What You Should Know About Act 133, An Important New Tool for Realtors®

In February, I received a call from a Realtor® handling a home sale in a Delaware County municipality. With the closing only 2 weeks away, the code inspector in the borough was withholding a use and occupancy (U&O) permit until the seller completed a list of repairs to the home. These repairs included a cracked sidewalk, missing handrails, and window maintenance.

The borough’s decision to withhold a U&O permit might have been hard to challenge in 2016.  In 2017, circumstances have changed for the better. Thanks to state legislation approved last year and implemented on Jan. 2, municipalities must now issue a permit allowing sales to move forward, regardless of the outcome of completed code inspections.

With the new law in hand, I contacted the township’s solicitor and explained the amendments that had taken place. To his credit, the solicitor listened carefully, reviewed the changes, and directed the borough to issue the permit. The sale went through on schedule. A happy ending!

Unfortunately, not every municipality is so willing to bring their inspection practices into compliance with the new state law, officially titled Act 133 of 2016. That’s where our services can make a difference for you and your clients. We’re here to help you understand the new law, take full advantage of it, and assist you when municipalities try to ignore it.

What Act 133 means to your clients:

• 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. There are three types of resale certificates: a normal U&O permit; a temporary U&O permit, allowing new owners to move in immediately and make repairs within 12 months; or a temporary access permit, a new type of permit allowing buyers of homes deemed “unfit for habitation” to access the building and make substantial repairs within 12 months.
• Municipalities can no longer demand escrow money in connection with resale code inspections that result in required repairs.
• The term “unfit for habitation” has been 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.

Call the Suburban Realtors® Alliance if:

• …your client is being denied a U&O permit or a temporary access permit. The municipality must provide one as long as they have been given an opportunity to inspect the home.
• …your client is being asked to provide escrow toward repairs on the home prior to the sale, as a condition of receiving a U&O permit.
• …a municipal official tells you that Act 133 does not apply to them for any reason.

Nearly every day, the Alliance staff hears from Realtors® experiencing one of the problems above, so we have experience resolving them. We always recommend that agents schedule inspections at least 30 days before the scheduled closing, to allow sufficient time to work through any code-related issues.

Please note that not all municipalities require point of sale inspections for U&O permits, but many in southeastern PA do.  

You can read more about Act 133 in the Issue Briefs section of our website, www.suburbanrealtorsalliance.com. To learn more about the various code inspections required in our four-county territory – including Chester, Delaware, Montgomery and Bucks – you can check out the SRA’s comprehensive Municipal Database at: http://www.suburbanrealtorsalliance.com/municipal-database/

(Photo: Governor Tom Wolf signs Act 133 of 2016, joined by Realtors® and legislators.)