New CT Smoke & Carbon Monoxide Detector Law Is Creating Closing Problems

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149
https://activerain.com/droplet/4mVg

Connecticut adopt a new Smoke & Carbon Monoxide Detector Law on January 1, 2014.  The law was past with good intentions, but like anything else no matter what the intention is if it isn't thoroughly thought out it creates issue.  That is the case with Connecticut's new Smoke & Carbon Monoxide Detector Law, because it is obvious those who created and passed this legislation do not have knowledge of Lending Guidelines, and the Closing process.  As a result the New CT Smoke & Carbon Monoxide Detector Law Is Creating Closing Problems. 

The law in of itself seems Innocent enough, for example the new law:

  • Applies to any residential property designed to be occupied by 1-2 family built prior to October 1, 2005.  These properties must have both a smoke and carbon monoxide detector.
  • Homes built prior to October 1, 2005 are already required to have smoke and carbon monoxide detectors hardwired in the home.
  • Detectors may be battery operated instead of hardwired, unless the building code when the house was built required the smoke and carbon monoxide detectors to be hardwired.  For example homes built on or after October 1, 1985 are required to have hardwired smoke detectors here in CT,  and homes built on or after October 1, 2005 are required to have smoke and carbon monoxide detectors hardwired.
  • All carbon monoxide detectors must have the capability of displaying the carbon monoxide concentration in parts per million (digital readout).
  • All smoke and carbon monoxide detectors must must have the capability of producing a warning alarm.
  • Smoke and carbon monoxide detectors must be installed per manufacture's instructions.
  • For homes constructed prior to the dates smoke and carbon monoxide detectors were required by building code, need to have the proper number of battery operated smoke and carbon monoxide detectors instructed by the manufacturer, as well as the placement of the detectors.

All of the above seems pretty straight forward.  However, the Closing problems this new Smoke & Carbon Monoxide Detector Law is creating is because of the next set part of the law:

  • Seller will be asked to sign an affidavit and swear under oath at the Closing the property is equipt with smoke and carbon monoxide detectors, and that they are in working order at the time of the Closing.
  • The oath must be given, and notarized by a Notary or Attorney at the Closing.
  • If the Seller does not want to provide an affidavit, the Seller must then provide the Buyer with a $250 credit towards the purchase of the house house at Closing.

Attorneys have been advised by the Connecticut Bar Association to tell Sellers they are representing to not sign the affidavit, and to credit the Buyer with $250.  This in of itself does not necessarily present a problem.  The problem is with the Seller making the choice of signing the affidavit or providing the $250 credit at Closing.

If the Seller follows the Attorneys advice, which they are sure to do, a NEW HUD-1 needs to be drawn up.  This means the Closing will be held up until a HUD-1 is amended to reflect the $250, and the Lender has had the opportunity to review the NEW HUD-1 and approve it.

Further, more if the Seller is already providing the Buyer with Seller Paid Closing Costs, an even bigger problem may arise if the Seller is already providing the maximum contribution.  The Buyer does not have an option to waive the $250 credit, so most likely the Sales Contract would have to be amended to reduce the original Seller Paid Closing Cost by $250.  This new law has only been in place for approximately 5 weeks, and New CT Smoke & Carbon Monoxide Detector Law Is Already Creating Closing ProblemsDelayed Closings could also result in Interest Rate expirations resulting in even more Closing Costs.

The law needs to be amended to allow for the affidavit to be signed or the $250 credit to be given well before the Closing so that the HUD-1 and all other Closing Documents are correct, and reviewed before the Closing.  If the Connecticut State Legislators do not take action on this soon, there will be many very unhappy Sellers and Buyers until they do.

 

******************************************************************************

 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Posted by

******************************************************************************

 

 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

close

Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 02/17/2014 07:54 PM
Topic:
Mortgage / Finance
Location:
Connecticut
Groups:
Realtors®
Mortgages
1st Time Buyers
Real Estate Rookie
Tags:
closing problems

Spam prevention
Show All Comments
Rainmaker
1,331,470
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Rules, paperwork, fines, fees, argh!   Perhaps we should go back to handshakes.

Feb 17, 2014 09:56 PM #15
Rainmaker
2,379,330
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This came up the other day and it can be like a fly bothering everyone in the room...Its the appraiser who will turn you in. Other than that, if buyer and seller work it out, who is the wiser?

Feb 17, 2014 10:16 PM #16
Ambassador
1,436,160
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Maryland adopted a new smoke and carbon monoxide detector law last year, and it's still confusing buyers and sellers as to what the actual requirements are.

Feb 17, 2014 10:22 PM #17
Rainmaker
720,479
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good morning and this is some great Info,  Keep up the good work and good luck in 2014,  E

Feb 17, 2014 10:33 PM #18
Rainmaker
720,479
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good morning and this is some great Info,  Keep up the good work and good luck in 2014,  E

Feb 17, 2014 10:33 PM #19
Rainmaker
720,479
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good morning and this is some great Info,  Keep up the good work and good luck in 2014,  E

Feb 17, 2014 10:33 PM #20
Rainmaker
448,487
Drick Ward
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

Thanks for the info!

 

Feb 18, 2014 12:04 AM #21
Rainmaker
350,438
ReadySetLoan Condo Approval Team
ReadySetLoan Condo Team LLC - South Windsor, CT
The FHA/VA Condo Project Approval Specialists

Woo hoo!!  Look out - government at work!  Will there be no end to the problems caused by government?  The more it tries to help, the more it screws things up.

Feb 18, 2014 12:13 AM #22
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Our CO law has been in place for a while now. At first everyone forgot about the "new" law until the last minute. Appraisers are marking in their reports for both smoke and CO detectors. There are fines for the seller not having CO detectors installed, but I've yet to hear anyone getting fined for not having them. 

Feb 18, 2014 12:14 AM #23
Rainmaker
626,897
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

If this is the law wouldn't a home inspection examine this and determine if the property is up to code. If Necessary wouldn't a seller just replace the detectors.

Feb 18, 2014 12:25 AM #24
Rainmaker
2,810,100
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

We went through this some years ago, George. It's become pretty much a non-issue now. You'll get there as well.

Feb 18, 2014 12:56 AM #25
Ambassador
2,719,592
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi George - I can see where that would cause a problem. Our law requires them, and our practice is to make sure they're installed before we list the home, but that's as far as it goes here - no affadavit or sworn testimony and no credit - although the least expensive ones only cost about $20 each.

Feb 18, 2014 02:36 AM #26
Rainmaker
2,154,165
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Are the lawyers worried that if the home later burns down and the investigation points to a broken smoke detector that the insurance company will look at the previous sellers? We don't have any requirements for promises / notarized statements regarding carbon monoxide detectors in California. We have to have one on each floor to get a loan, but the enforecement is pretty lax.

Feb 18, 2014 03:48 AM #27
Rainmaker
835,838
Barbara Altieri
RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

George -- Not thought through per usual. However, I  know that a lot of agents are not even aware of the new law. Good idea on the amendment.

Feb 18, 2014 06:27 AM #28
Rainer
211,241
Jack O'Neal
Conway Real Estate - Gilbert, AZ

Hi George!  Glad to hear there's amendments for the new law in CT!  All homes need to have this kind of alarm in their houses or facilities of business!  It is the silent killer!  I am not sure if all agents are aware of this new law and I'm not sure if this is a thing in AZ but good to know!  Thanks!

Feb 18, 2014 07:15 AM #29
Ambassador
3,829,955
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Interesting. Sounds like some one did not do a very thorough job of thinking this through, or talking with those in the know. It was no doubt get straigtened out at one point. When I was in MA we used to have to have the Fire Dept. in to verify, in writing, that smoke detectors were in place and working. Not sure if that is still the case.

Here in CA we have a disclosure signed by the seller regarding smoke detectors, and now also for the CO detector. As Elizabeth points out, enforcement on this is pretty lax even though it IS law. Most appraisers note if there is a CO detector or not and if not will tell you to install one. But they don't typically come back to check as that is a cost. Some require photos of the CO detector in place.

Jeff

Feb 18, 2014 09:44 AM #30
Rainmaker
993,223
John G. Johnston
John G. Johnston & Associates, LLC - Westcliffe, CO
An Exclusive Buyer's Agent ~ Westcliffe, CO

George  Dick Greenberg spoke well for Colorado.  They just have to be there and within 15 feet of any bedroom.  Kinda like the seatbelt law.  Yes, I was wearing one but you want me to sign what?

Feb 18, 2014 10:16 AM #31
Rainmaker
2,719,990
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

George,  We have a law in CA as well. We need to make sure the Carbon Detector is in the home before the appraiser goes out.  The real issue is full compliance at closing. Most Listing Agents don't understand the law. The plug in a carbon detector in the dining room which works for the appraisal .... BUT the law says there needs to be one in the hall outside of bedrooms.  This may mean 2 or more detectors are needed to be in compliance with the law. 

Standard of practice my be to put the $250 on all HUD's to cover all bases. It can always be remove but adding will cause a delay.

Feb 18, 2014 10:58 AM #32
Rainmaker
139,998
Joan Dickie
Keller Williams Premier Realty - La Crosse, WI
Keller Williams Premier Realty

The law of unintended consequenses strikes again!  Minnesota has a new law about this also, but thank goodness, not to this extent.

I wonder what was the specific impetus to have the sellers swear an oath, rather than just have an addendum.

Feb 18, 2014 11:28 AM #33
Rainer
9,060
Christine Roush
Century 21 M&M and Associates - Pacific Grove, CA

Yes, I'm with Joan....it seems like "overkill" to require the seller to notarize that they have abided by this rule.  What a pain!  I understand the importance of the requirement to have alarms in place, however, it seems Minnesota is "micro-managing" this effort.

Feb 20, 2014 10:36 PM #34
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
3,663,319

George Souto

Your Connecticut Mortgage Expert
Call Me With All Mortgage Questions
*
*
*
*
Spam prevention