Permit sign-off and C of O
Last year my husband and I bought a house that still has an open permit on it for work that was begun in 2003. At closing we signed a contract with the seller stating that they would finish the work and complete the inspections in order to obtain the sign-off within 3 months. Some funds…
Last year my husband and I bought a house that still has an open permit on it for work that was begun in 2003. At closing we signed a contract with the seller stating that they would finish the work and complete the inspections in order to obtain the sign-off within 3 months. Some funds were put into escrow to ensure that they did this. Unfortunately, a year plus later they have not and so according to the contract the escrow money should now be released to us so that we can complete the work. The seller has agreed to handover the escrow money, but on the condition that we release them from any liability relating to the C of O or the legal usage of the property. The house was built circa 1899 and so (to the best of my knowledge)does not have a C of O, but is noted as a 2 family dwelling in the finance records on the DOB site. Does this raise any alarm bells to anyone? On one hand, we want the issue resolved with the permit so that we can move forward and will have no problems selling in the futre. But on the other hand I’m worried that trouble is lurking around the corner with this C of O thing. Can anyone offer any advice on how to best proceed? Should I go to the DOB to ask them if there is any problem with the legal usage of the building before deciding to take their offer?
You should get an expeditor: they will be able to walk you through the process. Unless there is some strange situation (like the one described by ladybird, which is unusual) you should have no problem and you will not need a CofO as long as you retain the 2 family status (although for the record, its HPD not the finance dept that have the decisive record of the legal occupancy allowed for a building, you can check that online too, and again, an expeditor will be a great help)
Thanks to everyone for your thoughts and advice. We feel a bit more secure with the situation given that it is not that unusual, and that this issue of the legal usage of the property seems to be not such a huge one.
The open permit is an Alternation type 2, and we do have a copy of the architect’s plans, but not the perforated (approved) plans from 2003. Not sure if these are the same or not, but I will make a trip to the DOB to get them just in case. We have also been in contact with the architect of record on the permit and got a list of the items that need to be completed inorder to secure the sign-off. One of these includes a plumbing inspection which may end up a problem area as some of the plumbing work seems not up to code. We also got a quote from a contractor on how much it will cost to do the work, and it is over the amount in escrow. Its just a first quote, and it he did try to base in on a “worse case scenario” so it is possible that the end cost will be closer to the amount in escrow.
We do have a lawyer, but he seems to regard this siutation as an annoyance so is not always forthcoming with contructive advice. Thanks again for being there for us Brownstoner bloggers.
It might not be too much of a big deal to have someone complete your signoff, Turtlejam, but a few questions:
Was the 2003 permit an Alteration 1 or an Alteration 2? It should say on the DoB site’s database, and
–if it’s and Alt-2 that means no revision was made to the C of O at all.
–it if says it’s an Alt-1 that means that you do have a C of O or an effectively identical situation to one.
Do you have a copy of the perforated (approved) plans from 2003? You should, or you should make a trip to the DoB to obtain them. This will be the single biggest determinate for how difficult it is to clear up the problem. Getting the plans is the first step here.
It might be, cross your fingers, that there is not much more work to do here than a signoff. In that case, the sellers just got overwhelmed or something (?) and you got the escrow and made some extra money. Otherwise, the expense of correcting the problem will depend on the specifics in the filing from 2003. Without that, you can’t tell much.
I know it’s not ’01, but when I bought my house, it was “as is” and I had to put iirc $2000 in escrow to correct violations, all minor (unpainted hallway, bad light switch, eg,) some from 1992. I don’t even remember if we got it back.
I wouldn’t contact DOB unless you’re wanting to do renovations under permit. The multi-family status of the house is a matter of record and can be easily checked by your lawyer. I know we got a notice 2 years later saying we owed some 4 family-transfer tax that the seller refused to pay (didn’t know buyer can be held responsible for seller’s default,) and our lawyer resolved it back to 2-family and no tax, in a short time and didn’t charge us, so it must’ve been easy.
We didn’t have a CO either, and it had no impact on financing or refi, although that was in ’04.
Maybe John!!! But my first two sentences are the most important points.
Still “early-morning groggy”, Dave? I seems pretty clear from the OP that the escrow money was held from the seller.
Do you have a lawyer???? He should be handling all of this.
Besides, if I am reading this correctly, the escrow money should have been witheld from the SELLER to force HIM to do the work. Holding money in escrow from the buyer makes no sense unless there was some “side” deal of a return of proceeds. Clearing up the open permits should have been a condioin of the purchase/sale.
If I am understanding your problem correctly there is no C of F on your 2 family home. I had the same problem with my brownstone in Bed Styv . I was having my electricity upgraded so I needed the proper permits. I found out that the Dept. of Bldgs. had no record of my home what so ever. The house is a legal 2 family from back in the late 1800s. I had to obtain a document from the DOB called a letter of no objection. Houses back in that time did not required a C of F. Be ready to do some leg work cause the city has no clue sometimes on what is going on within there own entity. With obtaining this letter you will have to show proof that the bldg does exist. After giving the DOB all my proof that the bldg did exist they issue me a letter stating the dept had no objection to a 2 family dweeling, so I was finally able to get the proper permits to upgrade my electric.They should inform you with what is needed in your situation. Good Luck.
From my experience with DOB, it is hard to imagine the seller would have been able to complete their obligation within three months. That aside for the time being, you wrote: “The seller has agreed to handover the escrow money, but on the condition that we release them from any liability relating to the C of O or the legal usage of the property.” Was that condition included in the original contract? If not, consult carefully with your attorney about how, why, if, it would be beneficial to incorporate now, rather than enforce the contract as written.