In this article, you will learn…
- How important home inspections are,
- The options available if any issues arise during inspection, and
- Where to go to obtain documents when buying or selling property.
How Important Are Home Inspections For Residential & Commercial Property Before You’re Buying Or Selling In New York? And Does It Usually Happen?
Inspections are normally only done by the purchaser who’s going to buy the property. You want to do an inspection to make sure that what you’re paying for the property is appropriate based on the actual condition of the property.
There are two different aspects:
- Residential property
- Commercial property
With residential property, you’re going to do the inspection before you go to contract because in most residential transactions, attorneys don’t want to draft up a contract only to find out after an inspection that the property is a total disaster. You want to find out if you even want to move forward with the contract and if there are significant things that have to be included in the contract of sale.
When the inspection is done prior to contract, you can talk to the sellers or their realtors and tell tem what issues there are. The sellers then have the opportunity to fix the issues. They have three options…
- Lose the buyer,
- Fix the issues prior to closing, or
- Reduce the purchase price by a certain amount so that the buyer can fix it.
As the purchaser, deciding to have the purchase price reduced is a big decision. You might want to talk to your attorney about the risks of taking that path. An attorney will have experience in these things to help determine whether or not it would be best to have it taken care of by the seller.
When dealing with a commercial property, the inspection process is very different. A commercial property’s funds are going to go to contract first and you’re going to have a set period of time to do due diligence and part of the due diligence would be to have the engineer’s report done.
Another thing with commercial that differs from residential is that you’re also going to have to do the “environment search”. In addition to ensuring that the building is properly built and everything works without any leaks or damage, you need to ensure that there are no environmental hazards or issues.
When doing financing on a commercial property, the bank is going to require that there are environmentals done. There are one, two, and three phases of environmentals. The environmentals are done in phases and you only want to pay for the ones you need, and in many cases a Seller will only allow a phase one to be done.
Most properties only need a phase one environmental, and that’s a very mild look at the property’s environmental history and use prior. These are things for office buildings and similar. They just make sure that it wasn’t used to store chemicals or something that causes environmental hazard.
Something like a manufacturing building may require a phase two environmental, where they’re going to do phase one first and then stage two. Phase two would make sure that there were no environmental issues during the manufacturing process.
So, all of this is why it’s very important to get your inspection and, if needed, your environmentals.
Where Can I Get Copies Of Deeds And Other Documents Relating To Property? And Why Are These Documents Important To Have On-Hand Before And During The Purchase Of Real Estate?
Normally, you can get copies of any deeds and other documents at the county clerk’s office. However, Suffolk County’s servers were hacked and this has caused a shutdown of that system. Due to this, it has become more difficult to get those documents from the county clerk’s office.
You can also get some documents related to the property from the town that you happen to be in. They would have copies of any certificates of occupancy or violations of the property.
You can also always try to get documents from the title company. The title company will conduct a title search and get these documents for you.
If you are the seller, you should have most of the documents about the property from when you purchased it. If you’ve done any improvements or anything to the property, hopefully you’ve kept all of those documents.
We always send people a notice of what documents they should get together when they are going to buy or sell a property. These documents may include…
- Certificates of occupancy,
- Certificates of compliance,
- Documents pertaining to any changes to the property,
- Old Deed,
- Tax bill,
- Mortgage statements, and
- The survey.
We want to try to get all of those documents together from the seller’s viewpoint because the more we can give the buyer ahead of time, the more it saves you later on when the title company does the search if things are missing.
One of the best things that you could provide to your attorney is your owner’s title policy when you bought the property. That would take care of a lot of exceptions that may arise when you’re selling the property that the purchaser’s attorney is going to raise as to any issues with the property. If you have your owner’s policy, it can take care of pretty much 90% of those issues.
Some of the issues that come up are the things that you may have done to the property subsequent to buying. One of the biggest and most common issues we come across is that someone will have put up a fence that is over the property line. This creates an exception in the title, an out-of-possession problem.
So, we need to know all those things. We need to know if the home has oil or gas heat. We need to know if you get your water from the city or a well. These are all things that the seller’s attorney needs to know to provide as much as he can to the buyer’s attorney.
On the buyer’s side, if the contract doesn’t have any of those things in it, it’s up to them or their attorney to find out where they can get most of those items. We’re never going to get the title policy that the person had, but most other items can be obtained through the title company or some other source.
With the guidance of a skilled attorney for Real Estate Law Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy.