Last month I wrote about the new law requiring the installation of carbon monoxide (CO) detectors and its impact on the TDS as of 1/1/11.  This month I want to clarify what the new law does and does not require.  To begin I will repeat the opening paragraph of last month’s article.

Effective July 1, 2011 all single family residences in the State of California must have at least one CO detector installed as required by California Health and Safety Code Section 17926, et seq. Multiple dwelling units have until January 1, 2013 but a prudent landlord would get the property in compliance as quickly as possible. The only exceptions are for dwellings that are not designed to burn fossil fuels and do not have an attached garage.

The law seems relatively straight forward and might be more so if it were not inconsistent with other laws we have learned to comply with over the years.  For many years we have dealt with smoke detectors and water heaters and the certifications sellers must make to buyers.  In those two instances the seller must certify the property will be in compliance at close of escrow.

This new law is different.  It only requires that the seller disclose if the property has a CO detector installed.  Although the law requires the detectors be installed in all SFR by 7/1/11 there is no requirement that the property be in compliance at close of escrow any more than there is a requirement that properties be up to other code requirements at close of escrow. If the seller does not state there is a CO detector installed and the buyer proceeds to close escrow no violation has occurred based upon the sale transaction.  The only the violation of the law that at least one be installed in the property has now become the buyer’s violation.

Does that mean the seller can ignore the law?  Not necessarily.  We are hearing that lenders have been requiring appraisers to confirm that the CO detector is installed as an appraisal condition.  If one is not installed at the time of the initial appraisal there may well be an additional fee for the appraiser to come back and confirm that the detector has been installed before the loan can fund.  It would be in the buyer’s best interest to insure the CO detector is present before the appraiser sees the property.

If you are taking a new listing on an SFR it would be best practice to suggest to the seller that they get the CO detector installed before the home is listed if the seller has not already complied with the law. If you are the selling broker it would be best practice to place a provision in the purchase agreement that an operable CO detector will be installed within ten days of acceptance, or some other period, so it will be present at the time of the appraisal,  .  It may save arguments and/or delays later on over a less than $30 item.

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