CO and closing

We are scheduled to close on a new house in a week but are missing co's for the bathroom in the basement
Can you/should you close without a co? The sellers claimed to have hired an expediter but we are still waiting. Any day we go past 1/15 will cost is money (about $900 for a 15 day delay) bc our mortgage rate expires
We don't really want to spend $900 for 15 days but we don't think it's smart to close without it
We are also concerned that it takes longer then 15 days which will just make us pay more and more
Wwyd?

Message edited 1/2/2014 10:01:04 PM.

CO and closing

I would personally NOT close without a c/o if that's an option. We did because we had specific language in the contract that it was the seller's responsibility to see that this was executed and that it was their financial responsibility -- boy I wish we had waited until the c/o was processed. There are issues that came up (an in-ground pool was removed and the previous owners never notified the town so the property still shows a pool which no longer exists) and despite the language in our contract, we are still having to deal with our real estate lawyer because the seller's attorney is NOT releasing the necessary funds from escrow. We've gotten 2 violation notices and the most recent one said that if it the necessary money wasn't paid, that a court summons would be issues in my husband and I's name since we are the official owners and our names are on the deed. The town doesn't care whose responsibility it is -- they want it paid. DH and I refuse to pay the money, as it is NOT our responsibility. It sucks, but if I need to appear in court, I will and hopefully a judge will force the seller to release the money from escrow as them not doing so is a clear violation of the closing documents all parties signed. Long story short. This could have been avoided if we had waited to close until the c/o was issued.

Re: CO and closing

Personally, if it's just a C/O for a basement bathroom, I think it's not that big of a deal. If it was something major, like an extension to the house or a dormer or something, I would be more cautious. But most people don't have C/Os for basement bathrooms, and a lot of times, the seller doesn't even agree to get it and the buyer just takes it "as is."

If the seller agreed to get it and hired an expeditor, then that's great.

It can be expensive to get C/Os. I know you say they "claimed" to have hired an expeditor, but can't your agent or attorney get the expeditor's name and follow up? Or at least get an update from the seller's attorney? It can take awhile to actually get the C/Os - it's faster if there's an open permit. It also depends on the town. Town of Oyster Bay has been very slow lately in providing info on C/Os and permits, let alone granting them.

You CAN close without a C/O if your lender is ok with it. Most lenders would be ok with closing without a C/O for a basement bathroom, especially if the seller is getting it. You can close with the seller leaving money in escrow to ensure the seller still has incentive to follow through with getting the C/O post closing. A lot of my clients have done this lately in order to get a more favorable rate or close within the timeframe of a rate lock.

Keep in mind, though, that even with simple C/O issues, once the town comes in to inspect for that issue, they can find other violations that need to be rectified. Town of North Hempstead is notorious for opening up a can of worms when they come to look at one thing. So that can obviously add up... you want to make sure that there is an agreement to protect you against this (an agreement that the seller will be responsible for rectifying any further violations that come to light in the process of getting a C/O for the basement bath).

I recently had a house sale where the inspector came to close out a violation re: a porch and a gas line, and while there, wrote up new violations for a sink in the garage and for lack of steps leading from house into garage. So these types of things can come up, and it took a couple of more months to get everything taken care of and resolved. But even though we closed in the interim, it was still the seller's responsibility to pay the plumber to remove the sink and arrange for the inspections. You don't want to inherit problems and expenses because you closed before the C/O was obtained.

Re: CO and closing

Message edited 1/3/2014 8:24:14 AM.

Re: CO and closing

Re: CO and closing

There's no website. You (or your attorney) could speak to someone at the building department.

But usually C/O issues and building violations first crop up when your attorney orders the title report. The title company looks into these things.

If there are outstanding C/O issues to be rectified, your attorney will usually verify that everything was taken care of and that no other issues cropped up when the town inspector came in.

When I had the recent issue of the building inspector coming in and finding more violations, the attorneys had to consult with each other and the bank attorney as well, to see if the bank would allow a closing with money in escrow. Then once issues were resolved post-closing, the buyer's attorney had contact with the town inspector to ensure that all of the violations were in fact cleared (even after seller's attorney represented they were), and then money was released from escrow.

So if you have concerns about resolving C/O issues, I would really recommend consulting with your attorney. I think a basement bathroom isn't a big deal, and many times sales just close without the C/O being obtained (again, to avoid opening the can of worms of the town coming in to inspect the property). No one's house, unless it's new construction, is entirely up to current code. And a lot of times, how it goes depends not just on what town you are in, but which inspector you get!

But your attorney can best advise how to protect you in all scenarios!

CO and closing

Thanks Christine
My husband informed me its the basement bathroom and deck c/o's we are waiting for. When we had the house inspected before singing the contracts the inspector told us that the deck is not up to code. The sellers said it was and that they have the co.
We are also in no rush to close - we can't get out of our lease until May - we agreed to the sellers close date because we wanted the house
But I think waiting a few more weeks doesn't hurt us. And if there are other violations they would have to fix them or we could deduct money. We will speak with our lawyers Monday

Thanks all

Message edited 1/5/2014 2:43:03 PM.

Re: CO and closing

Re: CO and closing

I would insist that the sellers leave a certain amount in escrow for say 90 days or something and close. Ask your attorney.