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February 4, 2009
HELP: Cert. of Occ. issue
What would you do in this Cert. of Occup. situation?
A little history, we are trying to buy a single-family attached townhouse. Even before we executed the contract, we had a feeling the enclosed 1-story back addition (20’x8’) might be an issue as we had gone on the Dept. of Building website, poked around, and saw that in 2000 some permits were issued but never closed out. We told this to our lawyer who says we won’t know for sure until the title search is done but he had flagged this issue to the seller’s lawyer beforehand. Sure enough, in the last week of Dec., the title search comes back and show that there a Cert. of Occupany in 1940 but a new one was never filed after the job that was not signed off in 2000. A formal letter was sent to the seller’s lawyer.
Its now a month later, we’ve gotten our letter of commitment from the bank on Jan. 14th – it expires on Feb. 23rd. Turns out the sellers have not done anything this whole time. The story is their expeditor has told them they need to hire an architect to have drawings drafted and stamped but they are “taking bids” was the last we heard. (I don’t actually trust the seller’s lawyer because its not the first time she has mis-represented her client. She told our lawyer that we had all been discussing a 10,000 deduction to the price if we take on this CoO issue – um, no we’ve never discussed this.) ANYWAYS, our bank will not give a mortgage on a house without a valid CoO. They said they will not even consider an escrow process of any sort because its against conforming loan/Freddie/Fannie guidelines apparently. To extend the commitment, they will charge 1/4pts for the first 30days and then 1/4pts for each 15days after that.
So what to do? Time is ticking on our mortgage commitment. We are both financially and emotionally invested. The only thing our lawyer has said is that we can do is to write them an ultimatum letter giving them the required 30-day notice to come to closing or to give us our down-payment back.
The job description on the DoB work permit says, “to demolish and re-construct on new footing one story frame enclosed porch at rear of existing dwelling. There is no change in use, group, occupancy or egress under this application.” However we’ve seen electrical outlets and a base-board heater in the addition… Does anyone know how fast this can happen if drawings can be stamped and done in 1-day?
Is there a second option to demolish this addition/renovation and to have the city come out and negate the 2000 permit and get a fast Cert. of Occupancy that way? We don’t particularly care for the addition anyways…
We can’t imagine why the sellers are not more cognizant of what is happening unless he is getting bad advice from his lawyer… this house has been empty since the summer of last year when his mother died… I can’t imagine why he would stall the process on purpose…
Comments
Errgh... Sounds gross. I hate to say it, but I would move on. You will have enough on your plate, let alone cleaning up someone else's mess. Shouldn't your lawyer have more of an opinion on this, if they are truly experienced with the RE market here? I'd think this is the kind of thing they should be protecting you from.
Posted by: meerkatz at February 4, 2009 11:53 PM
Our lawyer has been doing this for 25yrs though most of his work is in Long Island and Queens. He does a lot of the stuff by the book, I guess. For example, when I wanted to write into the contract that the seller was required to cover any costs associated with getting the mortgage (application fees & appraisals) if in fact the contract does not go through because of their fault, he advised us that no one has ever done that. With this latest issue, because we have been nice and allowed them extra time, the 30-day notice required now puts the closing date deadline past the last day of our mortgage commitment (Feb.23.) We had talked to him about putting in the letter that we would want fees for the mortgage extension paid by the seller, and again, he advised us against it for this letter, saying that technically, the law required the 30days and we are responsible for maintaining our mortgage commitment until then. He says he is hesitant to put anything on paper that would 'make us look bad' and I guess that translates to 'not hold any legal water?'
Anyways I'm trying to get a hold of my loan officer since I am not sure how the extension of the mortgage works - is that fees we pay regards if we even come to closing?
Posted by: helppls at February 5, 2009 8:40 AM
My 2 cents-- I would get another opinion from a lawyer familiar with this market. What neighborhood is the house in? Do you know any people in the neighborhood to ask for a lawyers referral? If you are emotionally and financially invested, paying for a second opinion makes sense.
Posted by: Schultz at February 5, 2009 9:46 AM
How badly do you want the house? How despearate are they to sell? Your lawyer's advice seems sound to me. Alternative is an agreement that they reimburse you for any additional fees you incur if you have to extend. If work actually has to be done to clear teh c/o issue, you could be in for a long wait if seller is reluctant to spend money. This may not get done right at seller's end. I don't expect you to get far with a complicated arrangement, particularly since seller's lawyer has not been straightforward. Make your demand. It will concentrate the seller's mind and you will see whether you can get anywhere.
Posted by: slopefarm at February 5, 2009 10:14 AM
In terms of actually obtaining a C of O, this is an uphill battle and can take some time (60 to 90 days).
Assuming the work permitted in 2000 was done correctly (drawings submitted by an architect, reviewed by dob and approved) and performed (no violations) to code, a new application must be submitted to the DOB to reopen the file and obtain a new work permit.
This will require a licensed and insured contractor as well as an expediter (although some contractors handle the expediting in house).
After the project is re permitted by DOB, inspections must be scheduled by the contractor for the sign off process. This will neccesitate A DOB Inspector to visit the space and visually confirm work is as per the drawings and to code.
In addition various documents may be required to be submitted to the DOB prior to sign off and receipt of a C of O. These are called technical reports (TR-1) and without all the required forms, you wont get a sign off.
For instance, you mention the scope required new footings. Generally controlled inspections are required to be performed for footing work, including but not limited to concrete design mix from the concrete supplier, cylinder test reports confirming the concrete strength in psi, etc.
Required submissions will vary project to project an can be confirmed using the DOB website and the buildings address.
Hope this helps...
Posted by: NYCBuilder at February 5, 2009 11:34 AM
beyond what nycbuilder says something filed in 2000 may be too long ago, DOB might not even consider the documentation valid - especially with impending CODE changes, but who knows. Are the permits still active? Another architect could supercede to take control of the project, but its a huge mess and no one I work with (expediter) will commit to any timeframe for obtaining a C of 0. The DOB can come back time and time again for inspections and find minor items that need to change, only to take another month to reinspect. If your hearts set on it, there are always ways to make things work, but It will be a battle royal. There are open houses at the DOB tuesday nights once or twice a month, you could look for some clarity directly that way, but I don tthink it would be anything other than a vague roadmap of what to do.
-josh
Posted by: jp2 at February 5, 2009 11:49 AM
NYCbuilder, having looked under the work, we already know there are structural issues as the floor joists were incorrectly installed (no joist hanger.) Is there any possibility of just demolishing this addition and thus getting the 2000 permits nullified? Would that be easier/faster? Like I said before, we don't really care for the addition period.
I am assuming there are no drawings, either missing or not filed, if their expeditor is telling them they need new stamped drawings.
jp2/Josh, I have no idea if the permits are still active. We just googled the PE's name (from the 2000 renovation) and it came up on the DoB website as having "voluntarily given up all his privileges" so doubtful of being able to follow up there. I am not sure if there is any way at all to make this work. It sure doesn't sound like it at this point - are there any banks willing to deal with a CoO issue? If not it really doesn't sound like there is anything else we can do since it is the seller's responsibility to clear this and based on their track record it is not promising they will do the right things as slopefarm pointed out...
Posted by: helppls at February 5, 2009 12:08 PM
drop me a line with your number or ill email you back my number and i can walk you through my opinion of the DOB end of your problem - its probably just easier than back and forth and frankly im procrastinating today, we can also go to the DOB website and look at the status online. If thats creepy, email could work. jpulver@apluscny.com
-josh
Posted by: jp2 at February 5, 2009 12:25 PM
I believe the core issue here is the C of O, or lack thereof and the time sensetive nature in obtaining one. Interaction with the DOB unfortunately will be mandatory whether demolishing or legalizing the structure. The reality is that this will take 2 to 3 months (with the right team, including an aggressive seller)to clear up and obtain your C of O.
Its probably more cost effective for the seller to just do away with the structure, for various reasons (too many to list here); however they will still be required to:
-File for a permit. (this will entail sealed drawings!)
-Obtain permit. (this will require a lic. & ins. entity)
-Perform the work.
-Schedule inspection with DOB.
-Submit required sign off docs.
-File for C of O.
Maybe the sellers price can be adjusted by the commensurate amount this "time to cure" will cost in points...
Feel free to email me if you need any more clarification. IL524@hotmail.com
Posted by: NYCBuilder at February 5, 2009 12:52 PM
Isn't the old CofO from 1940 still technically in place until a new one is pulled? I would have thought that what you have is a building with the old CofO, and some uncompleted, filed work. The bank might not want to close with that either, but it's a little different than having no CofO at all.
Posted by: brooklynrulz at February 5, 2009 1:12 PM
Brooklynrulz, yes you are right. According to the title search, the original Cert. of Occupancy was located. But on the same search sheet, it lists the Permit from 2000 as "NOT SIGNED OFF. To demolish and reconstruct one story frame enclosed porch at rear of dwelling. A new certificate of occupancy will be required."
Could someone have made a mistake? This is a ATL-2, renovation with some plumbing (base board.) Everyone on this block has these 1-story enclosed porches. Based on my research, an updated C of O should not be required, right? There is no change to the use, occupancy or egress (does a new door constitute an egress change?) Mistake? Maybe?
Part of the bank's mortgage commitment terms and conditions lists Legal Compliance. It says "if requested by the Lender or title insurance company, a copy of the certificate of Occupancy for the property must be provided prior to closing." Should we have just ignored this CofO issue until closing and crossed our fingers hoping they wouldn't ask for it?
It sucking right now to be a first time homebuyer, trying to navigate this craziness...
Posted by: helppls at February 5, 2009 2:14 PM
I'm no architect, but if an Alt-2 was filed, but DOB approved with a notation that a new C/O was required, then you can't stand on the Alt-2. You would have to get DOB to change its mind.
Seriously, you can make yourself crazy figuring this out, but you can't solve it from home as the buyer. It is going to take legwork which you should not invest in while the house is someone else's. Either demand that seller deliver the property to you by a date cetain free and clear of these problems so your bank will close, or you convince the bank to let you close while inheriting the problem. There's always another house. Sellers also have to know now they will encounter the same thing if they try to sell to someone new, unles an all cash deal. So don't think you don't have leverage.
Too belatedly in our situation, we adopted a no bulls--t rule. It's one thing to encounter a problem, but if you encounter BS, you have to assume it is the tip of the iceberg, and you will make yourself crazy continuing to pursue things as if you were still operating in a good faith world. Figure out your needs and options, set parameters and boundaries, and take control. Don't get sucked into the vortex. It's hard to know your in it before you're in it deep, but it sounds like your wheels are spinning because you are heading there.
Posted by: slopefarm at February 5, 2009 3:08 PM
The footings are an issue as NYCBuilder pointed out. When I was doing an extention in Cobble Hill, we had photos of the footings as well as a concrete sample saved for the CofO inspection. I'd get out.
Posted by: Jebby at February 5, 2009 3:29 PM
So there is a co of o but it does not reflect the extension? How will the bank ever know? Their valuation is based on comps. When in doubt, put your trust in the inefficiencies of NYC.
Posted by: Cobblekrill at February 5, 2009 3:41 PM
An Alteration Type II directive 14 does not require an amended certificate of Occupancy. To sign it off, a letter of completion is obtained at the Building Department when the architect/ engineer submits the required technical reports. A horizontal enlargement can be filed as a Directive 14 as there is no change to occupancy, use or egress and as long as comply with zoning regulations.
If the Alteration Type II directive 14 was filed in conjunction with an Alteration Type 1, then an amended Certificate of Occupancy is required.
Posted by: FortGreenster at February 5, 2009 7:10 PM
Move on to another building, too messy!
Posted by: MarionG at February 5, 2009 10:41 PM
if you are still messing with it, give me the address i will tell you what the story is,
you got alot of great advice.
what makes it a CofO issue?
there is a 1940 CofO and some open applications.
ONLY if there is an application to ammend the CofO will you have a CofO issue. then that one must be completed or withdrawn.
if all applications are alt 2's then you only have an open application issue
banks dont like open applications.
but that is no different than if you bought the building and had to repair the footing under the porch yourself.
buy it, repair it or remove it. start a new application because the 2000 job is dead. have a fit with the sellers lawyer to get as much escrow as possible and hire an architect to do the work. new drawings because you want to actually finish the job. its not difficult
Posted by: dexpediter at March 11, 2009 10:34 PM
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