{"id":905892,"date":"2026-07-14T15:47:22","date_gmt":"2026-07-14T21:47:22","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905892"},"modified":"2026-07-14T15:47:31","modified_gmt":"2026-07-14T21:47:31","slug":"building-permit-excuse-doesnt-cut-it","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/building-permit-excuse-doesnt-cut-it\/","title":{"rendered":"We Won\u2019t Permit That Excuse!"},"content":{"rendered":"\n

Curt Martin and Richard Eiszner | ConsensusDocs<\/a><\/p>\n\n\n\n

A Texas appellate court recently ruled that a building permit<\/a> wasn\u2019t a condition precedent for a construction project. That caught our attention. Can you build a commercial project without a permit?<\/p>\n\n\n\n

But as we read the case, we see the court\u2019s reasoning. And it reminds us of an important legal principle that should inform our contract drafting and negotiation.<\/p>\n\n\n\n

The case was a civil suit brought by the project owner against its tenant improvement contractor for work on a medical spa. The owner claimed that the contractor didn\u2019t perform the work properly and didn\u2019t finish construction. The contractor argued that delays and problems were caused by the owner, alleging numerous failures, including the owner\u2019s failure to secure a building permit.<\/p>\n\n\n\n

The case may be an outlier. The appellate opinion may have been influenced by the trial court\u2019s finding that the contractor breached the contract, demanded extracontractual payments, and failed to register as a contractor with the city, thereby preventing the owner from getting the permit. My Place Servs. LLC v. Newman & Co. MSO, LLC<\/em>, No. 03-23-00391-CV, 2025 WL 1711448 (Tex. App\u2014Austin June 19, 2025).<\/p>\n\n\n\n

But what caught our eye was the finding that the building permit procurement wasn\u2019t a condition precedent to construction. From our practical perspective, it seems that a building permit is required for construction to begin or proceed. We pursued that theory in a recent case where we obtained damages for a contractor client whose nine-month project was delayed by the owner\u2019s 18-month dithering about how to solve sanitary sewer routing to satisfy the city\u2019s building permit requirements.<\/p>\n\n\n\n

But our client\u2019s circumstances differed from the medical spa project contract. In our case there was no question that building authorities stopped the construction, which could not resume until the permits were in place. In the medical spa project, construction somehow continued without the building permit. The appellate court dismissed the owner\u2019s permitting defense. And the court cited no evidence that the lack of permitting led to delays or extra costs.<\/p>\n\n\n\n

Although the opinion looked at first like a quirky decision, it reminds us of an important legal distinction. The court explains the difference between a \u201ccondition precedent\u201d and a contractual promise. A promise is an unconditional commitment. Simple examples might include a builder\u2019s promise to complete the project per plans and specifications or a substantial completion deadline. These promises are enforceable, and their breach subjects the promising contractor to damages.<\/p>\n\n\n\n

A condition precedent, however, serves a gatekeeping function. Until the condition is met, a performing party\u2019s promise is not binding and carries no duty. When Popeye\u2019s friend Wimpy promised that he would \u201cgladly pay you Tuesday for a hamburger today,\u201d we wondered whether Wimpy really planned to pay up. But for our purposes, let\u2019s turn it around. Would Wimpy have to pay if you didn\u2019t provide the burger? You would be foolish to demand payment. In legal terms, a court might conclude that providing the hamburger was a condition precedent to payment so that your failure to provide the burger excused the promise of payment.<\/p>\n\n\n\n

But putting aside the comics, a condition precedent has to be plainly worded as such. Clear contractual language must be used to show the parties\u2019 intent to show that the commitment is more than a mere promise. And in the world of construction, we see conditions precedent sprinkled throughout contracts. They may say that giving notice of a claim is a condition precedent to recovery of additional time or money, or that providing lien releases, as-builts, and other closeout documents are conditions precedent to final payment.<\/p>\n\n\n\n

A condition precedent can create a harsh result. Could a contractor really lose its right to pursue a claim because notice wasn\u2019t given or provided in a certain way? A court\u2019s (or arbitrator\u2019s) analysis thus seeks the parties\u2019 intent \u2013 did they intend the obligation as a promise or a condition precedent?<\/p>\n\n\n\n

In the appellate court\u2019s reasoning, the permit was not a condition precedent. The court said that \u201c[i]n construing a contract, finding a condition precedent to liability is to be avoided when another reasonable reading of the contract is possible.\u201d The court quoted earlier precedent saying that \u201cbecause of their harshness in operation, conditions are not favorites of the law.\u201d  Courts are reluctant to interpret ambiguous contract provisions as conditions precedent because doing so can unfairly let one party avoid responsibility even after the other party has done meaningful work or made reasonable efforts to do so.<\/p>\n\n\n\n

In considering the facts, the case noted that the contract language simply said that the owner \u201cshall obtain necessary building permits.\u201d The contract didn\u2019t include any language indicating that permit acquisition had to occur to trigger the contractor\u2019s obligation to proceed.<\/p>\n\n\n\n

The parties must express their intent that the condition would trigger the builder\u2019s obligation. The court explained that the parties wouldn\u2019t have to use the term \u201ccondition precedent\u201d to show the permit was needed to trigger the builder\u2019s obligation. \u201cGenerally, words such as \u2018if,\u2019 \u2018provided that,\u2019 \u2018on condition that,\u2019 or other conditional language indicate that the parties intended the act or event to be a condition precedent.\u201d<\/p>\n\n\n\n

We\u2019re not convinced that this opinion is a hall pass allowing owners to avoid obtaining building permits. But it does remind us that contracts should clearly express the intent of the parties with respect to any obligations that are required for starting or progressing a project.<\/p>\n\n\n\n

Consider access to the site. In past years we have seen contracts that didn\u2019t specify owner responsibility to provide access to the project, let alone make it a condition precedent. Contractors were sometimes forced to court, making the argument that the owner\u2019s failure to provide access was a breach of an implied covenant to allow entry to perform the work. A careful contractor might be well advised to specify in a contract that it needs entry to the property to build the work \u2013 that access is a condition precedent to commencing and continuing the work.<\/p>\n\n\n\n

Consider other practical prerequisites that might be taken for granted:<\/p>\n\n\n\n