The Case for a POS Posse

Over time, we have seen a steady increase in required Point-of-Sale regulations in our region imposing a whole new layer of responsibilities which have turned the role of owners and property professionals alike into informants and instruments for government compliance. 

The most common justification for these rules is to promote health and safety, as in the case of geologic zone disclosures, pool barriers, smoke/CO detectors, and the new ordinances which now require sellers to file a septic and/or well report if the property is served by either of these systems. 

Requirements vary from region to region, and they aren’t always limited to when a property sells: Under Santa Cruz’s Rental Inspection Ordinance, since 2010 local property providers there have had to file an annual report and have their property inspected every 5 years. And starting January 1, all multifamily or commercial buildings with 2 or more stories must be certified to confirm their exterior balconies and stairway railings comply with current code requirements. This will also apply for anyone who owns a home under the care of a homeowner’s association.

Some point-of-sale rules are designed to save natural resources, as in the water conservation certificate programs implemented by the county and most of our cities, under which responsibility can often be transferred to a buyer if they are willing to take it on. Other ordinances show a trend towards spreading the cost of maintaining an aging public infrastructure, as in the sewer lateral inspection and retrofit ordinances which now apply for the majority of unincorporated areas and cities across the State. And lately we have seen some cities start to wrap all these requirements into a single comprehensive report that has to be filed and certified before the property is sold.

While the reasons for these different ordinances are generally well-intended, they can add hundreds, thousands or even tens of thousands of dollars from direct and indirect costs to be spread and negotiated between the parties to a transaction. And in the hands of the administrators, inspectors and vendors who are involved in their implementation, costs and requirements can vary wildly from one to the next, so it pays to shop a bid or get a second opinion. And it can be invaluable to know the nuances of the various rules.

This has added another layer to the role of an agent to help ensure that our client isn’t being overcharged or subjected to rules which may not actually apply. Just this week, my transaction partner had to educate the administrators of 3 different departments at a local city of the rules under their own code to stop them from unreasonably forcing our client to have thousands of dollars of work redone under the faulty premise that corrective work needed to be performed by the exact same contractor who submitted the original permit for repair.

Time and again, these types of situations reinforce the importance of having the right posse assembled to navigate the ever-growing number of moving parts and regulations, however well-intended they may have originally been, to ensure that the net result in the end remains a positive one.