Here is the story from Old House Journal:
Restoration in Violation?by Clare Martin
Nina Smith thought she was doing the right thing when she bought a 1914 Foursquare in Lakewood, Ohio, and carefully began stripping off its aluminum siding to restore the original clapboards underneath. So a few months into the project, she was understandably surprised when she received a notice from the local building department to maintain her siding. Despite attempts to cooperate with the authorities (while still taking the time to properly strip, repair, prime, and paint the original clapboards), Smith has found herself in the midst of a protracted court battle to fend of criminal charges of noncompliance levied by the building department.
Smith admits her case is somewhat extreme, provoked by a harassing neighbor and a building department with a less-than-stellar reputation. Still, it's not uncommon for DIY restorers to run up against local governments during the restoration process.
If you're restoring a property that's been vacant or is particularly derelict, check your city's property maintenance requirements to make sure those items - which can include things like peeling paint, sagging gutters, missing shingles, and rotting eaves - go to the top of your to-do list to avoid being dinged for a violation by a neighbor or building inspector.
Most homeowners know to check whether permits are required before beginning repairs, and to follow all regulations and approvals mandated by local historic preservation commissions. However, keep in mind that permits may require the work to be performed within a certain time limit, though extensions are often possible if you can show progress (though in Smith's case, her careful prep work has repeatedly been met with claims from the inspector that "prep work doesn't equal progress"). Many homeowners are able to get around time-limit restrictions for exterior work by completely restoring one side of a building at a time, but Smith points out this probably wouldn't have helped her.
"This all started when I only had siding removed from the front of the house," she says. "I honestly have no idea what I could have done to prevent this from happening." For more on Smith's story, visit 1914foursquare.com.