Pennsylvania Act 133 of 2016
Throughout Berks County, municipal inspections at the point of sale have resulted in many homebuyers facing high repair costs as soon as they become homeowners, and sellers being forced to sell their homes for less than the fair market value of their property.
However, under Act 133 of Pennsylvania, there are more limits on what a municipality can and cannot require of buyers and sellers. While the Act does not resolve the underlying issues and inequity that accompany Point of Sale inspection ordinances, it should make your home settlement go more smoothly...
What is Act 133?
Act 133 of 2016 is a Pennsylvania law signed by Gov. Tom Wolf that changed the way local governments issue occupancy permits to homeowners. The act amended the Municipal Code & Ordinance Compliance Act, which was passed in 2000, and changed the law in the following ways:
- Once a municipality has conducted a Use and Occupancy inspection, it must issue a certificate allowing real estate settlements to move forward. There are three types of resale certificates:
- a normal U&O permit, allowing new owners to move in immediately
- a temporary U&O permit, allowing new owners to move in immediately and make required repairs within 12 months from the date of settlement
- a temporary access permit, allowing buyers of homes deemed unfit for habitation to access the building without residing in it, and make substantial repairs within 12 months
- Municipalities cannot demand the escrowing of funds, or posting of a bond, or impose any similar financial security as a condition of issuing a U&O certificate.
- The term "unfit for habitation" has been clearly defined to describe properties that are "dangerous or injurious to the health, safety, or physical welfare of an occupant or the occupants of a neighboring dwelling." Code inspectors can no longer deny a U&O permit due to minor issues such as missing house numbers, chipped paint, or other issues.
Why is Act 133 important for REALTORS®?
Before Act 133 took effect (on Jan. 2, 2017), municipal inspectors often refused to issue use and occupancy permits because of issues cited during point of sale inspections. This often led to settlements being delayed or canceled because sellers were unable to afford the repairs or complete them by the settlement date. Now, under Act 133, municipalities must give the homeowner 12 months to resolve any violations found during the inspection, which allows the buyer and seller to negotiate who will perform and pay for the work.
REALTORS® should always be aware of whether a municipality requires a use and occupancy inspection. This information can be found quickly in our municipal database.
If an inspection is required by the municipality, schedule it as soon as possible before closing. This gives the inspector ample time to visit the property, and if violations are found, it gives buyers and sellers time to negotiate over the repairs.
Call the Reading-Berks Association of REALTORS® at 610-375-8458 if...
- ...your client is being denied a U&O permit or a temporary access permit, or the municipality is inhibiting the settlement as a result of a U&O inspection. The municipality must provide one as long as they have been given an opportunity to inspect the home.
- ...your client is being asked by the municipality to provide escrow as a condition of issuing a U&O certificate.
- ...your client is being asked to make repairs or correct violations within a time frame shorter than 12 months after the point of sale.
- ...a municipal official tells you that Act 133 does not apply to them for any reason. Any inspection triggered by the buying and selling of property, even those that only investigate the exterior of buildings, is subject to the rules outlined in Act 133.