Certificates of occupancy no guarantee of construction quality

After 19 years inspecting residential property, I have seen only a handful of certificates of occupancy for newly constructed homes. Many buyers expect such certificates to be guarantees of quality construction, only to find that these certificates cover nothing more than the most basic life-safety issues, or that they aren’t issued at all.

A certificate of occupancy generally is issued by a municipality’s building department to ensure that a newly built home is habitable. But in my experience, many municipalities in the Chicago metropolitan area frequently do not issue certificates of occupancy after new home construction.

Buyers expect these certificates, and some builders promote them as a kind of basic guarantee of construction quality in marketing and other materials. The fact that these certificates often are not issued in new homes and smaller multi-unit buildings, however, may not be as big a problem as some buyers think.

Why? Because certificates of occupancy for single-family new construction focus on major life-safety concerns (is the building going to fall down?) and significant health / safety risks. They do not focus on comfort or detail work.

Homeowners are sometimes persuaded to buy a home under the certificates of occupancy quality assurance umbrella builders present to them. In fact, only a bare minimum standard is applied to this certificate – if it’s even used.

We have had many clients over the years who have hired us to itemize new construction deficiencies that they thought should have been corrected before the building could be certified as habitable. A certificate of occupancy might offer the comfort that your home has the proper fire exits and walls that won’t collapse, but not much more.

In our experience, the buyer of a new home should anticipate an additional $5,000 to $10,000 – sometimes as much as $25,000 – worth of repair work to correct construction deficiencies.

Such a thought is sobering to most new-home buyers, many of whom choose new construction on the assumption that it will require no work for years. It’s a nice theory, but construction standards are just not being met by some builders, developers and subcontractors in the Chicago metropolitan area.

What are some typical problems? We routinely see paint jobs so poor, almost no buyer is willing to accept them. Sometimes the appliances are not fully connected; the air conditioning and heating plants don’t work properly; and hardwood floors are damaged or improperly finished, with jagged edges.

The problems vary widely, but not every builder is willing to address them. Properly painting walls that have only been primed – one typical deficiency – can cost a developer thousands of dollars. Many simply won’t do it unless you put some serious pressure on them to perform.

This is not to say that there are not excellent builders out there, willing to address legitimate buyer concerns. Many builders have excellent reputations that, in our experience, have been earned.

But buyers cannot take for granted that their builder is of the latter variety. It’s important to take control of the quality of your new home, enlisting the help of necessary professionals along the way. Do not expect a certificate of occupancy to protect you, and if you live in the Chicago area, don’t expect a certificate at all.

If you want your range to be operational or your clothes washer to work; if it’s important to have your interior walls three-coat painted, as is the standard, you need someone to represent your interests.

A good home inspector can help you identify a wide range of deficiencies – some of which may not be obvious until you’re living in a new home – and unfortunately, an attorney might be necessary if a builder resists addressing problems.

Most of the deficiencies we find do not affect life-safety or habitability in the new homes we inspect, but we do routinely discover thousands of dollars in construction problems in brand new homes that buyers expected to be complete when they turned the key.

Thomas Corbett is president of Tomacor, Inc. a professional property consulting company specializing in commercial and residential property inspections and expert witness work.

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