Forgot to answer this question for you. You asked previously:
Let's keep investment aside to keep things simple. what about simple buyer buying simple single family house. is there anybody or any service there to certify to him that the house he is buying is "legal " ? Why can't his agent or his home inspector do that job of verifying "legality" ? in fact i am surprised that it's not already a part of their responsibility by default !"
If you are buying a single family home, rarely do you need to verify it's a legal use. There is a deed and title search done before closing to verify that the sellers are legal owners and that the use is consistant with the sale. Of course, your agent can go to the town on your behalf and verify it's a"legal" use, but that would more likely be necessary if it's a two family in a predominantly single family area. We already discussed the issue of whether improvements had permits or not, and how to go about verifying that. Again, legal USE and legal "improvements" are two separate issues.
William, in a previous post explained the situation quite well regarding why neither Realtors nor Inspectors can verify legality, and why it's up to you and the people you are contracted with to verify any questions you have. Worth re-reading.
Realtors work most often in the background to coordinate a smooth closing, giving gentle reminders to their clients about deadlines, guide you through the next step in the process, but usually do not make formal contact with the mortgage reps, title company, appraisers, underwriters, utility companies etc. We are facilitators not attorneys.
In any case, I wish you good luck in what ever you chose to do, and hope this exchange has been helpful and inciteful.
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