Risk Associated with Purchasing Brownstone Renovated Illegally

What DIBS said! The CO is really the key thing. And it needs to match for the configuration of each floor. If it was formerly a 3 family, with separate units on each of 3 floors, and now it is two studios on one floor and a duplex above, you need a new CO. This will require an expeditor and maybe some modifications that the DOB requests. Consider having an escrow fund set up from the purchase price to cover the related costs and expenses (if you want to close now.)

ame_raleed

in General Discussion 8 years and 9 months ago

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elizabethwhiston | 8 years and 9 months ago

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Right. I understood the distinction. The bank, in the situation I was involved in, became aware of a recent renovation. They wanted proof that the work was permitted. It had not been. Same situation. It almost scotched the sale. The seller had to go through all sorts of costly gyrations to satisfy the bank. Ugly. Granted, this was one of the tougher banks.

elizabethwhiston | 8 years and 9 months ago

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Right. I understood the distinction. The bank, in the situation I was involved in, became aware of a recent renovation. They wanted proof that the work was permitted. It had not been. Same situation. It almost scotched the sale. The seller had to go through all sorts of costly gyrations to satisfy the bank. Ugly. Granted, this was one of the tougher banks.

daveinbedstuy | 8 years and 9 months ago

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I think the problem is that we have an inexperienced (maybe even a first time) home buyer. He doesn’t know what he should expect and we are now complicating the discussion for him. I assume there might be difficult banks out there and he probably should use a mortgage broker like Adam Dahill who can address these things for him and will hook him up with a lender where this isn’t an issue. In fact, he never asked about what a lender might do but more about what might be potential DOB issues. As unpermitted renovations go, a moved kitchen and an installed bathroom are pretty standard, commonplace issues. What we should have also mentioned to him is to check to see if the property has an existing C of O and to make sure the layout agrees with that for both the bank and any future permitted work.