When should the seller furnish the Certificate of Occupancy to the buyer?

Asked by Iulian Ionescu, Clifton, NJ Thu Dec 18, 2008

We have the following situation: the seller made obvious improvements to the house, but we have yet to receive any proof that these improvements were made to code. The seller insists that we perform the home inspection and obtain a mortgage commitment before they provide us a certificate of occupancy from the city. This seems counter-intuitive to me because I would expect a CO prior to jumping through hoops to obtaining a mortgage commitment and performing a home inspection at our expense. We already know that there are some improvements for which permits cannot be obtained and will need to be remedied by seller. So this makes us question all other improvements. So, the question is: is it reasonable for us to request a CO prior to the completion of attorney review?

Thank you,


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William Leigh…, , New Jersey
Thu Dec 18, 2008
iulian: A deal is a deal. A bad deal is a bad deal. The seller, refusing to present his bonifides, is signaling "trouble with me down the road. If the house is perfect and the deal wonderful, you may want to do it the seller's way. Otherwise, the seller will soon enough realize that he has to clear up the shadow of inappropriate work before he can sell it to anyone. If you check with the town's building department (NOT the tax department,) they should have records of the permits issued and final inspection and approval. If everything is hunky-dory, the new CO can wait until you have gotten your act together. However, if you have a pre-approval and can document source of other funds, the only missing piece is really the house appraising for the amount of the contract price. If it doesn't, it's a bigger problem for the seller because he can't sell it for the amount of the deal to anyone.

If it were me, I'd check with the town. Any monkey business that shows up with work done without permits would be a signal that it's time to walk. The seller is too slippery to trust, is already trying to con you into getting involved and you can't see everything that he has done or will do before closing.

On the other hand, except for the fact that some towns want a contract in place before they will inspect, you can contract for the CO to be complete whenever you want it completed. In some towns, they will do an inspection that is good for six months and will do it without a contract in place. Even if they ask for a contract in place, sometimes they don't ask to see it, they just ask for the name of the buyer. I'm sure that some deals fall through (I've only had one) at the last hour at the closing table, so the town would ultimately be thwarted in that case anyway. The CO was surely done before the deal died.

Be careful with this one.
3 votes
Joe Chang, , Paterson, NJ
Sat Jul 25, 2009
Certificates of Occupancy are usually not provided to the buyer until the very end of the transaction, sometimes even the day of closing. Since I represent many buyers whose banks requires a copy of the certificate of occupancy before clearing their file to close, I have made it part of my buyer's rider to require that the seller provide the CO at least ten days before closing.

In your situation, I suggest you have your attorney at least try to get the CO within fifteen days of attorney review. That way if they have an issue getting it, you can just cancel based on them not having the CO. Your going to have to also have the seller agree to push back the inspection and mortgage contingency dates back so that start to run after the CO is furnished. With that said, its not common to get the CO so early on. But in this market, if I were your attorney i would at least offer to ask.

Good luck.

Joseph Chang

*Please note that this is general information only, and not to be construed as legal advice, if you would like a consultation please feel free to call and make an appointment"
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0 votes
John Sacktig, Agent, New Jersey, NJ
Thu Dec 18, 2008
I think the CO is due just before closing in Clifton.. within 30 days. When you write a contract to purhcase a home, these items are hammered out during attorney review, it is the sellers responsibility to get the CO and they will have to get the CO and deliver the house in good order otherwise youcan get out of the deal.

It is not the practice of giving the CO to the buyer before you have a deal and or do inspections. It is due by closing date. You say there improvments that that have been done and you can not get a CO for (?) 1) how do you know this 2) it will be the sellers reponsibility to either pey the fine or have the issue resolved.

Your expectation of a CO before you are out of attorney review is not how it goes... just like buying new construction.. would you expect there to be a CO before the property is finished?

This is the homeowners responsibility. What you are stating works nboth ways..why should the seller jump through hoops if you can't buy the house?
0 votes
Scott Godzyk, Agent, Manchester, NH
Thu Dec 18, 2008
your purchase and sales should be contingent upon receiving the co within 3 days from acceptance offer. That way you have not spent any money or time if they do not provide it. there is no reason they will not provide it. you can bypass teh seller and go straight to the town yourself and ask to see a copy of it, it is public record, it is not secret. dont wait for them, go get it. and if something is wrong squash it now. this should have been done prior to even putting in an offer if you had any inkling something was wrong. good luck in working things out
Web Reference:  http://www.ScottSellsNH.com
0 votes
Laura Gianno…, Agent, Manahawkin, NJ
Thu Dec 18, 2008
You can check with the town to see if any permits have been issued and closed with a final inspection. If you used a standard NJAR contract, the owners will have to provide you with a CO, that's their respondsibility.

So why do you need it now? What does your agent advise?
0 votes
Paul Howard, Agent, Cherry Hill, NJ
Thu Dec 18, 2008
You might need more than a standard C/O. You should advise the town tax assessor and see if they have a record of the features you think were added. If they don't they that could confirm (also check with construction office) that the modifications were made without permits. If permit are pulled and closed then there likely would be a reassessment that would increase the real estate taxes on the property. Don't buy it till you have all the i's dotted and t's crossed unless you are willing to incur what every expense in involved in making the town happy.l
0 votes
Jeremy S. Hi…, , Cherry Hill, NJ
Thu Dec 18, 2008

You can go to the township and ask what if any permits have been filed on that home. This information is public record. Nothing prevents you from doing this now. In fact I would advise it if I was your agent. You should try to gather as much information as possible prior to going under contract. In addition review the sellers disclosure. The sellers are obligated to disclose what improvements were made and if these improvements was done with the proper townships inspections, and permits. If a seller fails to disclose this can be considered a breach of contract.

Best Regards,

Jeremy S. Hill, Realtor Associate
Keller WIlliams Realty
1814 Route 70 East
Cherry Hill, NJ 08003
Office: 856.685.1651
Mobile: 609.876.5817
Fax: 856.321.1414
"Your Interest 1st Always"
0 votes
What if you keep asking both realtors for the NJAR form for disclosure and they tell you that the seller never lived in the house so he cannot disclose.
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Cheryl R. Su…, , Schwenksville, PA
Thu Dec 18, 2008
It can be requested, however it is not required prior to the day of closing. You should do the inspection prior to obtaining your mortgage commitment anyway. Once you have had an inspection, you can negotiate the findings. However, you may need to work with the seller for any possible restructuring of the home, otherwise you can accept the property as is or back out of the contract. If you are that worried, you should not buy it. I would also reccommend getting an appraisal done asap. This will help in the negotiating of price if you want to buy it regardless of the condition.
0 votes
Peter J Roge…, Agent, Mahwah, NJ
Thu Dec 18, 2008
Well if I remember correctly if you are in Clifton the town will not issues a C of O more than 30 days before the closing so that might not work.
But towns are complaint based and listen to annonimous complaints
But i am curoius how you know that the owner made improvements without obtaining permits and that the improvements done need permits in the first place. You realise that if these are significant changes the town is within its rights to have the owner restore the house to its original condition and are you sure you want to buy a house which has been ripped apart?
Clifton is pretty strick when it comes to this osrt of think - ask me how I know!
0 votes
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