Knob and Tube Wiring Issue- Who Pays Buyer or Seller?

[Mark Bertoni]

New to bigger pockets! I'm currently under contract to purchase a brownstone building in Jersey City, New Jersey. I just had the inspection and the inspector said the building has knob and tube wiring. Apparently it's hard to get insurance with this type of wiring. Should the seller be responsible for updating the wiring? Anyone have an idea how much this would cost "ballpark number". Also does anyone have any recommendations for an electrician in Hoboken or Jersey City. Has anyone ever encountered this issue when buying a home and how was it handled with the seller? Is it the sellers responsibility to fix it being that whomever buys the building is going to need insurance?

Any advice would be much appreciated. 

[Roy N.]

@Mark Bertoni

We are in the process of purchasing a building from the 1920s which is "original": 5-circuits per unit, all wiring (save perhaps a couple of new laundry hookups) are K-n-T; the building has a 200amp entrance for six units :-O   

The re-wiring is handled by either vendor or purchaser - it's negotiable - though vendors are usually aware it is present and not inclined to update it.   Frankly, I view the presence of K-n-T as an opportunity.  With respect to the above building, our offer was initially passed over for another, but that party backed out due to the K-n-T (and a few other issues like a leaking cast-iron sewer main).

The cost to rewire will depend on many factors - how you run the new wiring and how you repair ceilings, mouldings, walls, etc. damaged in the process; how many additional circuits you add; whether you upgrade the service entrance; whether you fish wires yourself of hire it all out to an electrician, etc.  Around here is can cost anywhere from 5K - 20K per unit depending on the answers given to such questions.

As far as insurance, there are carriers who will cover K-n-T (for an additional premium) ... they may require it be inspected and some may require a plan/timeline to replace it.