Looking into remodeling a basement in a major US city. The basement height is too low to meet code and I have been told that it is extremely unlikely that the city would grant a variance. I have talked to 4 contractors/design companies and none of them have any problems with not pulling permits for the job. These are all established companies with licensed contractors who use licensed sub-contractors. Can a licensed contractor perform work, that requires a permit, without a permit?
The way I read your answer does not imply working without permits, and all the answers here are literally going up that tree and is annoying to say the least. ( But I have not down voted any ).
Granted each City varies by what they allow but technically the short answer is NO, builders/contractors are not required.
Why you may ask? Simple, because you can sign an affidavit with the City acting as the General Contractor. And voila, you yourself pull the building permit.
Now this is wonderful right? Yes because it saves everyone overhead which equals lower cost, but the catch is now
you need to verify all your subs are licensed, insured if necessary, and have workers compensation if necessary. . My bad, the City does the background check for the required license and business license only,, with the exception of the General Contractor since you'd be the general contractor. You'd still need to have proof of insurance and/or workers comp REGARDLESS who acts as the contractor. States vary on workers compensation laws too so do your homework.
Typically for permitting you will need to sign an affidavit with each licensed sub ( electrical, plumbing, HVAC ) to the City stating you are the General Contractor.
By doing the affidavit you take some of the hassle and legal headaches off the builder. Each job varies too. Some times it works out better sometimes it doesn't.
Now, if you decide to opt out and let the contractor do all this, they would provide the City with their business license and state license for contracting. All the licensed trade subs would do the same. For a small job like yours this might be around $2000 in paper work and running around for the contractor. You'd have to discuss that in detail with them though.
You still should do your homework to make sure each subcontractor is licensed with insurance and/or workers comp. Many States offer easy online search tools to find out.
Can a licensed contractor perform work, that requires a permit, without a permit?
If the work requires a permit - that is a City / State Ordinance [aka LAW]- the answer is while the contractor could perform the work - it is a violation of the Ordinance. It is possible that the contractor might have it in fine print where it requires you to get the permits. They do the work "assuming" you have the permit or are in process. You can check to see if they really are licensed - I doubt a licensed contractor would do anything with out the permits.
This presents two problems:
If you are found out to have done this work with out a permit you are probably going to be required to undo the work.
The other issue you have is in selling the property - changes to the property can be looked into and a buyer or a buyers inspector can check for permits on the property.
a: In this case you would need to get it permitted in order to sell the property, which winds you back to the possibility of undoing the work at your expense of course.
The Contractor probably requires you to get permitting - somewhere in the fine print so they can cover themselves. In the end you will be out the money you pay to the contractor and possibly more to have it all undone.
Get a contractor who will get the required permits, ask for the variance as it is an existing basement - you just might get it unless you are intending to make the ceiling height lower in your remodel. I assume you are going to put in rooms of some sort or a entertainment space.
if you are turned down , you are turned down; permitting is not expensive - undoing completed work is.
Don't build anything without a permit!!!!
However, the "code" only stipulates the height of "habitable rooms" (7'). Bathrooms, storage rooms, utility rooms, hallways, etc. are not habitable rooms. Habitable spaces are rooms used for living, eating, cooking and sleeping. (R202)
Can you call the rooms: study, kids playroom, closet, etc.?
However, you can't sell the house as a 5 bedroom house if you only have 2 "legal" bedrooms.
Oh, by the way, the new Code is due out in 2018 (I think it gets adopted in September) and I don't know if the same rules apply.
You will need to get the exact legality of this situation from your local building codes enforcement.
But for illustration:
I work as a municipal building inspector for a small city and if I was told of or witnessed a basement finish in progress, I would go to the job site and ask for the building permit. If they did not have permit, I would issue a 'stop work order', essentially you cannot do any more work until you get a permit. And you have to stop work when asked; I have called the city police to enforce a stop order before.
The penalty for not having a permit will vary by jurisdiction but in my city it is double the permit fee. So if your permit was 55 dollars, it jumped to 110 dollars. Depending on the work done, I might have you tear the work out so I can do the needed inspections. That is additional money.
In the end, the City could come after you because you are the owner of the property, not the contractor! You are ultimately the responsible party of many thing when it comes to building safety as the owner. Less scrupulous / fly-by-night / storm-chaser, contractors may be okay with doing work without a permit but they may not be the one on the hook if something goes wrong.
Additionally, as described by @Ken, you may run into other problems when trying to sell the house or getting it appraised later down the line. When a permit is completed and the Certificate of Occupancy/Completion is issued, a copy is usually sent to the county where they adjust your property values and record the improvement; home value changes a lot dependent on number of bedrooms. If an appraiser or home inspector finds that rooms were added without a permit it may hurt your value or cause the buyers to back-out of the purchase entirely. People do check for these permits quite often.
It may be a inconvenient, but getting a permit lets you have some margin of certainty the contractor didn't cut corners that might get you killed or ruin your investment. It will let future buyers know that the property was constructed by best practice. Even if you plan on spending your remaining years in this structure, it will be easier for your children to reap the benefits of your investment with the addition being permitted.
Engineers, architects, and even contractors have spent thousands of hours compiling the International Residential Code to give you a minimal standard of safe housing construction. It wasn't publish with mustache twisting because we get off on telling people how to do something, but to keep people from dying from outdated or faulty practices.
Speak with a Building Official or his representative (could be an inspector), they may be able to suggest alternatives that get you to your goal. Hiring an architect familiar with local codes could help you just as well.
Has anyone ever answered a question twice? Hmmm...we'll, here goes...
This won't answer your question, but may help you. You may NOT need a Building Permit.
Little known fact: the code is actually divided into two parts: 1) Construction, remodeling, additions, etc., and 2) maintenance and non-structural work. You don't need a Building Permit for maintenance or non-structural work. That's why we don't get a permit for re-carpeting, re-painting, building partitions, etc. Likewise, you don't get a permit for replacing a window (construction) if it's the same size or smaller. However, if it's larger, then you need a bigger header and that is structural.
You still need to get plumbing and electrical permits, regardless if you get a Building Permit or not.
Also, you can't build something that doesn't meet code, but you may not need a Building Permit. What you call the room is important. You can't call a room a "Utility Room" , build an egress window and then put a bed in it.
There are many items covered by a Building Permit like, ducting for a forced air heating system, handrails, guardrails, bath exhaust, etc. But, if you're not installing items like that, then you may not need a Building Permit. (There are about a zillion items like that and you won't know until you discuss your project with the Building Official.)
In fact, I'll often call the Building Official (not a Building Inspector, not a Plan Reviewer, etc.) and ask him if I can't submit something in one way or not. Then, if he doesn't agree, I ask how he'd change it to make it work. You'd be surprised how creative he can be...be sure to ask about partitions. (Here, our town does not require a permit for re-roofing (maintenance), but the neighboring town does (they consider it construction.)
By the way, it doesn't matter what I, or anyone else, tells you...it only matters what YOUR Building Official tells you. For every Building Official you find that says Kids Play Room is not a habitable space, I can find one that says it is. So, don't go in to the Building Department acting like you know everything. Ask questions and let them know what you're doing. They are there to help.
Sorry...this is way off topic from your question...I always get minus marks for deviating from the original topic, but I thought this might help.