Buying House with Open CAC CO (TONH) (credit, lenders)

[awaken470]

Hi everyone,

We are under contract set to close very soon on a house in TONH and the co search indicated that there is a open permit for the cac that the seller filed 2 weeks ago 8/13.

When we inquired, the explanation was that the seller was in the process of obtaining the co for the cac since March, but due to covid the buildings department was closed/delayed.

The seller has provided us with a invoice of the electrical work that was completed and also provided us a Certificate of Compliance from a electrical inspector which was done 8/24.

The seller has agreed to sign a letter of undertaking to complete the permit however does not want to put money in escrow because we had already made them credit us 10k due to low appraisal.

In your opinion do you think there is much requirements remaining to obtain the co after getting the certificate from the electrical inspector? Is the electrical inspector certification the final step before having the co for the cac closed out?

I know cac may have variance issues, but this would have been pointed out already at this point since the electrical certification was issued?

Thank you so much for your help.

[Uggggs]

They might also check to see if your ducts are up to code - insulation. If not, they might make you re insulate areas that are visible. They were really tight on checking for those items unless yours is just the unit itself? And they only are checking for electrical panel, wiring, cutoff by the unit?

My inspector came back because they wanted to see sealant between the holes the contractor drilled out for plumbing and electric wires. It was literally, 10 different spots that needed sealant and then they could close the walls.

[twingles]

The electrical certification has nothing to do with a variance. It’s not the inspectors job to address that. If the town requires a variance that is the next step. And that will take awhile.

It’s really up to the bank if they will close with an open CO.

[awaken470]

Originally Posted by twingles

The electrical certification has nothing to do with a variance. It’s not the inspectors job to address that. If the town requires a variance that is the next step. And that will take awhile.

It’s really up to the bank if they will close with an open CO.

The bank isn’t even batting an eye at the open permit and is allowing us to close.

The seller’s intention was to have the unit legalized for the new owner of the house (he had the unit installed in the late 1990s when a CO was not required), but due to covid it was delayed. He has already paid ~$1500 to apply for the permit and have electrical work done, so I do believe he would follow through and close the permit after closing.

My attorney advised that the only recourse I would have should the seller not close the CO is to sue them for violating the undertaking which would obviously be legal fees on my end as well.

[94nasupra]

I thought in contracts it says seller must provide all valid co’s. So you should have money in escrow for it I would think. In my standard contract it was was section 16 sub b. Seller must provide co and one for all over improvements if applicable.

[nuts2uiam]

Originally Posted by awaken470

The bank isn’t even batting an eye at the open permit and is allowing us to close.

The seller’s intention was to have the unit legalized for the new owner of the house (he had the unit installed in the late 1990s when a CO was not required), but due to covid it was delayed. He has already paid ~$1500 to apply for the permit and have electrical work done, so I do believe he would follow through and close the permit after closing.

My attorney advised that the only recourse I would have should the seller not close the CO is to sue them for violating the undertaking which would obviously be legal fees on my end as well.

If the electrical has been done and passed that is huge especially since it was an earlier install. Just so you know, a permit has always been a requirement. The difference is that the lenders were not diligent in requiring people to get a CO even with a sale. I had such a case in 1997 and closed with a/c in place, ditto for an extension done in 1998 with no question and a survey with it noted inch case.

[twingles]

I would not close without money in escrow for the final CO. Once you close you have NO other recourse against them. If you need a variance YOU'RE the one who is going to have to jump through hoops to get it and that includes going to all your new neighbors asking for them to sign off on it. If you don't need a variance it's not such a big deal.

And yes, permits were always required for this.