Seller not providing a CO - is that a red flag?

Question

Hi everyone,

Looking to put in an all cash offer on a SFH in Bethleham (Lehigh Valley) but the seller is not providing a CO. I am hoping the inspection will tell me if there are any bigger issues but is there anything I am overlooking in terms of the CO? Would that be an issue when refinancing or getting new tenants? (its currently tenant occupied)

Thanks!!

Ronald Bowser · Answer

Hi @Jay Shah,

The CO is required by the city and is typically geared towards safety issues (fire alarms, graspable railings, functioning windows, etc.) and while they will flag serious issues they find, it should not be considered a thorough inspection like one would get performed by a 3rd party inspection service.  I wouldn't consider it a red flag necessarily though, especially with the current state of things, the seller may just not want to deal with it since the city isn't currently performing inspections.  If you are getting a 3rd party inspection, I would rely on that, as it will be much more thorough.

You will need to get the CO satisfied to legally have a tenant, and some lenders will have issues if there is no CO at the time of financing.  Since there is a tenant in place, you will have a period of time to get all repairs completed and brought to code, but they will not make them leave or anything unless they deem it unfit for habitation.

I hope this is helpful, but let me know if I can try and answer anything else.

Jay Shah · Answer

This is very helpful! Thanks Ronald, much appreciated. Will make sure during the inspection that there's nothing major that'll hinder the CO in the future.