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Why U&O Inspections are Pointless

Lisa Loper of the Scott Loper Team discusses the inconsistencies of point of sale inspections throughout our area.

A point of sale inspection is one that is done when a property is sold.  For the resale of residential property, these are called Use and Occupancy (U&O) inspections and are required by some (but not all) municipalities.

Often times, the municipality is looking to see if the there are working smoke detectors, handrails, and GFCI protected outlets.  Other municipalities may be checking the condition of the sidewalks or to ensure storm water is not making it into the public sewer system.  There are some municipalities that treat the U&O inspection almost like a home inspection looking to flag anything they would like to see corrected.

The problem with these inspections is that in any given area, only a small number of homes (1-2%) sell per year.  So if the municipality is worried about the cost of treating storm water in the public sewer system, it will take over 60 years for the majority of homes to be sold (and therefore checked for this problem).

If the problem is significant, the solution should be timely and not wait until homes are being sold to solve it.  Having one person fix their sidewalks or ensuring one person doesn’t have a leaking sewer pipe, does nothing to solve the overall problem of trip hazards in a community or excess discharges to the sewer authority.

Significant problems should be addressed at once and throughout an entire community to ensure valid resolution and take advantage of economies of scale.  And if the problem isn’t significant, then leave the seller and buyer to address any problems within a particular house.  That is why disclosure laws exist, buyers have home inspections, and mortgage and insurance companies have their own requirements for a home being to certain standards. 

Point of sale inspections can needlessly hamper the sale of homes and cost sellers a few hundred to thousands of dollars.  Then the following year when municipalities change their U&O requirements, it only further undermines the value of these inspections.

The Scott Loper Team includes Scott & Lisa Loper, Keller Williams Real Estate, 601 Bethlehem Pike, Bldg B, Ste 100, Montgomeryville, PA 18936, (215) 631-1900.

Golden Cockroach September 14, 2012 at 07:56 PM
THANKS for the clarification Lisa. I hope I didn't sound like I was dissing real estate agents, I LOVED working with the agent that sold us our home and she did a fantastic job. You got me to thinking back to the U & O on our house and you are right, they didn't inspect our furnace or the electrical. And again, you are right, sellers and buyers work the issues out to the satisfaction and safety of the new owners. You have to presume that the house is being listed because the owners want to sell - so it behooves everyone to do the best possible. So, in other words, these inspections are nothing more than revenue generating machines for municipalities? Interesting: "FYI – Only about 50% of the municipalities in this area perform U&O inspections on residential re-sales. And of the ones that do, very few look at potential fire hazards such as heating and electrical systems. If they did and there was a subsequent fire, the municipality that “blessed” the house would get sued." So therein lies the rub, they don't want to get sued for faulty inspections. Boy do the investors have renters in P.town by the horns!!! It seems like it would be worth the cost and effort for a tenant to get their own independent inspection because there are really is very little information or protection regarding the most major possible issues.
Golden Cockroach September 14, 2012 at 08:34 PM
...on second thought, the Borough should require the landlord to have a certified, independent inspection and service, (if necessary), of the major systems in their rental properties. I would also expect the insurance companies to require inspections on some regular basis. Because, again, the people with the most to lose are the renters who are also the most vulnerable to unscrupulous landlords and municipalities - whose first concern is covering their own boodies. A distant second - the health and well being of its citizenry.
linda spreeman September 14, 2012 at 11:58 PM
A good home inspector will uncover all of this and more. Why pay for both? More government red tape. ~Linda Spreeman, King of Prussia~
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