I hear this phrase a lot so I wanted to discuss some important items to review before you list your home for sale. This month, and next, I am covering THREE of the biggest issues I often face when representing sellers.
This month is all about the importance of a Certificate of Occupancy or Certificate of Compliance, often referred to as a “CO” (this is what it is known as in New York – if you are in a different state, it could be known as something different but it’s the same concept.) Next month, I will discuss wandering lot lines and old mortgages – exciting stuff!
I often hear from my sellers that the structure in question was there when they bought the house (a shed, deck, garage, above ground pool, addition, finished basement, garage conversion, etc.) Just because it was there when you bought it, doesn’t mean it’s legal or up to code. If you are considering selling your home, I highly recommend you go to the Town or Village and get a copy of the CO’s from the building department. Determine whether there are any open permits, which basically means plans were filed, but the permit was never closed out with a final inspection by the Town and a CO never issued. Get copies of these for your files.
When you sell your home, your purchaser is going to want to make sure your house is “legal” – meaning it has all its CO’s. At a minimum, you will have to produce a CO for the house as a one-family dwelling.
So what happens if you have an open permit or a structure that needs a CO but doesn’t have one?
If this is your situation, let me know BEFORE we draft the contract. Let your real estate agent know BEFORE you list the home. This way, we can prepare to let the prospective buyers know. If you decide not to get the CO, the purchaser has to know before they make an offer on the house. It could affect the purchase price or the mortgageability. If there is an open permit for an addition or a garage, some banks will not close until the permit is closed out and a CO is issued.
After you check with the Town, the next step is to consult with an expeditor. An expeditor is a person who will help you complete and submit the permit application and paperwork and deal with the Building Department and inspections, etc. I work with several really good ones.
A good expeditor will know the building code and processes set forth by your individual Town (note: each Town’s processes are a little different.) The expeditor will come out and inspect your property to see what needs to be done and file the permit application accordingly. The application will need a survey and plans (drawings showing the improvement.)
If it is something like a shed, it is relatively simple. If you need to legalize an addition with plumbing and electrical, you will need underwriters certificates and plumbing inspections/certificates. AND, (not to scare you) if the structure is too close to your lot line than what the Town or Village allows, you may need to apply for a variance before you can get the permit. It is up to the Municipality whether the structure is allowed.
If there is an open permit that has expired, or no permit, a permit application will have to be filed and a fee will need to be paid. If the structure is existing without a permit, you may be assessed a penalty in the way of an increased permit fee. Then a Town or Village building inspector will come out to inspect the structure.
Remember, the title report shows everything. If you think something won’t come up at closing, it probably will. Do the work, get the structure/addition reinspected and you are all set to list your home.
On a personal note, I am deeply saddened by the loss of the amazing Ruth Bader Ginsburg a/k/a the Notorious RBG. I was a lawyer by the time she became part of the Supreme Court and I looked up to both her and Sandra Day O’Connor.
RBG was a powerhouse and I am upset I will never meet her. I was actually going to have the chance in May to meet her when I was supposed to be admitted to practice before the US Supreme Court. I was even planning on what I would say to her, trying not to go all “fan girl” on her – but unfortunately, due to COVID-19, that event was cancelled. We just never know what tomorrow holds.
“Though she be but little, she is fierce.” – Shakespeare