Construction Liability Release Form for conditional certificate of occupancy permiti have closing on a newly constructed townhome later in july. last week the builder sent me a liability release form for township department of license and inspections stating the following "I/we hereby release and forever discharge the township license, inspections etc etc for any & all claims causes of action which we may have at the present or in the future for damages or injury arising out of township's failure to insist the property be completed in accordance with township building code and other regulations prior to its occupancy. I/we understand that township is not compelled to permit us to occupy until premises are completed but, in the interest of all concerned, township agrees to permit occupancy that private arrangements are being made between owner of new property and builder to assure premises will be completed. this paragraph applies to the entire project and not the individual dwelling units in this building"am told without this release i wont get occupancy certificate and that the release is for the entire building (which has 5 townhomes). the entire building is ready so am not sure why i need to sign this form or what's fishy here ?
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good evening. There is no reason in the world you should sign this release. You are entitled to insist that your townhomes is constructed in accordance with the building code and other regulations prior to occupancy. This is a problem for the builder, not you, and there is no reason you should take any risk for a problem that belongs to the builder. If the builder cannot get a certificate of occupancy, that's a problem for the builder to solve. If the does not, the builder is in default. If his were me, there is no way in the world I would sign this.
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is the certificate of occupancy provided for each unit (townhome) or the building - to me it would seem that each townhome would have its own certificate of occupancy.
There is typically a CO issued for each unit. If the builder defaults and doesn't voluntarily return your deposit, then you would be able to file a suit against him. Once the suit is filed and ajudgment awarded, you become a judgment creditor and can have thesheriff serve a summons on the losing party for a debtor examination. Thatforces the losing party to meet the judgment creditor in court and answerquestions under oath about the losing party's assets. After that information is obtained, the judgmentcreditor has the power to garnish wages (unless you are in Tx, SC, NC, or PA),attach bank accounts, and/or have the sheriff seize other property to satisfy the judgment.
And, don't let the builder make you the "bad" guy here; in any development it is the builder's responsibility to get the CO's. If something is amiss where the CO's cannot be obtained, then, it's the builder's problem, not yours.
i could'nt agree more - this document came as a surprise to me and i was asked to contact the township if needed stating that other homeowners had done the same and eventually signed it. Am sure its a sales tactic to take the easy way out.
It doesn't make any difference whether it applies to individual units or the entire builder, the builder needs to get the CO. This is totally not your responsibility and whether or not he intimidated the other buyers into signing this release is not relevant. The critical thing is to have the CO giving you assurance that the building and your unit was built per code. It doesn't make any difference what the builder promises you, if there is a problem later, you can pretty much count on him being long gone and judgment proof. Then, when you go to sell your unit, your buyer is going to insist upon a CO, you're not going to have one, and the township is going to point to their release. It'll be like musical chairs and if you sign this, when the music stops, you'll be left standing.
the builder says they have the certificate of occupancy for sure but since the project is not fully complete (some connecting roads are not fully built and a few buildings are not built yet); by signing the liability release form am not holding township responsible for unfinished items.
The CO for your building would be sufficient for your unit. The issue you have is that what happens if the roads are not completed and the builder heads to the hills? Then, you and the other unit holders are going to be looking at an assessment to build these roads. Before you agree to do this, I would make the builder escrow the money required to build the roads and other buildings so that if he doesn't complete them within a specified period of time, you and the other owners will have the money to cause them to be completed by another developer.
thanks for prompt response - really appreciate your assistance. the builder has indicated that township has them under bond money to ensure completion of the project. is that something i should get checked with the township or will the builder be able to provide a document stating the same ?
I would confirm with both the township and the surety company issuing the bond.
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