In Sunday's real estate Q & A section, Jay Romano reported that a seller likely has no recourse against a seller where the seller misrepresented the status of a Certificate of Occupancy prior to closing. Mr. Romano's report was pursuant to the direction of Douglas F. Wasser, a Manhattan real estate lawyer. Yet, this is not necessarily true. In fact, the case of Scharf v. Tiegerman completely holds otherwise and states that where the seller misrepresents the property in a fraudulent manner, liability follows.
Moreover, my law firm has previously sued attorneys for malpractice in representing the purchaser in such a situation without performing due diligence and advising the purchaser of the actual conditions. To be clear, a Certificate of Occupancy is a municipal record that it is safe to occupy the house in the listed manner. A purchaser with an intent to occupy the house in a manner must be advised if their intended occupancy is legal or not. If an attorney to a real estate transaction doesn't provide this advise, they have committed malpractice.