The Sale of Real Estate and Need for a Certificate of Occupancy

By: Patricia A. Kieck, Esq.

The State of New Jersey requires that before a closing on new construction can occur, the builder/seller must obtain a Certificate of Occupancy from the municipality wherein the property is located. N.J.S.A. 52:27D-133 et seq.

The situation is different for existing homes that are being resold. The State of New Jersey mandates that the seller of the property obtain a Certificate of Smoke Detector, Carbon Monoxide Detector and Fire Extinguisher. N.J.S.A. 52:27D-192 et seq. However, the State does not mandate that a seller obtain a Certificate of Occupancy or Certificate of Continuing Occupancy. Such a requirement is left to the jurisdiction of the municipality where the property is located. N.J.S.A. 52:27D-198.1 et seq.

Not every municipality in New Jersey requires the homeowner/seller to obtain a Certificate of Occupancy or Certificate of Continuing Occupancy, as it is sometimes referred to, on the resale of their property. In those municipalities that do require a Certificate of Occupancy or Certificate of Continuing Occupancy, it is governed by ordinance. The property owner must complete an application for an inspection and issuance of the Certificate. There is a fee for the application. N.J.A.C. 5:23-4.17. The purpose of the Certificate of Occupancy is to insure that the property upon the change of ownership is in compliance with the “laws and regulations relating to safety, healthfulness and upkeep of the premises…” N.J.S.A. 52:27D-198.2. Each municipality’s approach to enforcement varies. If there are violations, the owner is notified and the violations will have to be cured.

Whether or not the municipality requires a Certificate of Occupancy or a Certificate of Continuing Occupancy each homeowner must obtain a Certificate of Smoke Detector, Carbon Monoxide Detector and Fire Extinguisher.

Failure to obtain the Smoke Detector, Carbon Monoxide Detector, Fire Extinguisher and/or the Certificate of Occupancy or Certificate of Continuing Occupancy will subject the seller to a fine.

There have been situations where homeowners fail to obtain permits and approvals for improvements to their home. In most instances where municipalities do require a Certificate of Occupancy or Certificate of Continuing Occupancy on resale, this will be discovered and the homeowner will have to take action to correct this violation. New Jersey law requires construction permits to be obtained to construct, enlarge, renovate, alter, repair, among other things, the home. There are exceptions. N.J.A.C. 5:23-2.14. Even though the municipality you live in does not require a seller to obtain Certificate of Occupancy or Certificate of Continuing Occupancy for a resale, you are still required to obtain permit(s) and approval(s) for work done to their home as may be required by the state building code and/or municipal ordinance. The failure to do so, could adversely affect your sale.

The attorneys of Russo & Kieck law firm in Hackensack, New Jersey can assist you in your real estate transactions in Bergen, Passaic, Hudson and Essex Counties. If you are renting, buying or selling a home in Paramus, Teaneck, Midland Park, Englewood, Fort Lee, Rutherford, Paterson, Clifton, Wayne or any Northern New Jersey area, call 201-342-3100 to schedule a consultation.