You just purchased your home in Davis, California. Congratulations! But you got a resale report notice at the close of escrow, what does that mean? According to the Resale Report, the seller of a property is required to provide to the prospective Purchaser of a property with a copy of the report created by a city inspector. The seller of the property is required to get this report prior to the selling of the property, and the report is good for 18 months from the date of the completed inspection unless either the sale or exchange occurs or the Seller completes the resale process and obtains a validated Certificate. If the Seller and the Purchaser decide to move forward with the transaction of the property the responsibility of obtaining the Certificate is transferred to the purchaser of the property and must be done so within 90 days of the close of escrow.
What might you find in the report? The report is divided into 4 sections. They are:
Section 1: Permits or Re-inspection
Section 2: Advisory
Section 3: Notes
Section 4: Inventory
Section 1 – Permits or Re-inspection will have the most pressing items, these are things where modifications to the property have been made that should have had a permit filed with the building department. These modifications need to be verified that proper and current building practices were used to complete the modifications. These include but are not limited to “Any additions, remodels, changes or replacement to the electrical, plumbing, or mechanical require a permit.” If a permit cannot be found with the city’s building department and verification of the building practices can not be easily ascertained by the inspector, this could become a very costly endeavor for the new home buyer. It could mean a planned remodel or renovation will have to be done, to redo the unpermitted work to bring everything, electrical, plumbing, and mechanical work up to current code. This can oftentimes mean things like backsplashes and cabinets need to be demoed and replaced when additional outlets, circuits, or ventilation are required to be put in the walls.
Some of the most common permit violations we see from clients are when a shower was retiled to bring it a more modern look or new cabinets were installed in a kitchen. These projects require permits and inspections by the city to maintain building integrity within the city limits. The items listed in this section are the items that are required to have a resale certificate to clear permit violations. One way to remedy these is to remove an item from the premises. This includes “any related plumbing, electrical, etc., is properly terminated at the source” and is verified by the Building Division.
Section 2 -Advisory. Items in this section are strongly recommended to be addressed or remedied. There is no reinspection required by the building department for these items. Items listed here are usually best practices but not necessarily building code violations. For example, we most often see things like “remove all electrical multi-adapters and extension cords,” and “provide or verify an approved, operable smoke/carbon monoxide detector with an audible alarm at all locations listed on the inventory sheet.” Again no reinspection of these items will be required.
Section 3 – Notes. “These are Notes to Buyer for informational purposes only. No work is required at this time of any item noted in the section.”
Here you will find a general placeholder and some notes specific to your property of things the inspector feels will be a good idea for you to keep an eye on, and to plan on fixing in the future. Often times they will let you know which codes they feel your property might need to pay attention to because the property has certain characteristics that might become a code issue. Chain link fences, retaining walls, etc. They will also give you places to look for information with regards to the areas that were previously called out for violations.
Section 4 – Inventory. This section catalogs the statistics and vitals of the property by room, area, interior, and exterior.
So how do you obtain the certificate? Regardless if you are the Seller or the Buyer, the steps to clear your resale certificate are the same. You’ll need to follow the instructions on the report or hire a licensed contractor to handle the report for you and obtain the permits and do the work to correct the issues as needed. Sometimes, these certificates are very easy and fast to clear. Other times, as stated before, for remodels or renovations that were done even just a couple of years ago, if they were not done with a permit, could result in a worst-case scenario a complete “gut” remodel so that the 1980s wiring that was not touched in the remodel can be updated and another circuit can be added to meet current electrical code. Things will largely depend on access and how wires or plumbing or both can be brought to where it needs to be.
This can and is oftentimes a very surprising thing for clients to hear. This surprising investment cost can sometimes make a new homeowner get a feeling of buyer’s remorse. That is why it is important to speak with a contractor during the purchasing process to find out how much it might cost to do these corrections to make sure they make sense. As a contractor, we don’t like to give bad news, I actually don’t know of anyone who really likes to give bad news. But sometimes we have to share with our clients that to remedy these issues, especially when there are several listed, that these costs aren’t just in the hundreds or thousands of dollars, but tens of thousands. Why so much? Because we are basically having to redo all the work but at today’s prices and today’s codes.
When you purchase a home, make sure your Realtor has a good relationship with local contractors, such as Hawley & Sons Construction, The Home Improvement Group, Morse Custom Homes and Remodeling or sure, even Black Lab Remodeling. Anyone of these contractors can help guide you through the process of getting the Resale Certificate completed and get you starting your new life in your new home.