Your custom house is completed and awaiting you to move in, but there are still several steps left to take in order for you to calmly start inhabiting it, the most important one being to get your certificate of occupancy and the mechanic’s lien releases. Therefore, it is not enough to finish the building tasks per se, you also have to prepare the house for the bank and local authorities inspection, especially if you are the beneficiary of a construction loan.
I. CERTIFICATE OF OCCUPANCY
The certificate of occupancy is an official document issued at the end of the custom house project which attests that your home meets all the structural and safety guidelines required by the local building code. It is released by the city or/and county building authorities after a thorough final inspection. It is not in minor deficiencies like workmanship, quality, or cosmetic issues such as paint, flooring, or window covering that the inspector is interested, but in the general result. Bare in mind that, apart from the final examination, these specialists visit one’s property regularly, throughout the entire span of the build, to inspect and sign off on the foundation, electrical, plumbing and other key components.
Usually, the big day of reviewing your home’s conformity with the standards is set a few days in advance of being ready. As a tip related to obtaining this certificate, you are recommended to walk the house with your contractor before the building inspector arrives and look at all the items which are to be examined. Thus, you can gain a clearer insight into how the procedure goes, check up on the contractor’s work and make some last adjustments, if necessary. In case you spot any defects, this is a good opportunity to detect them and ask the subs to fix them.
If the inspector is satisfied with your home’s compliance with the local building codes and requirements after the final review, he files the approval with the county or city. His signature of approval will determine the building department to issue the certificate of occupancy (C of O), document which gives you the go-ahead to move in. It practically ascertains that your house officially and legally exists and it is of great importance to your bank and tax assessors.
In case your home fails to impress the inspector and he doesn’t grant you an approval, there are two options for you:
- you call for another inspection after the contractor performs all the necessary tasks to meet the standards;
- ask the inspector to issue a temporary certificate of occupancy, which will allow you to move in while the necessary task are completed; this solution is particularly beneficial for the persons who have already sold the original home and scheduled moving trucks. However, the alternative might not be available in every area of the country, so you need to do some research in advance.
II. THE MECHANIC’S LIENS RELEASES
Once you receive your certificate of occupancy, the next thing to take care of is the possible liens that your subs can attach to your property if they are not paid for their services. These legally enforceable financial claims filed by your workmen can seriously put spokes in your wheels, so be careful to deal with them at the right moment.
Every time a particular task has been completed or a certain delivery of materials has been done to the property, the related sub or supplier issues a preliminary filling that functions as a notification on the respective aspect. These documents allow the contractor or the sub to file for their mechanic’s lien immediately if they are not paid. Since the entire project is structured on multiple tasks and materials will be delivered several times throughout the span of the build, make sure that these preliminary fillings do not pile up.
In order to prevent these forms from turning into mechanic’s liens, you have to obtain a lien release from each and every sub and supplier you have worked with. The releases are issued only if you pay for everything in agreement with the terms and conditions settled with the involved parties.
The optimal way to deal with this aspect is to try to pay your subs as regularly as possible so that you can collect these lien releases as you move through the process. If the contractor takes care of gathering them, ask for copies along the way and carefully file them in registers so that you can have the release at hand when needed.
Don’t underestimate the importance of such documents because they can affect your loan and finances. Hence, don’t create unnecessary disputes with your contractor and subs by withholding their funds. If possible, pay them first. Thus, you can clear the title on the property and later solve the potential disputes and misunderstandings.
In conclusion, the act of finishing a custom house project is based on a combination of action and paperwork. It is worth making an extra effort and dealing with all the small details at the right time, such as getting your certificate of occupancy and the mechanic’s lien releases, so that you can later enjoy full satisfaction when starting afresh in your new home.