By Diane Saatchi
Adding one more chore to your spring-cleaning could save you thousands in the future.
To spare your wallet and your sanity, do yourself a favor during your annual spring cleaning and add one more item to the to-do list: Find or get a copy of the most recent certificate of occupancy (CO) or certificate of compliance (CC), and compare the description to what exists.
I know, I know — sounds like a pain. But a few minutes hunting down that certificate could save you tens of thousands of dollars and months of frustration in the future and maybe a deal.
And yes: You need to do this now, even if you are not thinking of selling or renting, and even if you think everything was done “by the book.”
Here’s why: Zoning and building codes change frequently, usually in the direction of more restrictive… meaning those seemingly small improvements you did over the years may cause huge and expensive problems when you sell or rent. You added an outdoor shower? Or maybe you moved the pool equipment behind a shed? By the time you’re ready to turn your home over to new hands, the codes could have changed, making those improvements more headaches than luxuries.
If the next people to occupy your home will be your children, know that they probably won't thank you for having everything in order. In fact, they may not even notice … but they will sure know if things are not in order. Someday, it will sell, and if the home doesn’t match the most recent certificate of occupancy, your heirs will be in for a headache (and potentially a series of sky-high bills) of their own.
If you plan to sell, the appeal of ironing out these details ahead of time should be obvious. Your property may be on the market for months, even years, but once there is a buyer, things move very quickly. The typical sequence of events is as follows:
- Parties agree upon price and terms, which typically includes agreement to close in 60-90 days.
- Attorneys negotiate contract. This usually takes about 2 weeks. The purchaser’s attorney will ask for an updated CO or CC. In some municipalities this is required upon transfer of title. A new survey must accompany an application to update a CO.
- Upon receipt of a fully executed contract, purchaser’s attorney orders a survey (this can take 4-6 weeks).
- Purchaser's attorney gives new survey to seller’s attorney, who applies for an updated CO. If no bumps, time from inspection to issuance can be 2-3 weeks.
Yikes! Eight weeks into the 60-90 period we expected before closing, we realize:
- A deer fence was constructed without a permit and is not exactly on the property line. Yes, a permit Is needed for an 8 foot high fence.
- Because extra bedrooms are common additions, homeowners often create them in the basement, its easy extra space. Sometimes there are rooms in the basement when you purchase, just add a closet and bring in some beds. Problem: Egress is not to code and sometimes you end up with more bedrooms than the Health Department permits for waste volume.
- Too much shade on the pool; landscaper removes some trees, adds lawn, irrigation and maybe brick to enlarge the patio. Problems: You may have over-cleared, over-covered or constructed too close to the property setback lines.
- A porch was enclosed. You now have more interior/heated space and could be over the permitted gross floor area. Back when that work was done, it may not have been over the limit, but it could be now. If that work was done without a permit, today’s rules apply.
- We often discover from a new survey that you or your neighbors may have taken some liberties with property boundaries. While a misplaced fence does not trigger an issue with the CO, it does present problems with title.
The efforts to get all up to code in just a few weeks will stress you and the purchaser.
On the purchaser side, a mortgage rate lock can expire and cost hundreds of dollars more each month for the life of the loan. If they are selling another property to buy yours, they may have to move out, find temporary housing, and store their furniture… and they may not want to be bothered.
About 100% of homeowners think they do not have to do this. And, about 90% of transactions encounter some kind of problem just before closing. In most cases, its because they did not think a permit was required for what was done or because someone thought the builder took care of it.
© 2017 Diane Saatchi