An open Department of Buildings (DOB) job or permit does not legally stop a New York City sale. No law prevents a deed from being signed or recorded because a renovation was never signed off. What stalls deals is the contract of sale, the buyer’s lender, and a buyer who does not want to inherit the paperwork. Who closes the job out, and whether money is held back at closing, is decided by the contract and the parties, not by statute.
This article covers the five boroughs. Westchester permits run through each city, town and village; see open permits and COs at a Westchester closing. For DOB violations, OATH/ECB penalties and HPD charges, see NYC property violations at closing.
What “open” means at DOB
DOB tracks work by job (the application, filed by a registered architect or engineer, or for some work by a licensed contractor) and by permit (the authorization issued to the contractor to do the work). A job can carry several permits, for example construction, plumbing and electrical.
A job is closed when every permit on it has been signed off. Before a Letter of Completion issues, DOB requires every permit to have been inspected and placed in signed-off status, and it makes the design professional and contractor responsible for obtaining the sign-offs for completed work (DOB, Letter of No Objection or Completion). The owner is “ultimately responsible for the project” and should confirm that the contractor requested and passed the final sign-off inspection (DOB owner checklist, 1- and 2-family).
What closes out the whole job depends on its type:
| Job type (BIS / DOB NOW) | Closes with |
|---|---|
| New Building | Certificate of Occupancy (CO) |
| Alt 1 / ALT-CO | New or amended CO; LOC if no CO change |
| Alt 2 or Alt 3 / Alteration | Letter of Completion (LOC) |
Source: DOB, Job types in DOB NOW. A Letter of Completion is issued for minor alterations that do not require a new or amended CO, once all permits are signed off. For older BIS jobs it is requested on a PW7 form through eSubmit; for DOB NOW jobs, through the job’s filing actions (DOB, LOC page). DOB will not process an LOC request with unpaid fees, open ECB or DOB violations, or missing inspection sign-offs (DOB, PW7 form).
In practice, “open permit” covers several different records:
- Permit issued, work done, never signed off. The most common problem. The contractor finished and left without the final inspection or paperwork.
- Permit expired. DOB NOW permits expire on the earliest of the contractor’s insurance expiration, license expiration, or one year from issuance (DOB, Permit Renewal). A permit also expires if work does not start within 12 months of issuance or is suspended or abandoned for 12 months (DOB, reinstatement fees notice, Jan. 2024). Expiration does not close the job; it means the job must be renewed or reinstated before it can be signed off.
- Job filed, work never done. An application or permit for a renovation that never happened still shows as open until it is withdrawn.
In BIS, the public job status shows codes such as “Permit-Entire” (permit issued for the whole job) and “Signed-Off” (DOB, job status codes). Anything short of signed off, on a job filed years ago, is what buyers’ attorneys flag.
Why old permits surface at closing
Open jobs from five, ten or twenty years earlier often turn up only when the property is sold. Several reasons stack up.
Two record systems. DOB’s Buildings Information System (BIS) holds permits and applications created before DOB NOW launched, along with filings made in eFiling or at a borough office. The DOB NOW Public Portal shows only DOB NOW filings (DOB, Find Building Data; DOB NOW Public Portal FAQs). Checking one system misses jobs in the other.
Old jobs being forced into DOB NOW. Effective August 23, 2025, DOB marked BIS electrical jobs that were never signed off as “Abandoned.” To be signed off, they must be reinstated in DOB NOW: Build with full filing fees (DOB service notice, July 31, 2025). Earlier, DOB stopped accepting amendments and renewals for BIS Limited Alteration Applications (LAAs, used for minor plumbing and similar work) and required new DOB NOW filings instead (DOB service notice, 2019).
Prior owners and contractors. The open job often predates the seller. The contractor or architect of record may be retired or unreachable.
Closer scrutiny. In January 2026, The Real Deal reported that open permits from past renovations were holding up NYC residential deals, often surfacing late in the sale through the title report. People interviewed suggested pandemic-era construction stoppages, more thorough lender review, and the BIS-to-DOB NOW transition as likely causes (The Real Deal, Jan. 24, 2026).
What the title report does and does not do
The DOB search in a NYC title report is a departmental search, returned for information. It is not insured, and an open permit is not a lien or a recorded title defect. The title company will not “clear” it or omit it; it simply reports it. The violations guide explains this in more detail. The consequence for an open permit: whether it must be resolved before closing is a contract and lender question.
Two caveats. First, an open job can travel with real money items: DOB civil penalties, unpaid DOB fees, or an OATH summons for work without a permit. Those are handled under the violations rules. Second, the departmental search shows only what is on file. Work done with no permit at all shows up only if DOB has already cited it.
Who cures: the contract decides
No statute assigns responsibility for closing out a seller’s old permit at sale. The contract does.
The widely used residential contract form prepared by the New York State Bar Association and the New York City Bar (Residential Contract of Sale, 2000) addresses this in two places (form copy via Justia):
- ¶10(a), governmental violations. The seller must comply with notices of violation and orders “noted or issued as of the date hereof” and convey the premises free of them. An open permit with no violation is not itself a violation, so this paragraph may not reach it.
- ¶16(b), conditions to closing. The buyer’s obligation is conditioned on the seller delivering a valid CO “or other required certificate of compliance, or evidence that none was required,” covering the buildings and other improvements.
Riders change this constantly. Buyers’ attorneys commonly add express representations that there are no open permits or applications and require the seller to close them out before closing. Sellers’ attorneys commonly limit the obligation with a dollar cap and a right to cancel and return the deposit if the cap is exceeded. A 2016 Queens decision shows how narrow such a cap can be: the rider required the seller to deliver a CO for all existing structures if the City required one. If the City first demanded an updated survey, the buyer had to supply it, and the seller could cancel if the cost of compliance exceeded $500. The court noted there was no evidence the City had required a survey, and the seller never cancelled (Echevarria v Shahar, 2016 NY Slip Op 32104(U)). The wording of the specific contract and rider controls.
Co-op and condo sales are different. The unit contract and the building’s alteration agreement usually govern, and the board or managing agent may require the seller to close out permits for apartment renovations as a condition of approving the sale. Check the building’s requirements early.
Escrow holdbacks
When a job cannot be signed off before closing, the parties sometimes close anyway and hold back part of the seller’s proceeds until DOB shows the job closed.
Who holds it. Usually one of the attorneys, in an attorney escrow account. A title company is more likely to hold funds tied to a title exception it is omitting; an open permit is not a title exception, so a title company may decline. See who does what at a New York closing on who holds money in New York.
How big. There is no rule. The amount is negotiated, usually from an expediter’s or architect’s estimate of the cost to reinstate, inspect and sign off the job, often with a margin for surprises such as opening a wall. Closing out an old job can mean new DOB filings, licensed trades certifying work they did not perform, and fees; The Real Deal cited one seller who spent about $25,000 after having to open a wall over an electrical permit.
What the agreement should say. The amount; who holds it; the release document (for example, a printout showing the job signed off, or the LOC or CO); a deadline; who does the work and pays for it; and what happens if the deadline passes, such as release to the buyer to finish the job. Without a deadline and fallback, a holdback can sit for a long time: one agent told The Real Deal the money in his deal was “just sitting there” because the permit was still open.
What lenders want
Lender requirements are not law, and they vary by lender and loan program. Many lenders’ closing instructions call for evidence that the property’s legal use matches the loan, and some will not fund over an open job or a missing CO, particularly where the open work changed the number of units or the layout.
Fannie Mae’s Selling Guide illustrates how the agency rules frame this. It requires appraisers to comment on additions made without a required permit and their effect on value (B4-1.3-05), and loans generally require a legal conforming or legal nonconforming use (B4-1.3-04). Its completion-escrow rules cover postponed improvements on new construction and renovation loans and do not address closing out a seller’s old permits (B4-1.2-05). Whether a lender accepts a seller’s holdback in place of a sign-off is a question to put to the lender before contract signing, not the week of closing.
Practical checklist
- Sellers: before listing, pull the BIS property profile and the DOB NOW Public Portal for every job filed at the address. Hire an expediter or architect to scope anything not signed off.
- Buyers’ attorneys: compare both systems against the CO and the actual layout; write a no-open-permits representation and a closeout obligation into the rider.
- Sellers’ attorneys: cap the closeout obligation and include a cancellation right; avoid representations about work you have not checked.
- Realtors: ask about renovations at listing, especially kitchens, baths, electrical work and combinations; for co-ops and condos, ask the managing agent about open alteration agreements.
- Everyone: tell the lender early about any open job, and put any holdback terms in writing.
Official sources
- DOB, Letter of No Objection or Completion: https://www.nyc.gov/site/buildings/property-or-business-owner/letter-of-no-objection-or-completion.page
- DOB, PW7 Letter of Completion Request form: https://www.nyc.gov/assets/buildings/pdf/pw7.pdf
- DOB, Job types in DOB NOW: https://www.nyc.gov/assets/buildings/pdf/job-types-in-dob-now.pdf
- DOB, Permit Renewal: https://www.nyc.gov/site/buildings/property-or-business-owner/permit-renewal.page
- DOB, Reinstatement fees service notice (Jan. 2024): https://www.nyc.gov/assets/buildings/pdf/reinstatement_fees-sn.pdf
- DOB, Permit type and job status codes: https://www.nyc.gov/site/buildings/industry/permit-type-and-job-status-codes.page
- DOB, Owner checklist, 1- and 2-family project completion: https://www.nyc.gov/assets/buildings/pdf/checklist_owner_1_2_family_completion.pdf
- DOB, Find Building Data: https://www.nyc.gov/site/buildings/dob/find-building-data.page
- DOB, DOB NOW Public Portal FAQs: https://www.nyc.gov/site/buildings/industry/dob-now-public-portal-faqs.page
- DOB, Abandoned BIS electrical jobs service notice (July 31, 2025): https://www.nyc.gov/assets/buildings/pdf/abandoned_eljobs-sn.pdf
- DOB, BIS LAA cutoff service notice (2019): https://www.nyc.gov/assets/buildings/pdf/dob_now_bis_cutoff_sn.pdf
- NYSBA / NYC Bar, Residential Contract of Sale (2000), form copy: https://forms.justia.com/new-york/statewide/real-estate/title/residential-contract-of-sale-2000-long-form-42326.html
- Echevarria v Shahar, 2016 NY Slip Op 32104(U) (Sup. Ct. Queens County): https://www.nycourts.gov/reporter/pdfs/2016/2016_32104.pdf
- Fannie Mae Selling Guide B4-1.3-04, B4-1.3-05, B4-1.2-05: https://selling-guide.fanniemae.com/