Whenever you decide to purchase a property, whether for your own use or for investment purposes, you need a Certificate of Occupancy. This document confirms that the property you are purchasing does not have structural issues and is fit for human occupancy.
What Is the Purpose of a Certificate of Occupancy?
There are three main issues that a certificate of occupancy addresses. These include:
How the Building Can Be Used
The first objective of a certificate of occupancy is to establish how the building can be used. It may be classified as a residential property, a retail property, a commercial building, an industrial building, or a mixed-use property.
The classification ensures that the property complies with zoning laws and is not used in a way that it wasn’t intended.
Suitable for Occupancy
A certificate of occupancy confirms that the building meets the local building standards and codes. This means that people may occupy it for residency or business purposes.
Complies with All Building Codes
Finally, a Certificate of Occupancy proves that the building has conformed to all housing and building codes. This means that it is structurally sound and contains the necessary features to be safely used by an inhabitant.
When Is it Required?
Every location and state has its own requirements for obtaining a certificate of occupancy. A few typical reasons for needing a certificate of occupancy include:
If a building is entirely new construction, it will need a certificate of occupancy. This may be required from lenders or by potential new tenants.
Lenders want to see that the building is structurally sound and how it can be used, while tenants will want to make sure that their new living conditions are safe and that the space conforms with building codes.
If an owner wants to allow a building to be used in a way that it wasn’t originally intended, a certificate of occupancy may be required.
For example, new renovations may allow a commercial building to be used as an apartment complex. The landlord will want to obtain a certificate of occupancy so that they may prove the property is properly developed for apartments.
Change of Ownership
Whenever a property is sold, a certificate of occupancy will need to be obtained. This ensures that the owner’s name on the certificate is up to date. It also ensures that the property is still structurally sound.
If you make significant renovations to your existing property or otherwise significantly change its structure, a certificate of occupancy may be required. This will vary depending on your locality’s laws and regulations.
How Do You Obtain a Certificate of Occupancy?
To obtain a certificate of occupancy, you’ll need to follow the regulations provided by your locality and state. In most cases, the building you intend to own will need to undergo a series of inspections. These inspections may include any of the following:
- Fire Safety
- General building
There will be designated inspectors that your locality has certified to give these types of inspections. Many times they are employed by the local government.
If your property fails one or more inspections, you’ll be given a list of reasons why. You’ll need to correct these issues for the property to pass regulations and obtain your certificate of occupancy. Normally there is a time period when the corrections must be made, such as within 60 or 90 days.
Once the items are corrected, call your local inspectors so they can confirm that the building complies with regulations by undergoing a second inspection. You may be required to pay an additional fee for the inspections.
What Happens If You Don’t Get one?
If you fail to get a certificate of occupancy and are required to do so by order of the state or local government, you may be fined or sued by your local government.
In addition, if you have people residing in your building — whether for residential or commercial purposes — they may sue you. Thus, it is in your best interests to comply with local laws and ensure that you meet the requirements.