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Pennsylvania Act 133 of 2016

Act 133 states that a municipality may not withhold a use and occupancy certificate based on code violations found in a point of sale inspection.

Overview:

Act 133 of 2016 is a Pennsylvania law signed by Gov. Tom Wolf that changed the way local governments issue occupancy permits to homeowners.

[Click here to read the actual legislation.]

The act amended the Municipal Code & Ordinance Compliance Act, which was passed in 2000.

Why is Act 133 important for Realtors®?

About half of the townships and boroughs in the Philadelphia suburbs require a municipal code inspection before a home can be sold.

Before Act 133 took effect (on Jan. 2, 2017), municipal inspectors often refused to issue use and occupancy permits because of issues cited during point of sale inspections. This often led to settlements being delayed or canceled because sellers were unable to afford the repairs or complete them by the settlement date.

Now, under Act 133, municipalities must give the homeowner 12 months to resolve any violations found during the inspection, which allows the buyer and seller to negotiate who will perform and pay for the work.

Best practices for Realtors®

Determine whether the municipality requires a use and occupancy inspection. This information can be found quickly in our municipal database. About half of the municipalities in the Philadelphia suburbs require these inspections.
If an inspection is required by the municipality, schedule it at least 30 days before the closing. This gives the inspector ample time to visit the property, and if violations are found, it gives buyers and sellers time to negotiate over the repairs.

How did Act 133 change the law?

The legislation states the following:

Once a municipality has conducted a resale code inspection, it must issue a resale certificate (U&O) to allow real estate settlements to move forward. (One exception: if the property has outstanding code citations from prior to the U&O inspection.) There are three types of resale certificates:
- a normal U&O permit, allowing new owners to move in
- a temporary U&O permit, allowing new owners to move in immediately and make repairs within 12 months
- a temporary access permit, allowing buyers of homes deemed “unfit for habitation” to access the building (without residing in it), and make substantial repairs within 12 months
Municipalities can no longer demand escrow money as a condition of issuing use and occupancy permits.
The term “unfit for habitation” is more clearly defined to describe homes that are “dangerous or injurious to the health, safety or physical welfare of an occupant or the occupants of neighboring dwelling.” As a result, code inspectors can no longer deny a U&O permit due to minor issues such as missing house numbers.