Fire Code and Building Code

[Mpowered1]

We are in the middle of buying our first investment, a 4-plex. The bank wants the lawyer to confirm that the building conforms to the Fire code and Building code regulations for a fourplex. She says that it is standard practice for the Lawyer. We need to get that sorted before we can waive the last of our conditions, namely financing. I believe First Canadian Title will accept a record search for the Fire code, looking for any outstanding issues I guess. Is it the same for the building code? We have already had a building inspector through and the appraiser from the bank. Most brand new houses couldn`t pass building code so I not sure what the bank is looking for. I would hate for the deal to fall through at this late stage in the game. Any thoughts from some more experienced investors?

Gary

 

[tahani]

QUOTE (Mpowered1 @ Jan 4 2010, 08:52 PM) We are in the middle of buying our first investment, a 4-plex. The bank wants the lawyer to confirm that the building conforms to the Fire code and Building code regulations for a fourplex. She says that it is standard practice for the Lawyer. We need to get that sorted before we can waive the last of our conditions, namely financing. I believe First Canadian Title will accept a record search for the Fire code, looking for any outstanding issues I guess. Is it the same for the building code? We have already had a building inspector through and the appraiser from the bank. Most brand new houses couldn`t pass building code so I not sure what the bank is looking for. I would hate for the deal to fall through at this late stage in the game. Any thoughts from some more experienced investors?

Gary

When buying a 4plex your agent should have a clause in the offer that its conditional on Fire code and building Reg inspections. this is common and this is the importance of having the right agent representing you. what i would suggest is going back to your agent and ask him/her to get an extension and go do both. its so important for you as you don`t need more expenses after waiving conditions.

tahani

 

[Mpowered1]

It`s actually a private sale so no realtor is involved. Maybe that`s why the bank wants these confirmed. We have had talks with the Fire Dept. and since there is no common area, their is nothing to inspect according to the code they say. Each unit has it`s own entrance. Depending on how you read the Fire code all it might need are interconnecting smoke alarms. As far as the Building code, it does need work, but what property that novice investors can afford dosen`t need something. We have had a very thorough Inspector go through and highlight any concerns. Would it pass todays building code, probably not, my 7 year old house wouldn`t pass. How do you decide if the property is worth the future expenses that it might inccur. Right now the financials look good, their is a decent profit every month but where do you draw the line at the amount of repairs that might be needed. Thanks for the info.

Gary

 

[jeffjas]

QUOTE (Mpowered1 @ Jan 4 2010, 07:52 PM) We are in the middle of buying our first investment, a 4-plex. The bank wants the lawyer to confirm that the building conforms to the Fire code and Building code regulations for a fourplex. She says that it is standard practice for the Lawyer. We need to get that sorted before we can waive the last of our conditions, namely financing. I believe First Canadian Title will accept a record search for the Fire code, looking for any outstanding issues I guess. Is it the same for the building code? We have already had a building inspector through and the appraiser from the bank. Most brand new houses couldn`t pass building code so I not sure what the bank is looking for. I would hate for the deal to fall through at this late stage in the game. Any thoughts from some more experienced investors?

Gary

I`d say that your financing condition (which relies on satisfactory fire and building code inspections) covers you in case there is a deficiency in either of those requirements and the deficiency is so great that it makes you walk away from the deal. In fact it could put you in a better negotiating position.

In most cases the lawyer checks with the local Fire Dept to ensure there are no outstanding violations that exist, and same goes for the buiding code (check with City`s Building & Permit Dept.) If there were outstanding workorders from the Fire Dept or local municipality for deficiencies, then they would have to be addressed first before the bank agrees to forward you the mortgage funds. The bank is just trying to ensure that the property is zoned for a 4-plex and not a duplex that was converted, no illegal suites, each has its own ingress & egress, etc.

I highly doubt a building inspector from your municipality would actually view the property for this purpose unless someone makes a complaint about the saftey or condition about the property itself, which does not seem to be the case.

I say congratulations and hope you close the deal !

 

[housingrental]

Hi Gary

You want to get an inspection done from the electrical safety authority

You want to get a separate inspection done from the fire department of the entire building - ie suites too not just common area

You want to receive no deficiency letters from both