Sellers do not want to get permits and COs??

After being in contract. Has anyone ever been in this situation?


When we first looked at the home, before even putting in an offer, we asked the agents, if the home had an updated CO and if everything was legal (bc we had a nightmare with permits with the first home we bought) We were assured everything was up to date. We sign contracts and NOW that we ordered the title and survery, we found out NOTHING (2 sheds, deck, finished basement, CAC, bathroom in basement etc) has the proper permits. The seller won't budge, he pretty much told us, you can get them, or you can not have the house, he doesn't care. Problem is we are already in contract, with that house and OURS.

Do we have any recourse? If we walk away from this house, we will lose the buyer for ours, and that will be a disaster!!

Re: Sellers do not want to get permits and COs??

# 1:I'd confirm that the title search is correct. Make sure it really discovered there was no C/O for those structures for the property you want to buy.

#2 - what does your real estate attorney say? He/she really would be the best source for answering this (disclaimer: I am not a RE atty but just going by what I know others have told me in the past worked for them). You need to find out --- a) Will your bank refuse to close with outstanding c/o issues? b) will the title company hold up closing because of this?

# 3- ideally the realtor *should* have done her homework and verified that this property lacked C/O. A good real estate agent would have taken this extra step, IMHO. This is the seller's problem, not yours. Review your contract again. Is there any contingency in the contract that allows you to get out because of this c/o issue?

Seller should be the one ensuring the c/o's are all proper to find a buyer, but as a buyer I would demand (1) the seller assume responsibility for getting those permits and if no, then you really SHOULD WALK away, and (2) if you really CAN'T walk away - then you should amend the contract that increases the seller's escrow to account for the additional funds you will now have to incur to go thrrough the process of procuring those C/O's after closing. I am sure some of the RE brokers/attys on LIF will have some good advice for this one which I may have not mentioned here.

(sorry for typos, I am typing through my phone).

Message edited 3/20/2013 8:42:40 AM.

Re: Sellers do not want to get permits and COs??

We had a similar nightmare. The seller's realtor told us they had all COs and turned out they had none - for an enclosed front porch, rear porch, and they needed a variance for the CAC unit. It took forever to actually close. They hired an expediter to get the paperwork in order, but they basically didn't expedite anything. We ended up getting the variance for the CAC; our lawyer met with the town at the house and determined that the front enclosed porch was fine based on measuring some beams (I don't know wtf this was about) and they ended up taking down the rear porch, which now in its current state looks like a stage with a roof over it hanging off the back of our house. Weird. It was our choice though, it would have taken months longer to wait for another CO for the enclosed porch. It was particularly annoying because they had the laundry machines in the enclosed porch, which was a real selling point, but they ended up moving them to the basement and they gave us $12,500 at closing to compensate for the loss of living space. Now we are in the process of putting up a railing and making it an open back porch.

I feel your pain though. Our seller was an 85 year old widow and probably didn't even know she didn't have the proper permits for any of these things.

I would think, in your situation, you could walk and get your depo back since the bank won't give you the loan unless you have the proper COs. That was the case for us.

Re: Sellers do not want to get permits and COs??

we're in the same predicament. They were however upfront and told us their poolhouse didnt have a CO - but we just found out the shed doesn't either, and the pool and sprinklers don't work, as we sign the contract. Such a pain. Sorry no advice. I feel your pain!! Good luck

Re: Sellers do not want to get permits and COs??

The agent is a douche. (MY mistake #1)

The lawyer is his guy. (MY mistake #2) and is trying to go back to seller and ask for $ off home.

The bank Will close but we are unsure what kind of problems this will create for us in the future, we are essentially BUYING their problems. If its going to cost us thousands and thousands for an architect, plumber, plans and permits (basement, deck, sheds) than its not worth it.


Another issue is, even if he or we get the permits, how much will this raise our taxes. THey are already 13k!!! and we were not aware when bidding on the home (and budgeting for this place) that it might go up 2/3k! For that we could get a totally different home !!

Re: Sellers do not want to get permits and COs??

Re: Sellers do not want to get permits and COs??

We went through the same thing... sellers did not have a CO for the pool, so they took it down. Well, then apparently having a 6 foot fence on the property was illegal... so our closing was dragged out longer... we went into contract early March, had a stipulation in our contract to close by the end of June (at the time when the first time home buyer tax credit was due to expire) and we ended up closing with the CO on the fence still open, but our lawyer put in the paperwork that the sellers still had to secure a CO for the fence by October or they owed us the cost of putting up a new, legal fence (which we priced out to be about 6k), so they held that money in escrow.... maybe something like this could be a possibility? Otherwise is there any place you could stay in the meantime while waiting it out, or if you walk away? I had to stay with my parents for about 2 weeks waiting to close...

good luck!! i know how frustrating it can be.

Re: Sellers do not want to get permits and COs??

those are all very common things to not have c/os for

I think almost every house on LI is missing a c/o for 1 or more of those items- sheds and decks being the most common

if the bank will close- you need to decide if it's ok with you-

things missing c/o that I would run from

in ground pool

dormer

additons

garage being added- dettached

a conversion (some banks will close with out a c/o for the conversion- but I would want a c/o if it was a room now)

the CAC (this varies by town) and the deck should have a c/o- but the issue is- once you get a c/o for 1 thing- the town is going to want you to get c/os for everything....huge can of worms and red tape

Message edited 3/20/2013 10:55:51 AM.

Sellers do not want to get permits and COs??

I agree with previous posters, hindsight is 20/20 but your agent should have done his or her homework. I never show a buyer a home without first pulling the tax record and site history for a home, even for the first showing. It takes 5 minutes and can save so much headache.

Do you know anything about the sellers plans after they sell the home you are buying? Do they have a home they are buying? If they do, you walking out will ruin their plans too, not just yours. Were there multiple offers on the home when you won it?

The one that really stands out to me as a problem is the basement. Decks and sheds are not such a big deal. Worst case scenario, you tear them down. CAC, kinda a pain, but not necessarily a big dael. Finished basements WITH plumbing, I'm surprised your bank is willing to close over that. Depending on the set up and the town rules, you could be looking at having to dig out larger windows, opening up walls, getting variances etc.

You say it will be a disaster if you lose your buyer. How long were you on the market when you got an offer? If it were me, I would do one of three things: 1) walk, just not worth it. If they didn't do this correctly, what else did they half a**? 2) Open up the deal for renegotiation. When you agreed on the price, you were pricing as if it had a finished basement and CAC and a deck. Without the CO for those things, you are looking at some money to get everything squared away, and until that's done, may as well treat it like the home doesn't have those features or 3) hold firm, require the CO prior to close (if push came to shove I might even offer to pay for half the cost of the expeditor, but any cures required would be 100% their problem), go back to your buyers and beg them to be patient.

I don't know why the seller is trying to bully you or why your agent is letting them (unless there is more to the story I don't know). It's not like you are the only buyer that will have a problem with these issues. They will have to get cured one way or another. And now, that it has come to light, the listing agent is obligated to tell any and all buyers from this point forward about the CO issues, because most would consider that to be a material fact.

Re: Sellers do not want to get permits and COs??

We had the same issue. No CO for the deck, central AC, an extension

We closed and did the footwork ourselves, but the seller paid us for the trouble and kept a large amount in escrow. Your seller does not sound reasonable, maybe you should consider walking away

Re: Sellers do not want to get permits and COs??

finished basements with bathrooms are not ever a problem for lenders

stoves in kitchens in the basement are the main issue- I have yet to come across a lender that will close with a illegal stove

now if the town comes to start looking at other things that need c/o- and they see a bathroom it can be an issue depending on the town- some towns don't require a c/o if there isn't a tub

the 4 items I mentioned as issues came directly Asaf German a very respected real estate attorney -

Re: Sellers do not want to get permits and COs??