BUYERS - DO YOUR DUE DILIGENCE

Don't Depend on Your Agent or Attorney

As an architect and building codes expert, too often I am confronted by situations where homebuyers, their real estate agents, or their attorneys have not performed adequate due diligence and leave them with what can be an expensive problem not of their making.

My first example involves a young couple who made an offer on a 40 year old house here in a Connecticut city. The real estate agent representing them was alert enough to check city records and find that a two-story addition that had been built 30 years ago had never been inspected by the building department and never had a certificate of occupancy. The seller's agents did not make the effort to check this out and minimized its importance. I was called upon to identify code violations and what it will take in corrective work so that it will pass inspection and get a certificate of occupancy. There were significant structural and weather protection issues which would cost about $20,000 in repairs. The buyers wound up having to pay half, an additional $10,000 above their contract price. They had no choice if they wanted to get a mortgage.

The second example I have concerns a house in an affluent town in Connecticut. We designed an exterior makeover to give the house a more unified and traditional style. The project did not involve additions or any structural work. This should be easy to get a zoning permit for, shouldn't it? The couple I work for owned the house for 15 years. What do you think I found when we went to the zoning office to apply for what should have been a simple permit? Thirty-one years ago the previous owners obtained a zoning permit for a tennis court, built it, never had it inspected and left an open permit. Thirty years ago the previous owners built a substantial expansion of the house, doubling its size. They got a zoning permit, built it, but never had it inspected and left an open permit. Twenty years ago the previous owners got a zoning permit to add a sunroom, built it, but never had it inspected and left an open permit. Obviously the town has ridiculously poor record keeping. But the big questions for me are: Where were the seller's and buyer's agents in checking on the permit status of the property before listing it or going to contract? Where was the buyer's attorney in not making the simple inquiry to town offices about any open permits?

These two examples are only the latest in many such cases I have encountered over the years with both residential and commercial properties. Virtually every time I have been hired to assist with assessing a property before a purchase I have found open permits, lack of certificates of occupancy, or code and safety violations that must be corrected. Sometimes these issues have had a significant impact on the value of the property or its usefulness for the prospective buyer. One can only wonder why other professionals in the real estate industry often miss checking on these matters.

So my strong advice to anyone contemplating the purchase of residential or commercial property is this: Make the simple and small trip to the building, health, fire marshal, zoning, and conservation offices and make sure you know all they know about the property. Or you can hire my firm and we will gladly do it for you.