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Can I Sell a House with Code Violations? Tips for Addressing Property Issues 

When you decide to sell your house, you want the process to go as smoothly as possible. However, if your property has code violations, you may run into complications during the sale. Code violations can range from minor issues to more serious safety and health hazards. So, can you still sell a house with open code violations? And what can you do to address them beforehand? 

What Are Property Code Violations? 

Local municipal codes set construction, repair, and maintenance standards for properties within that jurisdiction. Property owners must follow these regulations. Code violations occur when a home fails to meet the established standards. 

Common residential code violations include: 

  • Structural issues – deteriorated walls, ceilings, foundations, etc. 
  • Faulty electrical wiring 
  • Plumbing problems like improper drainage or leaks 
  • Heating and HVAC problems 
  • Issues with porches, stairs, handrails, etc. 
  • Fire hazards 
  • Mold or moisture damage 
  • Rodent/insect infestations 
  • Chipped paint dust (lead paint hazard) 
  • Too much clutter or unsanitary conditions 
  • Zoning noncompliance – additions without permits, illegal conversions, etc. 

Many areas also have housing codes with requirements related to safety, occupancy, and livability conditions. Violations here may involve things like smoke detector issues, broken windows, or pest infestations. 

What Happens If You Try to Sell a House with Code Violations? 

It is possible to sell a home with outstanding code violations in some cases. However, open violations will complicate the sale process and may prevent transferring clear title. There are a few things that can happen if you sell a property with unaddressed code issues: 

  • Buyer backs out – Many buyers will not purchase homes with significant code issues due to liability concerns, move-in delays, and not wanting to deal with repairs. Minor violations may not deter buyers as much. 
  • Repair costs deducted from sale price – The buyer may ask escrow funds at closing to pay for correcting code violations after the sale. The repair costs get deducted from the negotiated home price. 
  • Required repairs before closing – Especially with FHA loans, lenders will not approve financing without proof that sellers fixed major code issues ahead of closing. 
  • Can’t obtain occupancy permit – The local permitting office may refuse to issue an occupancy permit if outstanding violations impact health and safety. Without this, buyers often can’t get financing or insurance. 
  • Cloudy title concerns – Title companies also worry about liability from unaddressed code issues on sold properties. They may refuse to insure title on the home sale. 

Ultimately, unresolved code violations introduce uncertainty and delays into real estate transactions. They can stall or completely torpedo purchase agreements. Sellers often must address at least major code problems before properties can transfer ownership. 

Tips for Selling a House with Code Violations 

Here are some tips for sellers with properties that have open code violations: 

  1. Review violation notices carefully 

Make sure you understand what housing code or building code standards your property violates. Review the citations closely so you know what repairs are necessary to come into compliance. This will help you create your corrective action plan. 

  1. Hire contractors for cost estimates 

Bring in professionals to inspect your home further and provide written estimates for addressing code issues. You’ll need these for negotiations if selling the property as-is. Estimates also help you weigh the costs vs. benefits of making repairs beforehand. 

  1. Offer sale contingencies 

If buyers agree to take the property with violations, make contingencies for inspections, repairs, and occupancy approvals within the purchase contract. This transfers responsibilities to the buyer but gives you less control over the transaction. 

  1. Repair issues before listing when possible 

Making fixes ahead of listing often leads to better sale outcomes. But focus on major safety issues first when funds are limited. Cosmetic repairs may not impact the occupancy permit as much as faulty electrical, structural damage, etc. 

  1. Seek variance for grandfathered noncompliance 

If code violations resulted from changed regulations or ordinances, seek legal variances where possible to grandfather your existing structures. This may resolve compliance issues. 

  1. Offer buyer incentives 

Offering price reductions or helping funding repairs sweetens the deal for buyers. Consider offering closing cost assistance or home warranties to offset risks from violations. But get legal advice before finalizing. 

  1. Disclose everything 

Always fully disclose all known property code violations and make no misrepresentations during sale negotiations. Transparency builds trust with buyers and prevents lawsuits down the road. 

  1. Consult real estate attorneys 

An experienced real estate lawyer can help craft your property listing disclosures and purchase agreements in ways that balance risks for both buyers and sellers. This increases the odds of a successful sale. 

Which Code Violations Must Sellers Fix Before Selling? 

Sellers don’t necessarily need to correct all code violations before listing their home. Minor issues likely won’t delay sales as much. But certain problems will almost always require repairs first, including: 

  • Structural damage – Buyers will walk away from properties with severely compromised structural integrity. These present safety risks and often lead to very costly repairs down the road. They must get addressed. 
  • Major electrical issues – Faulty electrical wiring can cause fires and electrocution risks. Electrical code issues may also limit insurance coverage later. Bad electrical typically requires seller repairs ahead of listing. 
  • Failed septic systems – Septic issues can lead to sewage backups and contamination risks. Most buyers shy away from homes with failed septic systems given the potential five-figure repair costs too. 
  • Roof leaks/water damage – Evidence of prior water leaks or moisture intrusion will set off red flags with buyers. They’ll assume mold risks and deeper damage if roofs aren’t fixed beforehand. 

In addition, any code issues that directly impact occupancy permits will likely stall closings until sellers make repairs. Safety-related housing code violations may also deter buyers and prevent financing. 

Can I Give My House Away with Code Violations? 

Transferring property titles gets complicated when open code violations exist, even for free transfers between family members. The new owners take on risks and repair duties once they gain control of violation-plagued homes. 

Many municipalities do not issue new occupancy permits without prior fixes either. Title insurers also worry about liability from unaddressed safety hazards and structural damage on gifted properties. 

As such, the same barriers mentioned earlier can stall real estate transfers even for house gifts and property inheritances. In most cases, receivers of houses with violations may delay recording deeds until they make necessary repairs. 

That said, all parties can draft contingencies and repair cost responsibilities into the title transfer documents beforehand. There are just extra legal considerations around timeline delays, occupancy restrictions, and repair duties based on the specific property code issues involved. 

What Code Violations Do Home Inspectors Check For? 

During pre-purchase home inspections, inspectors check for defects and deficiencies related to building codes as well as safety issues covered by housing codes. Exact standards depend on local ordinances, but inspectors commonly look for problems like: 

Building code inspection items: 

  • Structural integrity – foundation, wall, roof, etc. issues 
  • Electrical – exposed wires, grounded outlets, circuit panel problems 
  • Plumbing – leaks, water pressure, proper drainage 
  • HVAC – cracked heat exchangers, duct issues 
  • Ventilation/insulation – attic and crawlspace areas 
  • Fire separation – walls, floors, doors 

Housing code inspection items: 

  • Smoke/CO detectors absent or non-working 
  • Broken windows/doors – security risks 
  • Handrail problems with stairs, porches 
  • Electrical hazards – overloaded circuits, reverse polarity, open grounds 
  • Leaks, water damage, potential mold issues 
  • Pest infestations affecting livability 

While home inspectors don’t issue actual code citations, they will flag deficiencies against local standards in their reports. Buyers can use these inspection results to request repairs from sellers or build repair allowances into purchase offers. 

Can I Get Financing for a House with Code Violations? 

Getting a mortgage on a home with open code citations will prove very difficult, especially through traditional institutional lenders. Here are some key financing challenges sellers face: 

  • Appraisal issues – Appraisers must consider repair needs from violations when valuing homes. This lowers appraised values. 
  • Higher lending rates/fees – If financing is available at all, lenders charge higher interest rates plus extra fees to take on added risks. 
  • Lower loan eligibility – Repair deductions from appraisals mean sellers may not qualify for enough financing to cover purchase prices. 
  • Repair requirements – Many lenders require completed repairs ahead of closing as a funding contingency. This causes lengthy delays. 
  • Inability to occupy – Code issues that prohibit occupancy permits also prevent financing approvals. 

Given these obstacles, sellers should avoid relying on buyer financing offers when selling properties with unresolved code problems. Instead, they will likely need to accept cash offers or get very creative with carrying back owner financing themselves around contingencies for repairs/approvals after closing. 

Selling Homes “As-Is” with Code Violations 

When trying to sell homes with property code issues, listing them “as-is” transparently communicates known problems upfront versus hiding defects until inspections. This empowers buyers to offer prices reflecting true conditions. 

However, as-is purchases still depend on informed buyer consent with contingencies built into sales contracts around: 

  • Home inspections noticing all issues 
  • Responsibilities for future repairs 
  • Inability to occupy until repairs complete 
  • Timeframes for corrections after closing 
  • Price adjustments if problems prove more extensive 
  • Flexibility addressing problems post-sale 

Without carefully crafted contingency plans, as-is houses may never make it to closing due to hurdles transferring occupancy rights and financing based on conditions. So, while selling as-is discloses code issues upfront, sellers should still prepare backup plans if buyers walk once seeing violations. 

Selling Homes to Real Estate Investors 

When selling properties with major code deficiencies, one alternative involves investors specializing in distressed homes and fixer-uppers. Real estate investors possess the expertise to accurately estimate repair costs plus the funding to fix issues. We buy houses for cash Rochester and provide assistance to homeowners in need.  

Just know that investors must buy homes at below market prices – sometimes 50% or less of normal values – to leave room for their own profit margins after repairs. However their flexible terms and speed often work best for sellers in difficult situations with houses containing multiple violations. We buy houses Rochester at reasonable prices. Our team will make sure that you are getting the best possible deal for your house at the end of the day. 

Summing Up  

Selling homes with outstanding code issues ranges from inconvenient to impossible depending on the severity and type of violations involved. Minor problems may not delay sales much if all other home systems work fine. But structural damage, major safety hazards, and repairs needed before obtaining occupancy permits present significant barriers towards closing on transactions. 

As such, sellers have a few options when dealing with code-deficient properties: 

  1. Make enough repairs to satisfy permitting office requirements before listing 
  1. Offer buyer incentives and contingencies for repairs/approvals after closing 
  1. Seek variances if violations resulted from changing regulations 
  1. Disclose all fully and market properties realistically as-is 
  1. Consult attorneys to craft solid contingency strategies into contracts 
  1. Consider cash-focused investors for quick sales despite major issues 

With the right plans in place around flexibility, transparency, and backups should sales fall through, selling houses with even extensive code citations remains possible, especially in hot real estate markets. Just focus on safety repairs first while managing buyer expectations surrounding non-critical maintenance items. 

We Can Help You Sell Your House Fast  

Are you looking for a convenient and hassle-free way to sell your house fast? Then you should contact us at We Buy Any House As Is. We buy houses New York, regardless of code violations as well. As experts in buying house in New York, our team will provide you with the best possible deal.  

Businesses like ours cater to motivated sellers needing to offload burdensome properties with problems. We buy as-is to rehab later for resale or rental income.  

As quick-close cash buyers, we skip lengthy showings, offers, and financing. Instead, we make fair cash offers after inspecting the property issues. This allows much faster exits for sellers facing code citations. Since we buy houses Rochester NY without a hassle, you can connect with us and sell your home in the most convenient way possible. 

We buy houses for cash New York. If there is an urgent need to sell your house, feel free to get in touch with us today!