A certificate of occupancy (often called a CO) is an official document issued by a city or county building department. It confirms that a building complies with local building codes and zoning rules and can legally be occupied for a specific use, such as a single-family home, an apartment building or a retail store.
Requirements differ by jurisdiction, but a CO is commonly required for new construction, major renovations and changes in how a property is used.
When you need one
Situations that often call for a new or updated certificate of occupancy include:
- Completing a newly built home or building
- Converting a property to a different use, such as a single-family home into a duplex, or an office into apartments
- Adding units, such as a legal accessory dwelling unit
- Major renovations that require building permits
- In some cities, a change in ownership or a new commercial tenant
Some jurisdictions also issue a temporary certificate of occupancy, which allows people to move in while minor items are finished.
How it works
The process usually follows the permit process. You pull permits, complete the work, and schedule inspections for areas like structure, electrical, plumbing, mechanical and fire safety. Once the work passes final inspection and any zoning requirements are met, the building department issues the certificate. The document typically lists the permitted use, occupancy classification and sometimes the maximum occupant load.
Why it matters for landlords
Renting a unit without a required CO can create serious problems. Depending on local law, it may lead to fines, orders to vacate, difficulty enforcing rent, trouble with insurance claims and problems getting financing or selling. Lenders and title companies often ask for a CO on commercial and multifamily deals.
Before you buy, especially a property with converted or added units, ask the seller for permit records and confirm with the building department that the current use is legal. For commercial spaces, confirm the CO matches the tenant’s planned use before signing a lease or starting tenant improvements. Rules vary by city, so check with your local building department or an attorney.
Related terms
Where it gets confusing.
Do I need a new certificate of occupancy to rent out a property?
It depends on the city. A new or updated certificate is commonly needed after new construction, a change of use, added units or major permitted work, and some cities ask for one on a sale or a new commercial tenant. Ask your local building department.
What is a temporary certificate of occupancy?
Some jurisdictions let people move in while minor items are still being finished. The temporary certificate expires, so the remaining work has to pass inspection to get the final one.
What can happen if I rent without a required certificate?
Depending on local law, fines, orders to vacate, trouble enforcing rent, insurance problems and difficulty financing or selling. Check permit records before you buy a property with converted or added units.