The Challenge
Prior to the COVID-19 shutdown, the seller had received verbal assurance from the city that the property passed its final inspection and that a certificate of occupancy would be issued the following day. Once business operations temporarily ceased due to the pandemic, however, the seller was unable to obtain the certificate or contact the property inspector regarding its status.
At the same time, Nochumson P.C. identified an additional issue involving the property’s real estate tax abatement. The clients had agreed to purchase the property contingent upon approval of the tax abatement application, which would save them more than $50,000 in real estate taxes over the course of the abatement period. Confirmation of the application’s approval was critical before the transaction could proceed to closing.
COVID-19 restrictions also created logistical complications for the closing itself, preventing in-person representation at settlement.
The Solution
Nochumson P.C. worked to locate and communicate directly with the property inspector responsible for the final inspection and certificate of occupancy. Through those efforts, the firm secured a copy of the certificate necessary for closing.
Because Nochumson P.C. regularly handles property tax abatement matters for developer clients, the firm was also able to identify and contact the appropriate governmental employee responsible for processing the tax abatement application. Shortly thereafter, the city confirmed that the application had been approved.
Due to pandemic-related restrictions, Nochumson P.C. then coordinated a remote closing process by reviewing the closing documents with the clients over a telephone conference while the clients executed the documents at the title company’s office.
Real estate tax abatements and certificate of occupancy issues can significantly impact the timing and financial structure of a new construction transaction if not confirmed prior to closing.
The Results
Nochumson P.C. successfully guided the transaction through closing despite the unprecedented challenges caused by the COVID-19 shutdown.
The clients ultimately closed on the purchase of their first home, secured the benefit of the approved tax abatement, and moved into their newly constructed property in Philadelphia.
