Foreclosure in Miami Gardens>Question Details

Sarah, Both Buyer and Seller in North Miami, FL

What happens when buying REO property with code violations?

Asked by Sarah, North Miami, FL Wed Apr 28, 2010

Help the community by answering this question:


If you purchase the property cash you have no problems. If you want to finance the property with code violations, a Conventional loan may allows you to purchase and have some money in escrow for after the closing. May give you 30 days for convert the property back to original use.
FHA loan will not allows you to purchase a property unless the code violation is eliminated before closing. In this case the buyer would have to put the money up front before closing to do the work on the house.
0 votes Thank Flag Link Mon Aug 12, 2013
i bought property with a code violation and was told buy president of association it was takin care of. now i recieved notice of violation i year later and threatened with lien on property. im 71 yrs old do i need to worry about lien at my age no one to leave home to anyway?
0 votes Thank Flag Link Mon Jul 22, 2013
As an architect I deal with code violations everyday. Unfortunately when you buy the property you buy the code violations too , however, most of the fines can be negotiated down if you can prove that you are acting swiftly in resolving the issues... Such as hiring an architect or contractor and submitting for permits.
Orlando Lamas R.A.
0 votes Thank Flag Link Tue Jul 31, 2012
0 votes Thank Flag Link Wed Mar 9, 2011
REO's you buy as is with the understanding that you will take responsibility to make the property compliant.
0 votes Thank Flag Link Wed Mar 9, 2011
What (who) constitutes "Code violations" for this property?

If you are paying cash and your contract states "AS IS" ... the repairs are yours on your time frame 99.9999% of the time...

If you have a lender involved on an FHA Loan loan and the the contract states "AS IS" the repairs that are in violation of FHA guide lines are still yours (most of the time) but they must be fixed before closing w/o a repair addendum in order to fund or Close...

The Lender is in charge unless you are paying cash. The Bank really only has to provide you with a clear title!
0 votes Thank Flag Link Fri Feb 25, 2011
Hello Sarah

If the property is a violation of code, can not close, the bank must coreg rape the day before closing
0 votes Thank Flag Link Fri Feb 25, 2011

Ron and Debbie are correct about outstanding code violations as well. You need to check with the county and municipality to make sure there are no outstanding code violations such as exterior repairs, maybe broken windows, painting - the list goes on. (However, I have been successful in negotiating with the seller(s) to fix some of the code violdations as part of the accepted offer). In addition, in our state, I am finding more and more that once the new owner has closed, the city is usually agreeable to extend any dates and deadlines realizing of course that they need time to get settled. So buyer beware is a good rule of thumb here, and check with your individual municipality to see how that is handled. Title company may be of assistance as well.

Good luck,
Web Reference:
0 votes Thank Flag Link Thu Apr 29, 2010
When buying a property with code violations you inherit them. The bank will pay any accrued fees up to closing, however they are then yours to fix in whatever way you choose. You would be best served with a visitn to your code inforcement office. I know what happens in Port St. Lucie, however, I do not know how North Miami works.

Debbie Albert, PA
Coldwell Banker Residential
0 votes Thank Flag Link Thu Apr 29, 2010
Hi Sarah, the quick and short answer is "as is" means "as is". However, Linda makes very good points. But be prepared for a resounding stonewall by the seller. Obviously, if the defects prevent insurance or are enough to prevent the transfer, the seller has little choice. It never hurts to ask for the stars, and the old adage about squeaky wheels my play well. Best of luck! Jim
0 votes Thank Flag Link Thu Apr 29, 2010

I have had success with getting certain defects paid for by seller. If the defects fall under a category that prevents seller from selling to anyone in our state, they really have no choice. If a buyer has an inspection and finds defects as defined in the OTP, they will most likely not get it sold. A good example of this would fuses versus circuit breakers. There are very few, if any, insurance companies left that will provide hazard insurance unless this update is complete. Therefore, the home cannot be sold until this is completed. If the buyers refuse to do it - as they should in most cases - then the seller has no choice but to update.

Bottom line is "as is" doesn't always mean "as is" under certain extraordinary circumstances.

Web Reference:
0 votes Thank Flag Link Wed Apr 28, 2010
A thorough home inspection is a good way to identify code violations and protect your interests. Beyond this point the "AS IS" agreement leaves the responsibility in the hands of the new owner.

Buyer beware!
0 votes Thank Flag Link Wed Apr 28, 2010
You will probably have to take care of them on your dime. The bank is only required to provide clear title, but not repair the property. I have even heard of old violations popping up and the buyer having to pay unexpected liens a month or so after the deal closed because the recorder's office was behind and the paperwork didn't get filed.

So buyer beware. Do your homework, and check with title for any possible issues.

Heather Peck
SellState NRES
0 votes Thank Flag Link Wed Apr 28, 2010
In many cases the buyer may be responsible for paying for the repairs to bring the house upto code. Some areas, this will need to be done before you close. You will have to check with the bank to see who is going to be responsible for what.
0 votes Thank Flag Link Wed Apr 28, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer