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Looks like a CO has NOT been located for a property we are closing on next week. The house was built in 1900 and there could be an issue that the entire second floor is an addition.
1) What does this mean? Can the deal fall through? Will us, as buyers, lose money?
Most, if not all, towns have 'expeditors' who's job it is to expedite the CO for homes. Usually the sellers pay this cost, as they were required to have the CO for the house in the first place. It can be a couple of grand though, and may delay your closing until it's complete. The Expeditor can give a time estimate of how long it will take in your town. Be aware though, that if there was no CO for the second story and it doesn't 'exist' as far as the town knows, once there is a CO for it, your home's value will increase in the eyes of the tax assessor and the taxes may go up.
Since the sellers are the ones with the issue, they should be the ones to take steps to fix it. You shouldn't be in a position to lose money if your contract was written well. Please clarify this with your attorney and the details of your particular contract though for your own piece of mind. My thought would be if the seller can't sell you the house, they are in breach of contract and any down payment should be returned to you.
You didn't say where the home is located, but if it was built in 1900, it probably pre-dates town code. If this is the case, you will not be receiving a CO, but instead a "Letter in Lieu of Certificate of Occupancy" (as it is called in Huntington) or a "Certificate of Existing Use" (as it is called is Smithtown). These are easier to get then a CO as you just have to show that the house is habitable and that it was existing as it is now, before the town code went into effect, as opposed to being up to today's code).
It is absolutely the seller's responsibility to get this done.
COs in this town were required after 1942. Nassau County has a Property Card on file from 1938 showing that the floor exists - which should put me in the clear.
If the seller doesn't get a "Letter in Lieu of Certificate of Occupancy" - how much will this potentially cost me down the road if I need to obtain it when I sell?
COs in this town were required after 1942. Nassau County has a Property Card on file from 1938 showing that the floor exists - which should put me in the clear.
If the seller doesn't get a "Letter in Lieu of Certificate of Occupancy" - how much will this potentially cost me down the road if I need to obtain it when I sell?
I would want around $20,000 in escrow until they get the letter.
certain banks are okay with no COs. wells fargo, and actually citibank sometimes.. a private lendor. i have a good one.
As we have all learned over the past few years, just because a bank will allow something does not mean that the buyer should accept it. Remember, if you buy the house with no c/o it is your problem, not the banks. I'm not saying don't do it, just procede very carefully. Make sure that if you close that there is plenty of money in escrow.
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