Basement bathrooms and COs

We've looked at 1 or 2 homes with finished basements with bathrooms. I would bet that more times than not, the sellers don't have COs for the basement bathrooms.

If someone were to buy a house that had an "illegal" bathroom in the basement, do banks really give a hard time? I mean, I'd understand if the bathroom was on the 1st or 2nd floor but do you really need a CO for an underground bathroom in order to close?

We bought 1 house in our lives which didn't have COs for a few small things and while our lawyer told us to get ready to walk away, our bank (Wells Fargo) didn't care.

Which banks are more strict about these things than others?

Basement bathrooms and COs

I could be wrong but I don't think the banks care one way or another. I think it's more about the lawyer advising you against it. My friend and her husband are putting a bathroom in their basement now w/o CO's and permits (in a strict town) so my concern for them would be when they sell they might have a big problem.
If it were me, I'd be concerned that once I gained ownership of the home and the town was notified about the basement bathroom I'd be responsible for all the violation fees, permits, and CO's. I don't know how much it would be but I wouldn't want to take on someone else's problem.
We just purchased our first home 3 months ago and have paperwork (blueprints, copy of CO's court papers, permits etc) for the past 4 owners going back to the original owners. I was reading through it and the town was asking 1 seller (15 years ago) to rip down the front porch and portico because they didn't have CO's for them. The current owner defended himself saying that he didn't do the work and bought the home like that. The town didn't care. I have all the court papers and the matter was finally resolved....2 years later!! The town/county let him keep it and gave him new CO's.
That would be my only concern. I think if your lawyer is telling you to walk away he/she is probably only looking out for your best interest. I've ready horror stories on here where the town requested certain parts of the home to be ripped down because there were no CO's for it (porch, sunroom, garage, etc).

HTH

Basement bathrooms and COs

I think it really depends on the bank and who they have doing the appraisal

Basement bathrooms and COs

I wouldn't be concerned. Most banks won't care. And worst case scenario you remove the fixtures and cap them before closing.

Re: Basement bathrooms and COs

Re: Basement bathrooms and COs

Re: Basement bathrooms and COs

Re: Basement bathrooms and COs

It's really 2 issues:

1. Do you care (because of issues that other people have raised about inheriting someone else's problem, having to pay down the line to bring things up to code, having issues selling in the future); and

2. Does your lender care?

If you care, you can always find out whether the CO is in place before you sign the contract (or even make an offer). If the seller says they have it, make sure you see a copy of it, becuase lots of sellers legitimately think they have COs, but what they have are open permits. You can always go to the town to verify if there are COs for anything you are questioning. Basement bathrooms are common items that sellers don't get COs for, as well as things like decks, sheds, and above ground pools.

If there are missing COs, you can ask the seller to obtain them, realizing it may delay your closing (even if the seller hires an expeditor, which is a common thing to do on Long Island). How long it takes to get a CO depends on the town, the issue (for example, is it a matter of closing out an open permit, or is it a situation where no permits were obtained at all and you need a variance to make the item legal), etc. In certain circumstances, the seller may prefer to give you a monetary credit to obtain the CO yourself. Or sometimes, the sellers refuse to get COs and say the house is "as is." If you love the house, and don't want to deal with the CO issues (by either getting one or waiting for the seller to get one), you can always remove the illegal item or ask the seller to do it (e.g., rip out a basement bathroom).

If you don't care about the lack of a CO for something like a basement bathroom, your lender may very well care. I find that the larger commercial banks (Chase, Bank of America, etc) will make a bigger deal about CO issues than more local specialty mortgage banks that are more familiar with what's customary in the Long Island area. Credit unions are also pretty conservative with CO issues. If your lender does insist that COs are obtained so that you can't close the deal without them, you have the options outlined above (seller gets CO, you get CO, rip out/remove the improvement that lacks a CO).

Re: Basement bathrooms and COs

After seeing what open CO issues have done to some of our clients, I personally wouldn't buy a home with any open major issues. Minor issues are a different story and I'd feel confident go through with the deal. However , a missing CO for a bathroom is not a minor issue.