What Happens When A House Is Deemed Uninhabitable

by | Jan 20, 2024

Finding out your home has been deemed uninhabitable can be quite shocking. If it’s your primary residence, you’ll need to find somewhere else to live until it’s repaired. As a landlord, you have an obligation to your tenants, which can sometimes hurt your pockets. 

You’re reading this blog for one of two reasons:

  1. You’re a landlord whose property was recently deemed uninhabitable by your local authorities. 
  2. You’re a tenant whose property was recently deemed uninhabitable, and you want to know your rights

To find your answer quickly, click the link below that best describes your situation.

What Is An Uninhabitable Home?

The simplest definition of habitability – “Habitable,” means fit to live in; “uninhabitable” means not fit to live in. However, each state has a different (but similar) definition of what makes a dwelling uninhabitable.

Let’s analyze California’s landlord and tenant responsibilities for habitability and repairs. This is according to the California Department Of Consumer Affairs.

California Landlords’ And Tenants’ Responsibilities For Habitability And Repairs

  1. Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors.
  2. Plumbing facilities, including hot and cold running water, are in good working order, and connected to a sewage disposal system.
  3. Gas facilities are in good working order.
  4. Heating facilities are in good working order.
  5. An electrical system is in good working order, including lighting, wiring, and equipment.
  6. Clean and sanitary buildings, grounds, and appurtenances (for example, a garden or a detached garage) free from debris, filth, rubbish, garbage, rodents, and vermin.
  7. Adequate trash receptacles in good repair.
  8. Floors, stairways, and railings are in good repair. 
  9. In addition, the rented property must have all of the following
    1. A working toilet
    2. Wash basin
    3. Bathtub or shower.
    4. The toilet and bathtub/shower are in a ventilated, private room.
    5. A kitchen with a sink that cannot be made of an absorbent material (for example, wood).
    6. Natural lighting in every room through windows or skylights.
    7. Unless there is a ventilation fan, the windows must be able to open at least halfway.
    8. Safe fire or emergency exits leading to a street or hallway. Stairs, hallways, and exits must be kept litter-free. Storage areas, garages, and basements must be kept free of combustible materials.
    9. Operable deadbolt locks on the main entry doors of rental units, and operable locking or security devices on windows.
    10. Working smoke detectors in all units of multi-unit buildings, such as duplexes and apartment complexes. Apartment complexes also must have smoke detectors in common stairwells. 

    Let’s Not Confuse Uninhabitable With Condemned

    Again, this varies by state, but landlords in some states and jurisdictions may be required to obtain a certificate of occupancy, permit, or business license. States that don’t require routine inspections or rental agreements basically put the onus on the renter to police their landlord. If a problem arises, a tenant can file a report with the inspector’s office if contacting their landlord doesn’t work.

    An inspection may show that your property is either uninhabitable or condemned.

    Uninhabitable properties are usually in dire need of repairs and unlivable, but structurally sound enough to remain standing. A condemned property is considered unsafe and must be torn down or extensively renovated before it can be made habitable again.

    This can be because of a fire that destroyed part of the property or a hole in the roof from a tree. Those two examples are a big difference between having no working toilets. 

    What Happens As a Landlord

    As a landlord, your property may be deemed uninhabitable by your local authorities after a report made by your tenant. As we mentioned when discussing the Landlords’ Responsibilities For Habitability And Repairs, you cannot collect rent until minimum requirements are met.

    A house being deemed uninhabitable comes with immediate consequences. 

    • For nonurgent problems that are not a threat to health and safety, you’ll usually have 14 or 30 days (depending on your local laws).
    • Essential repairs, such as a sudden lack of hot water or a broken window, should be dealt with immediately, typically within 24 to 72 hours.

    What Happens As a Tenant

    If there’s a problem with your rental unit, you should first send a formal repair request to your landlord. In addition to sending in a formal request, take photos and video to document the damage. Give them 30 days to make the necessary repairs.

    If that doesn’t work, you can repair and deduct, meaning you can make the repairs yourself and withhold the difference from your rent.

    You can do this if:

    1. You’ve already given your landlord a reasonable amount of time to fix the issue
    2. The issue is a threat to habitability 
    3. The repair costs no more than one month’s rent

    Call your code compliance and/or health department if you don’t want to make the repairs yourself. An inspector will assess your property and give a citation if they deem it uninhabitable. They’ll then give your landlord a timeline to fix the issue or face consequences.

    In this situation, do not withhold rent. Landlords can use this as an excuse to not fix issues with your unit.

    As a last resort, you can break your lease without facing consequences.

    Selling An Uninhabitable House

    If you’re a landlord or homeowner with an uninhabitable property, you should repair the property ASAP. The longer you wait, the more costly the repairs will become. If you have no desire to keep the home or can’t afford the necessary repairs, selling is a good option.

    When you sell an uninhabitable property, you have a few considerations.

    1. You may have difficulty finding a traditional buyer for your property if it requires repairs. Most buyers want a move-in-ready property to live in.
    2. If you find a buyer, selling the property as-is will require you to drop the price tag to seal the deal.
    3. If you’re on a financial clock because you’re facing foreclosure or need to pay off debt, ask yourself this question. Can I afford to wait for the repairs to finish, or do I need to sell now?

    If you need to sell ASAP, your best option is to sell to a real estate investor willing to buy your uninhabitable property. 

    The Bottom Line

    A home deemed uninhabitable falls short of the basic standards of living. This poses significant challenges to landlords and tenants. 

    For landlords, the discovery that your property is uninhabitable requires immediate attention and repair and impacts your ability to collect rent and fulfill your obligations to your tenants.

    On the other hand, tenants face the task of ensuring repairs are made, potentially having to resort to formal requests, repairs, deductions from rent, or even code compliance interventions. 

    If you’re either party in this situation, hopefully, you can resolve things cordially and professionally!

    Pro Tip: Attend the inspection to ensure the inspector does a thorough job. It should last 2-3 hours. Tell the inspector your plans for the property (move-in ready vs. fixer-upper) and read the full report. 

    Massachusetts-Specific Home Requirements

    • Title 5 Inspection: Massachusetts requires a Title 5 inspection for properties with private septic systems. This inspection ensures the septic system meets state environmental standards and must be done before selling a property, expanding its footprint, or building additional bedrooms.
    • Lead Paint Law: Massachusetts requires homes built before 1978 to be inspected for lead paint. If lead is found, it must be disclosed, and landlords must remove or cover lead paint hazards if a child under six resides in the property.
    • Smoke & Carbon Monoxide Detector: Before a property can be sold, it must pass an inspection to ensure compliance with Massachusetts’ smoke and carbon monoxide detector regulations. Certificates from local fire departments are required at closing.
    • Transfer Tax (Stamp Tax): Massachusetts imposes a real estate transfer tax on property sales, commonly known as a stamp tax. The tax rate is $2.28 per $500 of the purchase price, paid by the seller at closing.

    Step 8: Homeowners Insurance

    Homeowners insurance is mandatory if you have a mortgage and must be in place before closing. This insurance covers various risks, including damage from fire, theft, and natural disasters, as well as liability for accidents on your property.

    Standard policies often include dwelling coverage, personal property coverage, liability protection, and additional living expenses if your home becomes uninhabitable.

    There are different levels of coverage, such as:

    • HO-1: Basic policy covering specific perils.
    • HO-2: Broad policy covering more perils than HO-1.
    • HO-3: Special policy that covers all perils except those explicitly excluded.
    • HO-5: Comprehensive policy offering the most extensive coverage.
    • HO-6: Condo insurance.
    • HO-7: Mobile home insurance.
    • HO-8: Older home insurance.

    By comparing different policies and providers, you can ensure you get the best protection for your new home.

    Step 9: Closing And Walkthrough

    The final walk-through typically occurs on the closing day to ensure the property is in the agreed-upon condition. During this inspection, confirm that all personal items have been removed unless specified otherwise in the contract, and check for any new damages. Conduct the walk-through during daylight hours for better visibility. 

    Be thorough:

    • Flip all switches
    • Turn on faucets to check for leaks
    • Run all appliances
    • Test the garage door opener
    • Open and close all doors
    • Flush toilets
    • Run the garbage disposal and exhaust fans
    • Inspect ceilings, walls, and floors.
    • Test the heating and air conditioning systems.

    At The Closing Table

    You will review your Closing Disclosure form at closing, which you should receive three business days before closing. Compare it with your Loan Estimate to check for major changes or inconsistencies. Some fees are legally restricted from increasing by more than 10%.

    Consider having a real estate attorney review these documents if desired.

    On closing day, meet at the title company. Being on time is crucial, as appointments are often scheduled back-to-back. Bring your photo ID, a cashier’s check (if required), Closing Disclosure, and any other requested documents. 

    During the closing, you will sign several key documents:

    • Closing Disclosure: Details all the costs and fees associated with your mortgage, received at least three business days before closing for review and comparison with your Loan Estimate.
    • Promissory Note: A legal document where you agree to repay the loan amount over a specified period, including the interest rate and payment schedule; your promise to pay back the loan.
    • Mortgage (or Deed of Trust): Secures the promissory note and gives the lender a claim against your home if you default on the loan; outlines the mortgage terms, including the loan amount, interest rate, and repayment terms.
    • Deed: Transfers property ownership from the seller to you; includes a property description and is signed by the seller.
    • Settlement Statement (HUD-1 or ALTA): Provides a detailed list of all costs associated with the home’s sale, including buyer and seller costs; reviewed and signed by both parties.
    • Affidavits: Various affidavits may be required, such as confirming your identity, stating the property will be your primary residence, or ensuring no undisclosed liens or judgments.
    • Title Documents: Ensure you receive clear title to the property; may include documents related to title insurance, which protects you and the lender against potential legal issues with the property’s title.
    • Initial Escrow Disclosure: This document outlines the escrow account details, including the amount you need to deposit and what it will cover (e.g., property taxes and insurance).
    • Loan Application: Review and sign a final version of your loan application to confirm that all information is accurate and up to date.
    • IRS Form W-9: Used to provide your taxpayer identification number to the lender for reporting interest paid on the mortgage.
    • Homeowners Insurance Verification: Proof that you have secured homeowners insurance for the property, typically required by the lender.

    Get One-on-One Guidance

    Contact us below or call (978) 228-1068 to speak with us about selling your home fast.

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    Elie Deglaoui - Author

    Author

    Elie Deglaoui

    Elie is our office admin who handles all our day-to-day tasks and makes sure we always stay on track. He brings his love of music and sports into the office everyday to always liven up the environment. His outgoing personality makes it easy and fun for him to talk to homeowners, homebuyers, and everyone in between.

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