Obtaining C of O before closing

Hey all, My husband and I could use some advice. We put in an offer on a 4 story brownstone (currently being renovated and yes it is a legitimate, filed with the city renovation,dumpster out front renovation and not the knock em sock em one’s being done in certain neighborhoods) Long story short, we made a very strong offer and the seller’s agent is asking us to sweeten the deal by saying we will close before the C of O is obtained from the city. All of the paperwork has been filed (we can see it online), but what would be the reasons to not do this? Can we get stuck NOT getting the C of O from the city or only able to get the C of O if certain alterations are made to the home? How would we protect ourselves and/ or is this a standard request or a red flag?   Thanks in advance brownstoner crew!

kellyj

in Real Estate - Sales 12 years and 4 months ago

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Augustiner | 12 years and 4 months ago

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I assume you paid for a turnkey 3 family house, correct? Then that should be in the contract.
You really need a good lawyer, and you should not put too much money down because you need a get-out option. It can always be that construction and approval takes way longer than you think.
Renovating a landmark is not an easy task. Updating an SRO to a 3 Family is fairly unpredictable timewise. You will get the C of O only after all work is done according to plans and accepted by the inspector.
“Without a C of O in hand, can you even rent out the rentals in the building?”
-> 100% no

dillettanteinbedstuy | 12 years and 4 months ago

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with the address info i can tell you exactly where you are in the process, I have yet to meet a lawyer or bank or dave in bed stuy that knows the specifics of closing a job with the dob

kellyj | 12 years and 4 months ago

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Well.. not congrats yet.. but thanks! 🙂

kellyj | 12 years and 4 months ago

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Our lender said they would close with escrow and an appraisal. Their have their certificate of non harrasment and said they would not expect us to close until they pass the final inspection and complete the final application for C of O with the passed final inspection, permit and certificate of non harrasment. I will talk to our lawyer, as it does seem a little blurry on the lines here. Thanks all for your input!

sethamin | 12 years and 4 months ago

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If you are getting financing, then will your lender even close without the C of O?

daveinbedstuy | 12 years and 4 months ago

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There are much more difficult and thorny issues in changing from an SRO aside from the DOB inspection issues re: the construction and code.

daveinbedstuy | 12 years and 4 months ago

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Talk to your lawyer.  If he is not knowledgeable on the issue, get a new one.  The escrow is certainly a very good idea but many lawyers believe that even that is a major hassle.  If your lawyer is not an expert in BROOKLYN real estate issues, you have selected the wrong one.

kellyj | 12 years and 4 months ago

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They are saying that the closing would be after the final inspection by the city and that then at that point, we would be waiting for the C of O to arrive. Without a C of O in hand, can you even rent out the rentals in the building? What if they said they will put 20,000-30,000 in escrow until the C of O is in hand after the final inspection. Thoughts on this? Also, what is generally the time frame for receiving the C o O after the final inspection is completed and passed?

jigman | 12 years and 4 months ago

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Sometimes obtaining a C of O can take awhile.  If there are still inspections to be performed by the DOB, I would not agree to this.  You may find yourselves in a predicament where you will have to perform work to comply with an inspector’s objections.  However, if they have already passed all of the required inspections and they are just waiting for the C of O to be processed, it’s probably  a safer situation.  But if I were in your shoes, I would wait until the C of O is in hand.  It’s too common that a technicality is overlooked in this kind of process.

kellyj | 12 years and 4 months ago

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Also.. some more details would be that this is a landmarked property, and the C of O is changing from an SRO to a 3 family.