Tip 17-2011: Septic Permit, Certificate of Occupancy & Number of Bedrooms

(Septic Permit, Certificate of Occupancy and Number of Bedrooms)  When a septic permit for a new house is issued by the local Health Department, it specifies the number of bedrooms approved for the septic system.  This information is also given to the local governmental office issuing the Certificate of Occupancy (CO).  Sometimes even the CO states the number of authorized bedrooms.

The local jurisdiction will normally allow for maximum occupancy of two persons for each approved bedroom.  For example, a three bedroom house can be occupied by no more than six persons.

What happens if the fourth bedroom is listed as a “study” in a three bedroom approved house?  The initial homeowner should check the building permit, septic permit and/or CO to verify the number of approved bedrooms and maximum number of persons who can occupy the house. 

But then what happens, if on resale, everyone forgets that the fourth bedroom is really a study or the homeowner has added a bedroom and bath in the basement without increasing the septic field?  Unfortunately no one usually checks the old CO or septic permit (assuming one is available) to verify the number of approved bedrooms. 

There is no easy solution to these problems. The best solution is to avoid the problem all together.  Builders should build the correct sized septic system based on the actual number of bedrooms.  Realtors, Purchasers and Settlement Agents could exchange information on the number of bedrooms in the new house, and the number of bedrooms approved for the septic permit and CO.  Homeowners should not finish the basement and add a guest bedroom without, if required, increasing the size of the septic field.  The main point of this Tip is just to be aware of the problem.

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 16-2011: Short Sales, Listings, Realtors & BPOs

(Short Sales, Listings, Realtors and BPOs) Listing Realtors in a “short Sale” take on tremendous responsibility and extra work.  One of the most important jobs they can perform for a successful short sale is to actively participate in the BPO (Broker Price Opinion).  Once there is a fully ratified contract (executed between Buyer and Seller and waiting for short sale lender approval), the realtor should remove the lock box from the house.

By removing the lock box, the realtor or appraiser performing the BPO has to make arrangements to meet the Listing Realtor at the house in order to obtain access for the BPO.  At the BPO appointment bring the BPO realtor or appraiser documentation to support the short sale contract price.  Relevant comps, current similar listings, marketing history, days on the market, price reductions and number of showings are all information which supports the contract price.  If the Buyer’s inspection revealed serious problems, provide a list of the deficiencies or repair items.  Finally, a copy of the ratified contract can be extremely important.  Have copies of everything available to give to the BPO realtor or appraiser.

The goal is to make the PBO realtor or appraiser’s job easier and by doing so, provide supporting documentation for the current contract price.  This is one of the most important opportunities the Listing Realtor has to affect the success of the short sale.

Be proactive and participate in the BPO.  Remember, an unrealistically high BPO is usually a death sentence for a short sale.

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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