Municipal Code and Ordinance Compliance Act

No. Nothing in MCOCA or anywhere else in state law/regulation requires a municipality to inspect a property and issue a certificate prior to resale, and many choose not to. MCOCA is simply designed to establish some rules for when a municipality does choose to do those inspections as part of the process of a property resale.

No. The inspection process for new construction and renovations is covered by the PA Uniform Construction Code (and related codes as adopted by the municipality), which is different. MCOCA applies only to inspections and certificates in the context of a property resale.

No. The inspection process is up to the individual municipality, based on their local ordinances. For example, some might require the inspection to be ordered by the seller and others by the buyer, or there may be differing timelines for ordering the inspections. Since municipalities are all different, Realtors® should fully familiarize themselves with the processes in their geographic areas of practice to ensure they are properly advising clients of how to proceed.

Inspections are based on the locally-adopted combination of building, housing, property maintenance and fire codes, as well as any maintenance, health or safety nuisance ordinances that are in place. The codes/ordinances and related rules will vary greatly, so it is important to understand just what’s being looked at in each jurisdiction. Municipalities generally use some sort of checklist. It can be helpful to obtain a copy to share with both the seller and buyer so they understand what will be looked at.

A “municipal report” will be issued after the inspection. If the inspector finds conditions that don’t comply with the relevant codes/ordinances, each of the conditions will be noted as either a “violation” or a “substantial violation” in the municipal report.

A municipal report can show either a “violation” or a “substantial violation,” or some combination thereof.

A “violation” is any basic violation of a local code or ordinance related to the property.

A “substantial violation” is any violation that is so significant it makes the property “unfit for human habitation.”

The type(s) of violation(s) will determine the type of certificate to be issued (see below).

The definition includes conditions that make a property likely to be dangerous to the health and safety of occupants or neighbors, including things like fire risks, lack of sanitary facilities, vermin, or overall disrepair that would cost half or more of the sales price of the property to fix. This will always be somewhat subjective, but is generally limited to the worst types of violations.

If the municipal report shows no violations at all, the municipality must issue a full U&O certificate for the property. But if there are any violations, one of two possible temporary certificates would be issued:

If the report shows one or more basic violations (and no substantial violations), then the municipality must issue a temporary U&O certificate. This certificate allows the buyer to fully use and live in the property during the time they are making any necessary repairs.

If the report shows one or more substantial violations, then the municipality must issue a temporary access certificate for the property. This allows the buyer to use the property only for the purpose of making repairs. For example, a buyer can access the property to do the work, can store tools and materials on-site, and can even store personal belongings there in preparation of moving in – but can’t sleep there or use it to store items for some other purpose.

No. The buyer and seller can certainly negotiate pre-settlement repairs if they choose, but they cannot be required by the municipality. Regardless of the number or type of violations found in a municipal report, the municipality must issue one of three kinds of certificates whether or not any of the violations are fixed prior to closing.

No. The law forbids a municipality from requiring escrowed funds, bonds, or other sorts of financial arrangements as a condition of issuing the certificate.

All repairs must be completed within 12 months from the day of purchase. The municipality and owner can negotiate a longer time period if they desire, but the time frame cannot be shortened.

At the end of the 12-month period – or before if the owner requests – the municipality will re-inspect the property. If there were both violations and substantial violations, once the substantial violations have been corrected (and verified through re-inspection), even if there are outstanding basic violations the municipality should upgrade from a temporary access certificate to temporary U&O certificate. This would then allow the owner to move into the property and continue the work. Once a re-inspection shows that all violations have been fixed, the temporary certificate will be replaced with a permanent one.

If repairs have not been completed and verified through re-inspection at the end of 12 months, the temporary certificate can be withdrawn. If that happens, the owner will not have a valid certificate to use or occupy the property. This will make the owner subject to any existing codes/ordinances/etc. that apply to someone who uses a property without proper certificates. Penalties might include an order to move out, and/or various citations and fines. The owner can also be forced to pay the relevant maintenance and/or repair costs to fix the violations – or the costs to demolish the property – and be subject to an additional fine of $1,000 – $5,000.

Generally, yes. Unless there’s something in the purchase agreement between the parties that says this is not a negotiable issue, the parties are free to negotiate any combination of pre-settlement repairs, post-settlement repairs, escrowed funds, price reductions, seller assists or any other accommodations. Remember that these negotiations are subject to the same criteria as any other repair negotiations; however, so parties and their brokers should be extremely careful to understand how any of these negotiations might affect the overall transaction. Specifically, be sure that you understand how any negotiated resolution might affect mortgage financing. The PAR Agreement of Sale (Form ASR) contains a provision about U&O repairs that will be reviewed for possible amendments in light of these statutory changes.

Probably. Most – probably all – municipalities charge some sort of fee for the initial inspection. If violations are found and a re-inspection is necessary, most will charge a re-inspection fee as well – and that might be paid multiple times if you require multiple re-inspections.

In addition, while municipalities shouldn’t impose any special repair-related fees just for this type of inspection, any generally applicable fees or costs would still apply. For example, if a building permit (with a fee) is always required to install sidewalks, then that same permit must be obtained at that same cost whether the homeowner is doing the repair for U&O purposes or for some other reason. On the other hand, if no permit is required for that work in other circumstances, it would not be appropriate to require a permit (and fee) only for sidewalks replaced after this sort of inspection.

This law is directed only at violations that are only found when a municipality decides to inspect a property at resale; it does not apply to violations discovered through other regular inspections. For violations already on the books that have advanced to some sort of judicial enforcement, the generally applicable municipal rules would still apply and a new owner wouldn’t be guaranteed a certificate. In addition, if the property has previously been cited under the Neighborhood Blight Reclamation and Revitalization Act, those rules would apply instead.

A “use and occupancy certificate” is defined as “a certificate issued by a municipality stipulating that the property meets all ordinances and codes and may be used or occupied as intended.” Regardless of the actual name used by a municipality, if the piece of paper is used for this purpose, it should be covered by the statute.

It’s tough to say without looking at the specific ordinance. Please contact your local association’s government affairs director or field staff representative for more clarification.

If a Realtor® believes a municipality may be violating these provisions, please contact your local association’s government affairs director or field staff representative. Staff will have resources to discuss this topic with the local municipality, and can access additional help through PAR if necessary. Even if you are able to handle issues in a specific transaction yourself, please contact local staff, so PAR can better monitor compliance across the state and not rely on transaction-by-transaction negotiations at the local level.