Closing on a brownstone with violations?

Hello, I’ve been in the closing process for four months now and it has just recently come up that the owner does not want to take care of old HPD violations that are still open – it is in our contract that the property must be free of violations at closing. Violations include roof, plaster and plumbing repair, refitting an apartment entrance, etc – nothing seemingly too major – there are only a few items we weren’t planning on fixing in the renovation. We will definitely be fixing the roof. We asked for a small credit at closing to fix these things but the owner refused, saying he already gave us a big reduction on the selling price. He also doesn’t want to take care of the violations himself because it will take a month and a lot of his time. Is it a terrible idea to accept the violations and move on? Does anyone know what’s the worst that can happen? Thanks

Guest User | 6 years and 10 months ago

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Guest User | 6 years and 10 months ago

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I was finally able to get in contact with someone at the HPD. She looked at my violations and said it should be taken care of with a $300 and a visit from the inspector, as barbiduleny mentioned. The key to getting a human on the phone is pressing the option for “replying to a notice you received from the HPD” instead of the former “general questions” option I was selecting.

Guest User | 6 years and 10 months ago

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if a city agency thought somebody owed them $700,000 they wouldn’t just be sitting on their asses. you should contact HPD. you might be able to re-open the violations in order to certify correction or you might be able to request dismissal based on reinspection, depending on what type of violations they are (as barbiduleny stated above).

Guest User | 6 years and 10 months ago

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dibs, our lawyer is fine – it’s the sellers and their team who are to blame. Their brokers are offering us $2,000 to cover the cost of the violations, no money will be held in escrow, and we will close while assuming the responsibility of the violations. Fingers crossed…

daveinbedstuy | 6 years and 10 months ago

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If your lawyer isn’t on top of this for you then you need a new lawyer.

southsloppy | 6 years and 10 months ago

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fwiw, we had 4 B class violations that were over 15 years old. The house changed hands a couple of times during that period, so it’s true that you can close with the violations open, our bank just wouldn’t let us (I am actually thankful for that now even though it was an added pain in the butt). The process to get them cleared involved requesting an inspection and paying a fee of $250 (for a 2 family). It took 3 months for the inspection to be scheduled and our inspector was in / out in 5 minutes. Your mileage may vary.

Guest User | 6 years and 10 months ago

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Hi all, thanks so much for your thoughts. I took a look at the fees – there are 8 class B violations and 1 class C violation – $10 per day and $50 per day, respectively. These are over 20 years old which amounts to over 700K. Could it be that we would be responsible for any of these fees if we closed with the violations? Does anyone have experience having to pay fines/fees for these violations? Also yes, there is a lender who doesn’t care about violations but the truth is my husband and I still do.

namahs | 6 years and 10 months ago

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Wait, so you’re 4 months into your closing and now you found out the seller does not want to close the open violations? This was not brought up during the contract signing and no one followed up for updates?

I agree with others that you might have issues with the title insurer or your bank mortgage but by now, I would imagine you would know this would be an issue or not.

It boils down to how much do you like this house? Good thing is that it is in your contract that the violations has to be corrected.

If the seller says he doesnt want to fix and changes his mind now..the process to correct and remove the violation will take a long time.. months..if you are lucky. To speed things up..escrow can be created. Good luck.

randolph | 6 years and 10 months ago

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talk to adam dahill, he did my mortgage and they did not care about HPD violations.

southsloppy | 6 years and 10 months ago

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We had the same issue (a handful of old HPD violations at closing). Check with your lawyer but i think it’s a pretty standard clause in the sale contract that the violations are to be cleared by the seller. If you are financing the bank will (rightfully) require a hefty amount in escrow that can paid back to seller once the violations are cleared. The tough part is also what i’d call the inspection lottery: you set up the inspection and you can an inspector who will focus on just clearing the violations, or you could get somebody who will open new ones (which most likely will be your responsibility to close).

slopefarm | 6 years and 10 months ago

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Title insurer may have a problem with this and may want an escrow or something. That said, you don’t want the seller fixing these things because they won;t get done right. See if you can leverage the title insurance angle into a concession in the form of an escrow fund to be used to fix these things and pay fines etc.