Selling a home with building violations

Posted by Michael Trinchitella on Saturday, April 12th, 2014 at 8:53pm.

This issue seems to come up in almost every transaction. Typically, a homeowner made an improvement to the home without obtaining a new certificate of occupancy or proper permit and is now worried it may affect the selling their home.

The most common examples are above ground pools, finishing a basement, making a deck larger, a shed, adding a bathroom or making a 1/2 bath into a full bath. Trying to sell a house with a building violation can be a small or sometimes a big problem. The problem is not with the building department. Building department inspectors do not create the building codes they just enforce them. The problem is the buyer’s bank. For the most part a buyer is not going to be able to get a loan for your house if violations exist. Not only is the bank not going to give a loan on a house with violation, the buyers attorney will not let the buyers buy the house until all permits and/or certifications of occupancy are produced.

Possibly the most common response I hear from sellers who have obvious violations is that they bought the house that way which is often the truth. Unfortunately the problem is still yours no matter which owner was responsible for the violation. That wood burning stove that has been in your house for 30 years may or may not be on file at the town and you are responsible to make sure it is. Blaming the person you bought it from or the agent who listed the house who made errors in the listing specifications will not change anything. Doing nothing and waiting to see if a buyer’s bank has an issue or will overlook the violations is a big mistake. It can take 3-6 weeks from when you apply for a permit and the c/o (certificate of occupancy) is issued and some times months if the board of health has to get involved. A buyer may not be willing to wait the extra time and back out of the deal. Quite often the additional time it takes to wait for the c/o and close on the house will be beyond the buyers rate lock date and if you want to keep the buyer you will be the one paying for the buyers rate lock extension which can cost a few thousand dollars. So waiting to see what problems will come up can cost you money or possibly your buyer.

Now do not panic, I see this all the time and most homeowners do not even realize the issue with building violations and the remedy for the most part is pretty simple. Fortunately many buyers are still willing to buy your house as long as you are in the process of correcting the violations when they first see the house. Meaning you have already investigated any violations and are in the process of correcting them prior to them seeing the house. Often buyer’s agents will ask you to produce all permits and c/o’s and if you are in the process of getting them and only a few weeks left before they are issued the agents will usually be okay with that.

The 1st thing a seller should do is go to the building department and inspect your file and see what permits and c/o’s are on file for your house. If you have a finished basement but no c/o for it then it must be corrected. If your c/o says you have 2.5 baths but you have 3 baths in the house, it must be corrected. If you remember putting up a pool or extending a deck and you never filed the proper paperwork it must be corrected. Simply speak to the building inspector and let them know you are selling your house or will be soon and want to make sure all permits and c/o’s are in place so you do not run into and problems that may prevent your home from selling.

For things like extra bathrooms, finished basements, you will need to fill out a permit application which essentially is a detail of the work you will be doing. Of course the work has already been done but you still fill it out showing what work you did. From there the building inspector will review it and if all looks good they will set up a day to inspect the home to see if the improvements were done up to code. If there aren’t any problems then the c/o will be issued in within a week or so but if there are problems you will be told what the issues are and you must correct them and then have the inspector come back again to look it over.

Homeowners that have homes with building violations is unfortunately quite common, fixing these issues are not always a big deal just require a little time and effort on your part. Do not wait until the last minute to address these issues as it may cost you a lot of money or even worse you could lose the buyer.

Thinking about selling YOUR home? Worried you may have building violations and not sure what steps to take to correct them? I help homeowners all the time in this situation. I would be happy to provide a free assessment of any violations that may exist as well as tell you what you need to do to correct them. I would also be happy to provide you with a free home evaluation so you know what your home is worth in this current real estate market. Email at Mike@MikeTrinch.com or call me at 914-403-4868.

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