Closing Loose Ends on New Construction Home Purchase During a Pandemic
When all business activities temporarily ceased in March of 2020 due to COVID-19, we were approached by two of our clients, a married couple under contract to purchase a newly constructed home in the Graduate Hospital neighborhood of Philadelphia. After they chose us to represent them, we had to figure out how to overcome several obstacles holding them back from closing the purchase of their first home.
The seller from whom they had purchased the home had received verbal assurance from the city that the newly-constructed home had passed its final inspection on the day before the COVID-19 shutdown, and that a certificate of occupancy would be issued the following day. Because of the shutdown, the seller was unable to obtain the certificate of occupancy and struggled to reach the property inspector and find out how they could do so.
That was when we stepped in. Through our efforts and know-how, we tracked down and located the property inspector. Next, we reached out to them, inquired about the property, then requested (and received) a copy of the certificate of occupancy.
However, there was a concern when we noticed that there was no indication of the real estate tax abatement, which was applied by the seller for the substantial property improvements, actually being granted by the city government. Our clients agreed to purchase this property contingent on a real estate tax abatement being implemented with the property improvements. If the governmental application were approved, our clients would easily save over $50,000 in real estate taxes over the course of the abatement period. It was thus imperative that we confirmed that the application had been approved prior to the closing taking place.
Due to the fact that we have handled, and continue to handle, many property tax abatement applications for our real estate developer clients, we know exactly who processes these governmental applications. We reached out to the governmental worker via email and received a prompt response. She immediately advised us that the city had in fact approved the application.
The last obstacle to overcome was representing the buyers at closing. Due to the COVID-19 restrictions at the time, we were unable to physically attend the closing. Instead, we received all the closing documents that our clients had to execute at closing via email. We then reviewed each and every closing document with our clients over a telephone call. While taking this call, they were in a conference room at the title insurance company’s office.
Our happy clients have since moved into their new home and are extremely satisfied that they were able to close on this home purchase under these very complex circumstances.
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