Can someone explain CO's to me. (Freedom: mortgage, lender, house)

[jmax]

Saw a house over the weekend that had some renovations done to it sometime in the past 10 years. They made the living room bigger by extending it into the garage and enlarged a closet also cutting into the garage. The garage is now 1/2 the size. Should this raise any red flags? Is there a way to check that everything was done on the up and up with proper permits and CO's.

I've always been a little confused by this part while house hunting.

[superfly10]

If you have a buyer's agent, they should be checking with the seller and following up directly at your town hall to make sure all COs and permits are up to date with the house. This is a frequent problem.

Just because they did the work, doesn't mean it's to code or that it's legal 'livable" space. You may be pressured by agents to look past this problem "you're going to find this everywhere" etc... but all you're going to do is inherit the problem.

Looked at a house that the seller's bought 4-5 years ago. Liked it. Thing is, basement renovation (with extra full bath), outside deck, converted pool cabana (with bedroom and bathroom) were all done without permit and CO by the last sellers. What a nightmare.

[totallyfrazzled]

Go to the Building Department of whatever township the house is in, and ask what permits and COs are on record for that address.

You'll probably have to fill out a FOIL (Freedom of Information Law) form so it's better to go in person than to try to get the info by phone. I've never had any luck with getting that sort of info over the phone but I'm sure each office and/or clerk is different.

[jmax]

So any changes in the physical structure of a house requires permits and CO's, right? This also effects the taxes, right?

[totallyfrazzled]

Originally Posted by jmax

So any changes in the physical structure of a house requires permits and CO's, right? This also effects the taxes, right?

Pretty much, and yes.

In the case of the house you saw, the owner converted garage space square footage (which is taxed at a lowest rate) into additional living space square footage (which is taxed at the highest rate).

[atypicalLIer]

We opened up the wall between a room and a detached garage to create a great room. When I went for permits for a larger job, this showed up on the plans. I had to submit a set of plans (hand drawn as they were under a certain size) indicating what I had done. The garage conversion was then placed on the permit and I was charged an additional $150 for it on the permit.

I don't know if the process would have been so easy if I were looking for a CO in order to sell, as opposed to a permit to build an addition.

[jmax]

And when does this become an issue? The home inspector makes a note and informs the town? The bank won't give a mortgage until everything is in order? I'm really clueless on this. Thanks for the help.

[TomMoser]

It will become an issue when your lender picks up on it. This happens when they compare information from the appraisal to the title report.

[totallyfrazzled]

Originally Posted by jmax

And when does this become an issue? The home inspector makes a note and informs the town?

If by "home inspector" you mean whoever you hire to inspect a house after your written offer is accepted but before going to contract, then No that doesn't happen. A home inspector's job is to thoroughly examine the home's physical characteristics and give you a detailed report on their current condition; he (or she ) does NOT know or get involved whatsoever in whether any of those physical characteristics are legal or not.

Let's say a seller put in a deck without a getting permit or a CO/CC for it, and that the railings on the deck are less than 3 ft tall and the slats under the top railing are spaced 18" apart. The deck was also made of untreated wood and is about 25 years old and isn't in good shape overall. Your home inspector's report will say something like "wood decking is deteriorated, anticipate replacement within the next X number of years; railing height is lower than current code; baluster spacing is wider than current code." But the only person who will see that report is you (because you're the one paying for it!). Your inspector does not know or care whether there's a permit or CO for the deck; that's not his/her job.

[totallyfrazzled]

Originally Posted by TomMoser

It will become an issue when your lender picks up on it. This happens when they compare information from the appraisal to the title report.

They don't always catch everything though. The house my nephew just bought (with a mortgage) has a hot tub and also a large shed that aren't CO'd. It appears on the bank's appraisal although not on the Town's records, and even though the updated survey that the title company got clearly shows both items are physically there, neither the bank or the title company caught the discrepancy.