Q. My husband and I bought a single room occupancy building with plans to convert it to a two-family home. After about a year of renovations, we applied for a certificate of occupancy inspection, which turned up an outstanding $1,000 boiler violation from the 1990s, which we paid. Follow-up inspections found open permits and Buildings Department violations that predate our purchase, totaling about $50,000 in repairs and fines. Shouldn’t the title company or the lawyer have caught these issues during the buying process? Do we have any recourse?
A. Changing the certificate of occupancy for any property is complicated, and single room occupancies, or S.R.O.’s, are notoriously troublesome. “S.R.O.’s are often, if not typically, poorly managed properties with many violations and deferred maintenance issues,” said David A. Kaminsky, a Manhattan real estate lawyer. The owner must also obtain a “certificate of no harassment of the tenants” from the city before starting renovations, which can take months.
It would have helped if your lawyer had explained the challenges and risks involved. Most contracts specifically state that the buyer will accept title subject to existing violations, so lawyers generally recommend a violation or permit search. If your lawyer did not do that, you may have a claim against him or her.