Certificate of Occupancy - Need Advice

We're trying to get into contract on a house and so far it's been a complete pain in the a*!.

The newest thing is that they're saying if anything comes up during title search, as part of Certificate of Occupancy, we would be responsible instead of them.

Anyone have experience w/ this?

Part of me feels like we should walk but I don't know.

Re: Certificate of Occupancy - Need Advice

Re: Certificate of Occupancy - Need Advice

You can check as a matter of public record if they have C of Os for any add ons/renovations that require them. You can go to the town and look it up.

But I do think it's odd that they are making a blanket statement that if anything crops up, they are not responsible. It's common for sellers not to have COs for certain things (e.g., decks, sheds, bathrooms). They either get the COs themselves (often hiring an expeditor) OR disclose upfront that a specific item does not have COs and they are not getting them. If it's the latter, then the buyer can either let it go (but it may or may not be an issue for their lender, depending on what type of addition to the home is missing the CO) OR the buyer can decide to get the CO itself. If the lender has a problem with it, the item may need to come out (which is easier to do if it's exterior --such as a deck, shed, above ground pool, etc. -- but more of an issue if it's an interior additon that's integral to the house). But the specific issue is known upfront, so the buyer can make a decision about what to do.

Also, I always tell my buyers not to attach any value to something that has no CO. So if the house has 3 bathrooms, but the bathroom in the basement doesn't have a CO, I tell my buyers to value the house as a 2 bathroom house. I don't think you want to negotiate and agree on a price before you know whether there are CO issues.

The seller should know what does and what doesn't have a CO. And if they won't be upfront about that with you, then I'd be wary of buying the house. Who knows what else they are hiding and if they will operate in good faith throughout the whole process? It's one thing to refuse to get COs, but they should be upfront about whether or not there are CO issues at all and what the issues are, so you can make an informed decision before you go to contract and waste your time.

If you love the house and want to proceed regardless, I would talk to your attorney about putting contingencies in the contract that will allow you to walk away and get your down payment back if major issues crop up. CO issues can be simple and easy (if it's a matter of closing out an open permit), but many times take a long time to resolve (if you need a variance, for example) and are a significant expense (most people resort to using an expeditor and they aren't cheap).

Re: Certificate of Occupancy - Need Advice

Thanks for the advice - very much appreciated.

I talked to my broker - and she said from a previous deal that fell through they have the CO's needed for whatever was asked during title. Will have my lawyer review, but maybe we'll be ok if they have all the paperwork.

There were no additons to the house at all except for the awning which we knew about.

Re: Certificate of Occupancy - Need Advice

Update -- -we decided to walk. Blah!