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I'm in NYS. A buyer was in contract for a home purchase. Contracts specified that COs were to be presented. However, the COs that were presented do not correspond 100% with the actual floor plan, square footage, and usage of space. A two story accessory apartment is only CO'd as a one story apartment, the L shape pool has a CO, however, the town only has it as a 12x20. According to the COs, the home measures 4,200 sq ft. According to the appraisal and insurance companies, as well as seller's agent, it is actually 4,500 sq ft. The home, however, is only being taxed for 3,200 sq ft despite having the COs on file.
How did this home pass title and get to a closing table? The buyers only found out about the discrepancy in taxes/sq footage the morning of the closing.
Now seller wants to keep down payment. What are the buyer's rights?
Please ask me for more specifics if my post is confusing. Thanks.
Last edited by DisneyMcFamily; 10-22-2015 at 08:41 PM..
Yes, a deposit given at contract signing. Nope, the CO's were presented by the seller, AND same COs on file for said property with the town.. The only thing I can think is that the homeowner had a connection with the building department, and that they were never taxed for the additions.
Tax assessors don't always have the correct or most up to date information and even when they do they often do their job wrong. People don't question it often enough. I don't think this is the sellers or the title companies fault. So, if I understand this right, the buyer wants to cancel because the property taxes are going to be higher than they thought?
Carbon monoxide. In this case, though, it probably stands for Certificate of Occupancy.
Sorry. Yes, certificate of occupancy.
Yes, once tax department catches the error, the taxes will go up approx. $3-4k annually. That's a conservative estimate.
I would think that if seller's CO's sq ft doesn't match up with actual sq footage that may be an argument to make? What about the seller applying for a one story accessory apartment CO and actually having a two story apartment? Buyer is trying to settle this without litigation, because it'll cost about the same in legal fees as his original earnest money deposit.
I don't mean this in a negative nor accusatory way, but how did the square footage discrepancy remain unnoticed for so long by anyone on the buyer's side of the transaction, that it didn't bonk someone on the head way before the closing table? Or if it had been noticed why it was still an issue when all sat down at the table?
In all the purchase/sale transactions we've had, two pieces of paper we had in hand early on was the tax bill and city's property appraisal. There was always a big whoop-dee-doo to verify that the square footage of heated space was correct per the seller's disclosures (to make sure the seller hadn't upped the size by including the garage or basement or whatever).
I'm guessing that in the OP scenario the buyer must have walked away from the table and didn't close the deal and is demanding the deposit back. Whoever gets that deposit would depend on how the discrepancy is legally viewed - was the seller untruthful on purpose or was the buyer not thorough and it's caveat emptor. And that of course is the question being asked.
Disney, I'm getting a little confused. Are you the buyer or the seller?
Also, I understand in NY...C, at least...there is a big attorney presence, writing the contract etc. Is that the case where you are? Can you not consult him/her?
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