Municipal Code and Ordinance Compliance Act

Back to the Realtor® Resource Library

New State Law Amends Municipal Code

Act 133 of 2016, which took effect January 2, 2017, amended the Municipal Code and Ordinance Compliance Act (MCOCA), originally enacted as Act 99 of 2000. This act prohibits municipalities from denying use and occupancy certificates based on the results of a point of sale inspection.

Some municipalities were inappropriately withholding or impeding U&O certificates, leading to some real estate transactions being postponed or cancelled due to minor property maintenance violations. Act 133 is a tremendous legislative victory for PAR. Members sent more than 13,000 emails to state legislators, urging them to vote to amend the Municipal Code and Ordinance Compliance Act.

More detailed information is available below. If you experience what you believe is a violation of Act 133, please contact your local government affairs director or field representative.


About the Municipal Code and Ordinance Compliance Act

The amendments in Act 133 clarify the rights and responsibilities of both municipalities and property owners so these issues don't occur in the future. Municipalities are not required by the act to inspect existing homes that are being sold. However, municipalities that do require such inspections must issue a certificate prior to the date of purchase, in the following manner:

USE AND OCCUPANCY PERMIT: If no property maintenance or other code violations are found, a Use and Occupancy Certificate must be issued allowing the property to be used or occupied as intended.

TEMPORARY USE AND OCCUPANCY PERMIT: If the municipal inspection reveals at least one violation, but no substantial violations (see definition below), the municipality shall issue a Temporary Use and Occupancy Certificate. The purpose of a temporary use and occupancy permit is to authorize the purchaser to fully utilize or reside in the property while correcting code violations.

TEMPORARY ACCESS CERTIFICATE: If the municipal inspection reveals a substantial code violation which renders a building “unfit for habitation,” a Temporary Access Certificate must be issued. The purpose of the certificate is to authorize the purchaser to access the property for the purpose of correcting substantial violations. No person may occupy a property during the term of a Temporary Access Certificate, but the owner shall be permitted to store equipment that is related to the proposed use or occupancy of the property or is needed to repair the substantial violations during the time of the temporary access certificate.

SUBSTANTIAL VIOLATION: A Substantial Violation is a condition which makes a building “unfit for habitation.” Unfit for habitation is defined as: “A condition which renders a building, structure, or any part thereof, dangerous or injurious to the health, safety or physical welfare of an occupant or the occupants of neighboring dwellings. The condition may include substantial violations of a property that show evidence of: a significant increase to the hazards of fire or accident; inadequate sanitary facilities; vermin infestation; or a condition of disrepair, dilapidation or structural defects such that the cost of rehabilitation and repair would exceed one-half of the agreed-upon purchase price of the property.”

ESCROWS AND BONDS PROHIBITED: A municipality may not require the escrowing of funds or posting of a bond, or impose any similar financial security as a condition of issuing a certificate. But before accessing the property, a property owner is still generally required to follow all the applicable rules for permits, fees, escrows, etc., under existing building, property maintenance and fire codes or other health or safety codes.

COMPLIANCE PERIOD: A new owner will have 12 months from the date of purchase to either bring the property into codes compliance or demolish the building. At the request of the property owner the municipality may negotiate a longer time period, but may not shorten it.

REINSPECTION OF PROPERTY: 1) At the expiration of the 12-month time period or before that time, if requested by the property owner, the municipality shall re-inspect the property to determine compliance with the cited violations. 2) If a temporary access permit has been issued and re-inspection indicates that the noted substantial violations have been corrected but other cited violations have not yet been corrected, the municipality shall issue a temporary use and occupancy permit to be valid for the time remaining on the original temporary access permit. 3) If the re-inspection indicates that all noted violations have been corrected, the municipality shall issue a use and occupancy certificate for the property.

FAILURE TO COMPLY BY OWNER: If the property owner fails to correct the code violations cited by the municipality, the following actions may occur: 1) Revocation of the temporary certificate; 2) The purchaser will be subject to any existing municipal ordinances or codes relating to the occupation of a property without a use and occupancy certificate; 3) The purchaser will be personally liable for the costs of maintenance, repairs or demolition sufficient to correct the cited violations, and a fine of not less than $1,000 and not more than $10,000.

PRE-EXISTING VIOLATIONS: This act generally applies to violations that are found as a part of the municipal inspections done for property resale. But these rules do not apply to violations of a local code or ordinance that are already the subject of a fine or some other judicial action against the cur-rent owner, or to properties that are subject to certain other statutory provisions. In those instances, the violations must be addressed under the other applicable rules, whatever they may be.

Frequently Asked Questions

revised Dec. 22, 2016

Are municipalities required to perform U&O inspections?
Does this process affect inspections for new construction or renovations?
Does MCOCA establish rules for how municipalities must perform inspections?
What sorts of things is the municipality looking for in this inspection?
What happens if there are problems discovered during the inspection?
What are the different kinds of violations, and what do they mean?
What does it mean to be unfit for human habitation?
What are the different certificates and how are they issued?
Can a municipality require that any of these violations be repaired before issuing a permit?
Can a municipality require that estimated repair funds be escrowed before issuing a certificate?
How long does a buyer have to do repairs?
How does a temporary certificate get converted to a full U&O certificate?
What if the repairs aren't completed in time, or the re-inspection shows repairs weren't up to code?
Can the buyer and seller negotiate over repairs even though the municipality can't require them?
Are there municipal fees or costs that apply to this process?
How do these rules apply to code/ordinance violations that were cited through some other process?
My municipality issues a move-in permit instead of a use and occupancy certificate. Is this covered by the law?
My municipality has point-of-sale requirements that aren't tied to a comprehensive inspection, but that can still hold up issuance of a certificate. Is this process covered by the law?
What do I do if a client is denied a certificate, or I think a municipality is violating the statute some other way?