The Borough Form That Can Stall A Palisades Park Closing, And Why It's Usually The Basement
September 10, 2026
September 10, 2026
What's the one document a Palisades Park attorney will ask for that has nothing to do with the mortgage commitment, the survey, or the deed itself? It's a form most buyers have never heard of until their closing date is suddenly in question: the Certificate of Continuing Occupancy.
In most New Jersey towns, a certificate of occupancy is something you think about only if you're building new or gutting a kitchen. Palisades Park runs it differently. Under Chapter 198 of the borough code, no one may occupy a residential, commercial, or industrial building after it has been sold or vacated until the owner has secured a certificate of continuing occupancy, and that requirement applies to every rental, lease, or sale in the borough, not just new construction. The borough's Building Department is direct about why this matters at resale: when a home inspector hired by the buyer finds work that was never properly permitted, sales are often lost or prices get adjusted downward once that discovery surfaces.
That single fact changes how a Palisades Park transaction should be prepared, and it explains why one part of the housing stock causes more delayed closings than any other: the finished basement.
The CCO inspection itself is not exotic. The Enforcement Officer does a general walkthrough of the visible parts of the building, confirms there are no imminent hazards, and verifies the property complies with the borough's building, health, safety, and fire codes. Tied to it is a separate Certificate of Smoke Detector, Carbon Monoxide Detector, and Fire Extinguisher Compliance, both required before the sale can close. Both the current owner and the buyer must sign a sworn statement acknowledging the property will be used in a manner consistent with local and state law, which means any misuse discovered later isn't just a code violation. It's a statement someone signed under oath.
None of that is expensive on paper. A one-family CCO application runs $50. A two-family application runs $75. Business applications run $350, with an additional zoning review fee of $25. The borough gives itself up to 30 days from a completed application to conduct the inspection and issue or deny the certificate, and that window is the real cost. A $50 form that arrives at the closing table without warning is a scheduling problem, not a budget line.
Palisades Park's zoning code makes a specific and easy-to-miss distinction. A basement in a one- or two-family dwelling can be finished and used to supplement the living space of the unit above it, but it cannot legally function as its own separate dwelling unit. If an inspector finds a basement with its own kitchen, its own entrance, and separate utility metering set up to serve it as an independent apartment, that configuration doesn't pass. The code goes further: if separate utility services were installed to serve what the borough calls an "illegal unit," those services have to be removed before a certificate can be issued.
This is the mechanism behind a pattern longtime Palisades Park agents recognize immediately. The borough's housing stock leans heavily toward one- and two-family homes, many of them older properties where a prior owner finished the basement decades ago, sometimes with a full kitchen and a second meter, to house a relative or generate rental income. None of that was necessarily malicious. It was common practice for years in towns across Bergen County. But Chapter 198 was adopted in 1996, and every sale or change of occupancy since then has triggered the same inspection. A basement configuration that quietly worked for a family for twenty years can still fail a CCO review the moment the property changes hands, and the fix isn't cosmetic. It can mean capping a second kitchen, removing a separate meter, or reclassifying a bedroom that was rented out as unpermitted living space.
The Building Department's own guidance underscores how this plays out at resale, noting that unpermitted construction is sometimes discovered years after the work was done, and that when it surfaces, it tends to cost the seller money or the deal altogether.
Before December 2024, a homeowner with a finished basement generating rental income had two options: leave it as unpermitted and hope it never comes up, or give up the income. That changed when the Borough Council unanimously approved Ordinance 2024-17, creating a formal accessory dwelling unit program for one- and two-family homes. The ordinance followed a New Jersey Superior Court ruling from Judge Christine Farrington, who invalidated the borough's prior zoning ordinance in a set of builders' remedy lawsuits and ordered Palisades Park to produce a real affordable housing plan. Borough Attorney Scott Krumholz described the ADU option at the time as a way to let residents, including seniors on fixed incomes, remain in the community without displacement.
The program has real boundaries. An ADU can be built inside an existing basement or attic, as an addition, or as a detached structure, but it must include a full kitchen, bathroom, and independent living space, run between 300 and 800 square feet depending on the size of the primary unit, and can hold no more than two bedrooms. Rentals must run at least six months, ruling out short-term use. At least one off-street parking space is required, and a licensed architect or engineer, not the homeowner or a general contractor, must prepare the plans. Once approved, the owner has to file an annual affidavit confirming they still live in either the primary unit or the ADU, and if they don't, the certificate of occupancy for the accessory unit is automatically revoked within 30 days. Selling the property doesn't erase any of this either. Anyone listing a home with an approved ADU is required to disclose it to prospective buyers, and a new owner has 60 days after closing to file for their own certificate of continued use.
What the ordinance actually does is convert a hidden liability into a documented one. A legal ADU still means paperwork, an inspection, and an annual filing. But it's paperwork that survives a CCO review instead of triggering a failed one.
For a seller, the practical move is to treat the basement question as part of pre-listing prep, not something to discover during attorney review. If there's a second kitchen or a separate meter down there, find out now whether it was ever permitted, and if it wasn't, decide before listing whether to restore it to a supplemental space or pursue the new ADU process. Either path takes time the closing calendar doesn't always allow if it starts after an accepted offer.
For a buyer, the useful question isn't just "is there a CO." It's more specific:
None of this replaces a conversation with a real estate attorney once an offer is in motion, but knowing the mechanism ahead of time changes how a Palisades Park deal gets prepared on both sides of the table.
Does the CCO requirement apply to condos, not just single-family and two-family homes? Chapter 198 covers commercial, industrial, and residential buildings broadly, including individual units in multiple-family dwellings, so a condo sale isn't exempt from the underlying requirement.
If a basement apartment has existed for decades, does it get grandfathered in? Not automatically. The ordinance applies at the point of sale or change of occupancy, so a configuration that was never issued a certificate of occupancy for separate use can still fail inspection regardless of how long it's been in place.
Can a seller just skip the certificate and sell as-is? The borough code prohibits occupancy of a property after sale until the certificate is secured, and title companies and attorneys in Bergen County generally treat it as a closing requirement rather than an optional step.
A basement that quietly worked for one family for twenty years can still become the reason a closing date moves. Knowing which form triggers that, and which local ordinance now offers a legal way around it, is the kind of detail that separates a smooth Palisades Park transaction from a delayed one. If you're weighing a sale or an offer on a property with a finished lower level, Sara Shin Select can walk through what the borough will actually be looking for before you're the one finding out at the closing table.
Whether it’s a home, warehouse, or medical building, Sara knows how to showcase properties at their highest value.