No Drama Real Estate Rules

Selling a house depends on many things:  location, size, property, style, price, market situation and the condition of the house. This last factor is really about maintaining a house. Maintaining a house well is a full-time job, one that many people do while holding down their paying full time job, so sometimes details understandably fall through the cracks. Of those important details, one very crucial one is to make sure any permits—pulled prior to work done to a house—are closed out with the final inspection and a Certificate of Occupancy (or CO) is delivered.

I’ve been involved in many transactions over the years in which we discovered the property had open permits at the time of the listing, and the homeowner had to try to piece together the project in question, sometimes trying to contact contractors who had done work so long ago they were out of business (or worse!) before they could close on their sale. The CO issue is a big one in town and has created some drama in transactions, and we do not like drama in real estate! Don’t let that happen to you!

Almost every home project requires a permit from the town before work can begin on a home. This ensures that the work is being done by a licensed professional, and being completed to appropriate standards and codes. Once a permit is “pulled” at the town, the contractor will schedule intermittent inspections during construction for the building inspector to come out and take a look at what’s been done thus far–electrical, plumbing, framing, etc, and make sure that  any changes made to original plans (which are filed at the time of permitting) are in compliance.

The final inspection grants the CO. The CO warrants that the project has been inspected by the town and all work was done to the satisfaction of the building department. Most good contractors are diligent about these inspections, because they know that once the permit is pulled, they will be liable for any work that was done. Their diligence however, sometimes wanes with the last check you write, and some projects are left without their Certificate of Occupancy. When you go to sell your house, your real estate agent and/or your attorney will check for outstanding paperwork and if there are open permits, you will be required to complete the CO before title passing.

If the job has been done properly, inspected regularly and done recently enough, the town usually tries to accommodate a latent CO and will do the final inspection for a $25 fee and application, and grant the CO if all goes well. Sometimes that’s a big “if” though. There have been cases where property lines have been encroached on for new pools or additions, and variances were required that take time and involve multiple municipal factions. I heard of one horrific case where a brand new pool had to be demolished because the neighbor (with whom the “CO” victim had had a long standing feud) wouldn’t grant the variance that was required for the two feet the pool site spilled over into his property.

While that’s an extreme case, it is always better to secure your CO at the end of your construction, and it’s your builder’s responsibility–or the responsibility of whomever pulled the permit at the project’s start. Don’t wait–and don’t let your contractor walk off with his last check unless he exchanges it for the CO, so you can go to the closing table with confidence!