Buildings with no certificate of occupancy

Who does this land on?

Buyers of pre-war townhouses and small multiple dwellings, their lenders, and sellers who have never had to prove the lawful use before.

What governs it?

• The Administrative Code, which requires a certificate of occupancy for buildings erected or altered after the requirement took effect
• The Department of Buildings practice of issuing a letter of no objection to confirm the lawful use of a building that predates the requirement
• The Zoning Resolution, which still governs what the building may be used for going forward
• The Multiple Dwelling Law and the Housing Maintenance Code where the building contains three or more dwelling units
• Lender and title requirements, which frequently ask for documentary proof of the lawful number of units

How does the process run?

1. Pull the Department of Buildings property profile and every certificate of occupancy in the record, including superseded ones
2. Where none exists, establish the construction date and confirm no later alteration triggered the requirement
3. Assemble the historical proof of the lawful use: old job filings, tax photographs, city directories, prior deeds and leases
4. Request a letter of no objection from the borough office, supported by that record
5. Where the actual occupancy exceeds what the record supports, treat it as a legalization question rather than a documentation question
6. Give the lender the letter early, because it is the document that most often holds up a commitment on an older building

Where does it bite in a transaction?

• A four-unit building is marketed as legal four-family and the record supports two
• A lender declines the file two weeks before closing for want of a certificate that will never exist
• A letter of no objection is requested after the contract signs, and the borough office timeline outruns the closing date
• An appraisal values rent from units the City has never recognized

What else should you read before you file or sign?