Certificate of Occupancy
What is a certificate of occupancy?
A certificate of occupancy (CO) is a document that confirms that a property is legally suitable for occupancy. Certificates of occupancy are usually issued by a local zoning or building department after a thorough inspection. In order for a property to be considered suitable, it must be compliant with all local building codes, and adhere to regulation safety standards.
Certificates of Occupancy also contain key information about a property. The class that a property falls into, as well as what the building’s use is meant to be (i.e. residential or commercial) are standard items on a certificate of occupancy. As a matter of fact, in some regions they are commonly referred to as use-and-occupancy certificates.
A CO is required for the sale of a property in most cases. Additionally, building a new property requires a certificate of occupancy to be obtained by law. Active development of a property without a certificate of occupancy can incur fines for each day that work commences. Beyond construction, a certificate of occupancy confirms (at least from a legal standpoint) that the building is safe – which is pretty important when trying to attract tenants.
Temporary Certificate of Occupancy
In some cases, before a property has been finished, a temporary certificate of occupancy (TCO) is granted. Temporary certificates of occupancy carry all of the same implications as the standard certificate of occupancy, however they are only valid for a set period of time, typically 90 days. Property owners may want a TCO when suitable completed structures can be utilized while other portions of the project are still being constructed. Temporary certificates of occupancy are only granted on the grounds that the property owner is actively working towards earning the issuance of the standard CO. TCOs can be extended as many times as the municipality or city will allow.
When is a certificate of occupancy necessary?
Certificates of occupancy are issued for a variety of scenarios in commercial real estate:
1. New construction
By law, a certificate of occupancy is required before any of the construction can be started. Additionally, a newly constructed commercial property MUST be issued a certificate of occupancy before it can be utilized in any manner.
2. The “use” of a property is being altered
It isn’t uncommon for a commercial property to be repurposed for a different type of usage. Any time a property owner decides to convert from one use to another, like from an office building to apartments, a new certificate of occupancy must be issued.
3. Renovations and additions
Major renovations, particularly those that include new additions to the property require a new certificate of occupancy to be issued.
How to obtain a certificate of occupancy
The process for obtaining a certificate of occupancy is fairly easy. A property owner simply has to fill out an application with their municipality or city's local zoning or building department. There is a fee that must be paid upon application as well. Once the application is submitted and the fee is paid, all that is left is for the property to pass an inspection. In the case of a newly constructed property, there are a series of inspections that must be done, including:
- A general property inspection
- An electrical inspection
- A plumbing inspection
- A fire inspection
What is a Certificate of Occupancy in commercial real estate?
A Certificate of Occupancy (CO) is a document that confirms that a property is legally suitable for occupancy. Certificates of occupancy are usually issued by a local zoning or building department after a thorough inspection. In order for a property to be considered suitable, it must be compliant with all local building codes, and adhere to regulation safety standards.
Certificates of Occupancy also contain key information about a property. The class that a property falls into, as well as what the building’s use is meant to be (i.e. residential or commercial) are standard items on a certificate of occupancy. As a matter of fact, in some regions they are commonly referred to as use-and-occupancy certificates.
A CO is required for the sale of a property in most cases. Additionally, building a new property requires a certificate of occupancy to be obtained by law. Active development of a property without a certificate of occupancy can incur fines for each day that work commences. Beyond construction, a certificate of occupancy confirms (at least from a legal standpoint) that the building is safe – which is pretty important when trying to attract tenants.
In some cases, before a property has been finished, a temporary certificate of occupancy (TCO) is granted. Temporary certificates of occupancy carry all of the same implications as the standard certificate of occupancy, however they are only valid for a set period of time, typically 90 days. Property owners may want a TCO when suitable completed structures can be utilized while other portions of the project are still being constructed. Temporary certificates of occupancy are only granted on the grounds that the property owner is actively working towards earning the issuance of the standard CO. TCOs can be extended as many times as the municipality or city will allow.
What are the requirements for obtaining a Certificate of Occupancy?
The process for obtaining a certificate of occupancy is fairly easy. A property owner simply has to fill out an application with their municipality or city's local zoning or building department. There is a fee that must be paid upon application as well. Once the application is submitted and the fee is paid, all that is left is for the property to pass an inspection. In the case of a newly constructed property, there are a series of inspections that must be done, including:
- A general property inspection
- An electrical inspection
- A plumbing inspection
- A fire inspection
Depending on the results of each inspection and the regulations of the municipality, these inspections may be carried out in shifts. Typically there is an initial inspection, and then follow up inspections until any issues have been resolved. Each city or municipality is able to set their own standards for these inspections, so the criteria for obtaining a certificate of occupancy varies from location to location.
How long does it take to get a Certificate of Occupancy?
The amount of time it takes to get a Certificate of Occupancy varies from location to location. Generally, it takes anywhere from a few days to a few weeks. The process for obtaining a certificate of occupancy is fairly easy. A property owner simply has to fill out an application with their municipality or city's local zoning or building department. There is a fee that must be paid upon application as well. Once the application is submitted and the fee is paid, all that is left is for the property to pass an inspection. Depending on the results of each inspection and the regulations of the municipality, these inspections may be carried out in shifts. Typically there is an initial inspection, and then follow up inspections until any issues have been resolved.
What are the benefits of having a Certificate of Occupancy?
Having a Certificate of Occupancy (CO) has many benefits. It confirms that a property is legally suitable for occupancy, and that it is compliant with all local building codes and safety standards. It also contains key information about a property, such as the class it falls into and what the building’s use is meant to be. Additionally, a CO is required for the sale of a property in most cases, and it is necessary for any new construction. Having a CO also helps to attract tenants, as it confirms that the building is safe.
What are the consequences of not having a Certificate of Occupancy?
The consequences of not having a Certificate of Occupancy can be severe. In most cases, building a new property without a certificate of occupancy can incur fines for each day that work commences. Additionally, a property owner may be unable to obtain a loan or insurance for the property without a certificate of occupancy. Furthermore, without a certificate of occupancy, a property owner may be unable to rent or sell the property.
Depending on the results of each inspection and the regulations of the municipality, these inspections may be carried out in shifts. Typically there is an initial inspection, and then follow up inspections until any issues have been resolved. Each city or municipality is able to set their own standards for these inspections, so the criteria for obtaining a certificate of occupancy varies from location to location.