Law and Practices:
Certificate of Occupancy (CO) is a document which dictates the legal usage of a real estate property. The CO is issued by the New York City Department of Buildings (DOB). Here is a link to the NYC Department of Buildings. Anyone can check online about information on a particular building, such as whether there is any violation, CO, complaint, and/or unsigned off renovation work, etc.
Story:
Benjamin and his wife, are planning on purchasing a two family house. The house they made an offer on has two stories. Each floor has a kitchen and a bathroom. It looks like a two family house, structure wise. They are very excited to sign a contract of sale.
When our firm received the contract, we did a CO search prior to signing the contract. One usually can find the CO information on the website above referenced, but sometimes houses built prior to 1938 do not have a CO record on DOB website. The DOB website does show “building code” which indicates a 1 family or 2 family dwelling or other use of the property. However, do not ever mistakenly think that the property is a “legal” 1 or 2 family dwelling just because the record on the DOB website says so. The building code is designated by the Department of Finance (DOF), for real estate property tax purposes. It never designates the legal usage of a property. Only the CO designates the legal usage. Therefore, a house could be taxed as a 2 family but actually is a legal 1 family.
Benjamin did not want to pay the same price for a single family house, but since he really liked the house, he renegotiated the price with the seller and signed the contract for a reduced price.
Resolution:
When people are purchasing real estate property, they are often paying for what they see, not for what it truly is. In the event no record can be retrieved from the DOB website, it is critical that buyers ask their lawyer to get a copy of the Certificate of Occupancy before they sign a contract. It only takes a day or two and costs less than $100.00.
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Jacqueline Huang Huang & Associates, P.C. 6402 8th Avenue, Suite 405 Brooklyn, NY 11220 Telephone: (718) 435-666 Email: jackiehuang@huanglawfirm.com  |
