6 South Street, Suite 201
Morristown, New Jersey 07960
(973) 605.8800 tel
(973) 605.8020 fax

Craig Gilgallon NJ Real Estate Lawyer

When does attorney review begin?
Attorney review begins once the Contract is signed by both parties and the fully executed Contracts are distributed to both parties. It is a three day period, and weekends do not count. You should make sure that your realtor immediately faxes the Contract to our office. If the realtor does not, you should. The attorney review period runs, even if your attorney has not received the Contract. Remember, the time period runs from the date the contracts are signed, not the date that the attorneys receive the Contract.

Sellers Information Statement. A form that we refer to as a "Sellers Information Statement" will be sent to you from our office as soon as the contract is received. It is imperative that you complete this form and send it back to us immediately.

What about the Deposit?
Commonly, the Buyer will post a deposit of $1,000.00 upon signing the Contract and the balance of 10% of the Purchase Price will be posted by the buyer within 10 to 14 days following completion of attorney review. Many Contracts are drafted with variations involving the amount of the deposit and the timing of the deposit. The deposit is typically held by the realtor (usually the selling realtor), the Seller's attorney, or the Buyer's attorney. Also, due to today’s low interest rates, the deposits are not usually kept in interest bearing accounts.

Do I need to obtain a Certificate of Occupancy?
You need to check with the municipality in which your home is located. Some municipalities require that the Seller obtain a Certificate of Occupancy prior to closing and some do not. Some municipalities have unique requirements. For example, Maplewood requires that the Buyer, not the Seller, obtain the Certificate of Occupancy. Also Bernards Township requires a "CRC" in order to close. That document certifies that all building permits that have been "opened" by the seller have been "closed". All municipalities require that the Seller obtain a Certificate of Occupancy in the case of new construction. You do not want to wait until the last minute to obtain a Certificate of Occupancy, because the municipality may require that you make certain repairs to the home before the Certificate of Occupancy is issued. This will probably require a re-inspection, and may take time. You cannot close without a Certificate of Occupancy, if it is required by the municipality.

Do I need to obtain a Smoke Detector Certificate?
New Jersey State law mandates that when you sell your home you must obtain a smoke detector certificate. This must be obtained whether or not your municipality requires the issuance of a Certificate of Occupancy. In most municipalities you must schedule an appointment with the fire code official to inspect your home to determine that you have the requisite number of smoke detectors and that they all work. These appointments cannot be scheduled at the last minute. We strongly suggest that you schedule the appointment as soon as attorney review is completed. The Firm will not close your transaction if a smoke detector certificate has not been obtained, since it is against the law to close without it. Also, check to see how long the smoke detector certificate is valid. If the closing is delayed, you may have to reapply and obtain a new certificate.

Carbon Monoxide Certificate?
New Jersey state law also requires that you obtain a carbon monoxide detector certificate. This is a relatively new law and is like the smoke detector certificate, administered at the municipal level. All of the comments made regarding the issuance of a smoke detector certificate apply to the issuance of a carbon monoxide detector certificate as well.

Title and Survey?
The Buyer’s attorney will order the title search and the survey, and the Buyer will pay for these. However, you should try to provide us with a copy of the title policy and survey you obtained when you purchased your home. We will in turn provide the Buyer's attorney with copies of the title and survey. This will speed up the title search, and will also help in resolving certain title problems that might arise. If you have a recent survey, the Buyer may try to avoid the cost of a new survey and may request that you sign a Survey Affidavit. That is an Affidavit that states that there have been no exterior changes to the dwelling or to the property. If your survey is not current, the Buyer may not be able to use it, depending upon the requirements of the chosen lender.

Will we close on the closing date set forth in the Contract?
The closing date in the Contract is a target date only. There is no guaranty that your closing will occur on the exact date set forth in the Contract. Likewise, the exact time of the closing is usually established a day or two before the closing.

In all cases, the Seller must move out before the closing and the home must be delivered to the Buyer, broom clean and free of all possessions. If you have not moved out by the closing, you run the risk that the closing will be delayed. We strongly suggest that you move out of the home the day before the closing even if it means that your household goods must be stored on a truck overnight. We also suggest that you make an appointment with our office prior to the closing, to pre-sign all of the closing documents. We will then be able to attend the closing on your behalf without inconveniencing you. You can then either pick up the closing proceeds or we can send them to you. Of course, you will need to be available by telephone in the event that questions arise during the closing.

What do I do with the utilities?

The utilities should be switched to the Buyer's name as of the closing. The realtor can assist or guide you in this process. Do not turn off the utilities completely, because the Buyer has the right to test the water and electricity at the walk-through inspection and if services have been turned off, this will not be possible and will delay the closing.

I prepaid the real estate taxes and/or sewer charges. What do I do?
When the tax and sewer searches are obtained, the Buyer's attorney will see that you either pre-paid for these items ( in which case the credit will likely be in your favor), or that you did not pay for the current period (in which case the credit will probably be in favor of the Buyer). We suggest that if payments are made for real estate taxes and/or sewer, they be made well in advance of the closing. Do not make any payments within a 3 week period prior to closing, but do make sure that all payments are made in a timely manner to avoid the imposition of interest or late penalties. If you make payments shortly prior to closing, you run the risk that they will not be posted in a timely manner, and that you will not receive the appropriate credit.

Since closing is coming up, should I pay the mortgage? With regard to the payment of your current mortgage the general rule is as follows (assuming that your current mortgage imposes a penalty if the payment is not received by the 15th of the month): (a) If you close prior to the 12th of the month, you do not need to make your monthly mortgage payment. (b) If you close after the 12th of the month, you must make your monthly mortgage payment if you wish to avoid the imposition of a late fee. You need to watch this because if the closing is delayed and you have not paid the mortgage payment that is due, you, not the buyer, will be responsible for late penalties.

What happens with my existing mortgage?
The Buyer's attorney will obtain a pay-off statement indicating the amount due on your current mortgage as of the closing date. The appropriate sum will be deducted from the closing proceeds and a check in an amount sufficient to pay off the mortgage will be sent by overnight delivery directly to your lender. The Buyer’s attorney will likely charge you a nominal fee for overnight delivery and a small fee for filing a discharge of that mortgage. Should you receive a notice from your lender after the closing indicating that your loan is overdue or not paid off, please contact our office immediately.

What happens to my line of credit?

If you have a home equity line of credit that is secured by the home that you are selling, that line needs to be closed. If there is any money due on the loan that will have to be paid off at closing like any other mortgage. Once a contract of sale is signed, you should not make any draws against this line of credit, and certainly do not make any draws after the closing.

When do I cancel my insurance?
Do not cancel the homeowner's insurance until you have confirmed with our office that the closing has been completed.

At closing, the Seller is required to sign a Certificate regarding their New Jersey residency status. Why? Effective August 1, 2004, the Gross Income Tax Act requires nonresidents of New Jersey who derive income from the sale of real property in this State to pay estimated gross income tax. The Deed will not be recorded unless this Certificate is submitted and/or the proper estimated gross income tax has been paid. The Seller may be subject to withholding under this Act. We urge all Sellers to familiarize themselves with the Certificate prior to closing and to alert us if they are considered a non-resident of the State of New Jersey. The certifications that you will be asked to sign are on this website. This Firm does not give tax advice with respect to this Act. If you have any questions with regard to the Act’s applicability, please consult your tax professional



For More Information, Contact us at:

The Law Firm of Pawar Gilgallon & Rudy, LLC
6 South Street, Suite 201
Morristown, New Jersey 07960
(973) 605.8800 tel
(973) 605.8020 fax