, any party performing work on any property must confirm that it has the proper permits. Second, in the event the contractor exceeds the work authorized in the permit, the contractor must immediately submit the altered plans to obtain a post-construction permit. It should be noted that, according to the reasoning in this case, just because the contractor has received a post-construction permit does not necessarily relieve the contractor from liability for not having the proper permit in the beginning. According to the Code, the accumulation of days the contractor is in violation for not having a permit ends when the proper permit is issued, whether the permit is for work to be completed or finished work. Third, this case demonstrates that the City of Chicago will vigorously pursue any contractor who violates its ordinances to the point that the contractor may have to file for bankruptcy or dissolve its business.

To prevent the situation which occurred in this case, the contractor should confirm two important facts. First, that the contractor's contract with the owner has provisions which provides for the contractor to stop performing work on the project, if the plans are altered and a new permit needs to be issued, without the contractor being held in default by the owner. Second, the contractor should be incorporated and confirm that its incorporation status is in good standing with the Illinois Secretary of State. If the contractor is incorporated, then only the corporation will be liable for the fines, and not an individual person.

-For more information please contact an attorney or Corey B. Stern at Chitkowski Law Offices at 630/824-4808.