Old Forgotten Permits Are Slowing Down Deals

If you’ve ever bought or sold property in New York City, you know there’s no shortage of moving parts. But lately there’s one unexpected deal‑breaker showing up again and again: open building permits from years, sometimes decades, earlier. Forgotten renovation paperwork is suddenly surfacing in title reports and bringing closings to a halt.

Let’s unpack what’s happening, why it’s happening more often, and how buyers, sellers, and agents are dealing with it in 2026.

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The Problem: Open Permits Are Killing Deals

Real estate agent Mike Fabbri noticed a pattern in 2025. Six of his deals fell into limbo because old permits weren’t properly closed with the NYC Department of Buildings (DOB). These weren’t illegal additions or massive code violations. They were renovation permits that were filed but never signed off with final inspections and approvals.
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In many cases, these open permits do not appear until the very end of the process, when the title company flags them in a title search. Suddenly, neither buyer nor seller wants to take on the liability. Fixing it can mean hiring professionals, reopening walls, and paying thousands just to get the city to sign off.

Agents report:

• Money sometimes has to be held in escrow until the permit is resolved.
• Sellers may end up paying unexpected costs to close a permit they did not know was open.
• Buyers are more cautious, and lenders are scrutinizing these issues more closely.

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This trend is not entirely new, but it is becoming more common in recent years.

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What Exactly Is an Open Permit?

An open permit means the DOB has a record that work was started, such as electrical, plumbing, or renovation, but it was never closed with a final inspection or sign‑off. That permit stays tied to the property until it is officially completed.

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This matters because:

• Buyers and lenders can refuse to close until all permits are verified or resolved.
• Sellers may be responsible for clearing issues they did not cause.
• Title companies may delay issuing a clear title if unresolved permits are found.
• Insurance companies might decline coverage for work tied to an open permit.
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Older permits are more than paperwork; they are real obstacles in a transaction.

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Why Are Old Permits Suddenly a Problem?

There are a few reason why open permits keep surfacing:

1. COVID Disruptions
   During the pandemic, much construction was halted, paperwork was delayed, and city office functions were scaled back. Some renovations never received final inspections because inspectors were unavailable.
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2. NYC's Record-Keeping Transition
   The Department of Buildings moved from an old system to a new online platform called DOB Now. During that migration, some permit records did not transfer correctly. This means earlier searches might have missed open permits, only for them to resurface years later.
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3. Increased Scrutiny From Lenders and Buyers
   Buyers and their lenders are reviewing DOB histories more carefully. Open items that might once have been overlooked are now flagged before closing.

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What This Means for Buyers and Sellers

Open permits are an avoidable headache if caught early. Running a thorough DOB Now or BIS search as part of due diligence can save time, money, and stress. Agents and attorneys can sometimes negotiate solutions, like escrow credits or adjusted responsibilities, but it is always better to uncover these issues before the closing date.

If you are buying or selling in NYC in 2026 and beyond, open permits are not just paperwork. They are real obstacles that can delay or even derail deals. Being proactive is essential.

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Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.