New Law Eases Burden on Sellers Obtaining Certificates of Occupancy

One of the most frequent issues faced by Sellers in today's market is the existence of open building permits. To understand what an "open building permit" is, it is helpful to give a quick overview of the permitting process when performing work to a property.

Depending on the nature of the work to be performed, a building permit must be obtained by an Owner from the Town building department. Most work done to a house will require a permit with the primary exceptions being cosmetic work (swapping out counters, cabinets, appliances, vanities, etc.) After a permit is obtained, the work commences and, when finished, a final inspection will be done by the building official who will then issue a Certificate of Occupancy, which "closes" the building permit. Often a Certificate of Occupancy is not issued and the permit is not closed. It could be the contractor or owner never arranged for final inspection or there were minor fixes to be completed which were never done.

The issue of "open permits" has arisen due to a change in real estate customs. Several years ago (circa 2010) most real estate attorneys began performing municipal searches on behalf of their clients. A municipal search is different than a title search (which searches only the land records--deeds, mortgage, and the like) in that it review all the other municipal departments--building, fire, health, conservation, and wetlands--to ensure all appropriate permits were obtained and approved.

What many municipal searches showed is many Sellers had "open" building permits where a permit was obtained, but no Certificate of Occupancy was ever issued. Many of these "open" permits dated back thirty or forty years and were from prior owners, and therefore the Sellers had no idea (because a municipal search was not done when they purchased) these open permits existed. Most of the time, the fix was easy, but in some circumstances the only fix was time consuming and expensive. To further complicate the situation, every Town handled the issue differently, so the fix was solely dependent upon the Town and local building official you dealt with. 

Thankfully, the Connecticut legislature stepped in to offer some relief and effective October 1, 2017, a new law took effect. The law "closes" any open building permits more than nine years old. The law applies to any structure, as defined by the local zoning regulations, or if the zoning regulations do not define a structure, it applies to anything affixed to the land, such as a deck, pool, or tennis court. The law does not offer relief if the permit is less than nine years old or if a permit has never been issued, but it solves the problem of the house built in the 1950s with no Certificate of Occupancy and many of the old permits obtained by prior owners.

If you have any questions regarding this article, open permits, or any other real estate matters, please contact us and we will be happy to answer your question!




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