Selling Your Home? How To Make Sure Required Repairs Don’t Sneak Up On You
Aug. 7, 2018
New Jersey Real Estate Contracts have extensive provisions to allow the Buyer to do "Home Inspections". Buyers can inspect for many items including the Home itself, Wood Destroying Insects, Radon, Underground Oil Tanks, etc.
Often times, the parties negotiate and reach an agreement as to repairs and/or credits to be provided by the Seller to the Purchaser in order to satisfy the Inspection Clauses in the Contract.
However, Sellers should also be aware that most Townships require that the Seller also provide a Certificate of Occupancy to the Buyer at the time of Closing. It is highly possible that the Township will require additional repairs pursuant to their Certificate of Occupancy Inspections. This is especially true in Multi-Family properties, and/or properties in disrepair.
In addition, a Seller must be very careful that they do not agree to a Resolution of the Home Inspection issues only to find out later on that the Seller must repair more items in order to satisfy the Township to obtain the Certificate of Occupancy. The Certificate of Occupancy is a requirement in order to Close. Therefore, the Seller will be stuck and will be forced to satisfy the Township at that time.
Scillieri Best Practice Alert
Consider making the Home Inspection repair claims settlement contingent upon the Seller receipt and review of the Township inspections performed to obtain the Certificate of Occupancy. In this manner, a Seller will not be surprised by a double hit after the Seller has already agreed to a Resolution of Inspection issues.