How to Handle Permits, Contractors & Renovation Costs in Philly Real Estate

How to Handle Permits, Contractors & Renovation Costs in Philly Real Estate

As a Philadelphia landlord or developer, you know that navigating the city’s permits, managing contractors, and controlling renovation costs can be a massive headache. Trying to save money with cheap drawings often leads to costly delays, rejected permits, and major issues down the line.

We sat down with Jesse Smith, a Registered Architect and the founder of JLS Architects, to cut through the noise.

Jesse specializes in helping Philly landlords understand the permitting process, read architectural plans like a pro, and avoid expensive mistakes that can derail a project before it even starts.

The Architect’s Essential Role in Your Project

An architect is a systems thinker—someone who can see all the different pieces of a puzzle (engineering, vision, code) and orchestrate them into a completed project.

While a draftsperson or engineer has their role, the architect puts all those elements together.

When to Bring in an Architect:

Jesse advises that the sooner, the better.

Bringing in an architect during your due diligence phase, before you close on a property, can allow you to get drawings ready and submit for permits immediately after closing, saving you a month or more on your project timeline.

You should call an architect when in doubt, but specifically if you are:

• Changing spatial orientation (adding/removing walls).

• Planning an addition to the building.

• Converting a single-family home to a duplex or multi-family unit.

• If your work is only cosmetic (painting, new flooring), it may fall under a Level One Alteration or a simple repair, which may not require an architect's involvement.

Understanding Levels of Alteration (The "Grandfathered" Rule)

The building code, defined by the International Existing Building Code, categorizes alterations, which is what people generally refer to when they use the term "grandfathered in".

Level One Alteration:

Basic cosmetic work where there is no change to spatial orientation (e.g., new flooring, painting, replacing kitchen cabinets). Replacing a door or window with the same type is typically a repair.

Level Two Alteration:

Changing the space of a space, such as adding or opening up a wall (e.g., creating an open-concept living area).

Level Three Alteration:

Touching more than 50% of the building's footprint at one time (e.g., gutting both the first and second floors of a two-story home). This generally means any area you touch must be brought up to current code.

Sprinkler Systems for Duplexes:

Converting a single-family home to a duplex without an addition does not typically require a sprinkler system in Philadelphia because both are considered R3 occupancy (one or two-family dwelling).

Zoning and building codes are separate entities; an architect deals with the building code.

Navigating the Philly Permitting Maze

The typical Philadelphia landlord will be seeking an RP permit (Residential Permit) for single-family homes or duplexes, submitted through the city's online Eclipse system.

Permits and Approvals Needed:

Scope of Work Required Permit/Service Notes:

• Any alteration/renovation Residential Building Permit (RP) may require architectural or structural drawings.

• Plumbing Fixtures/Pipes Plumbing Permit Required if touching or swapping any plumbing elements.

• Electrical Work/HVAC Wiring Electrical Permit Required if touching anything electrical (e.g., upgrading service, new outlets). Inspected by a third-party agency.

• New HVAC Unit/Ductwork Mechanical Permit can be pulled by the general contractor.

• New Water/Sewer Lines Utility Plan Prerequisite that goes through the Philadelphia Water Department.

Key Pitfalls and Delays:

Two forms are commonly forgotten and cause significant delays in the permitting process:

1. Waste Hauler Form:
   Requires the contractor to document and keep dump receipts to prove trash was not illegally dumped. This form must be signed by the contractor and uploaded.

2. Owner Signatures:
   Owners must personally sign forms like the Energy Compliance Certificate and Special Inspections Form.

   

Permitting Timeline:

The city officially allocates 20 business days for building permit review.

However, expect an approval to take around 60 days because reviewers often send back questions or comments, restarting the 20-day clock. Treating the plan examiners with respect can significantly speed up the process.

Contractor Management and Bidding

You must have a licensed contractor pull the required permits. You can submit the permit application without a contractor listed, but L&I will issue a permit hold until a licensed contractor is provided.

Bidding and Budgeting:

The best way to get accurate bids is by issuing a Request for Proposal (RFP) to a select few reputable contractors.

Bid Leveling:

Ask contractors to provide a breakdown based on CSI (Construction Specification Institute) divisions. This allows you to compare "apples to apples" and ensure all scopes (e.g., exterior work) are included, preventing expensive surprise changes later.

Budgeting:

Relying solely on cost per square foot is inaccurate and can lead to significant budget overruns. Perfectly designed projects, called a Class One budget, still have an expected cost tolerance of plus or minus 5-10%.

Final Advice: Communication is Key

Jesse's one piece of advice for Philly landlords is to do your best to communicate your needs. Explain everything—your budget, your timeline, and why you are doing the project (financial or emotional motivation)—to your architect and contractor.

Open communication is the most reliable way to ensure projects go smoothly.