Definition
A Certificate of Occupancy (CO) is a legal document issued by a local government or building department that certifies a property is safe for occupancy and complies with zoning and building codes. It is typically required before residential or commercial buildings can be legally occupied, sold, or leased.
Explanation
A Certificate of Occupancy confirms that a property:
- Meets building code regulations (e.g., electrical, plumbing, and structural safety).
- Is zoned appropriately for its intended use (residential, commercial, mixed-use, etc.).
- Has passed final inspections by local authorities.
COs are often required in the following situations:
- New Construction – Before a newly built home or commercial building can be occupied.
- Major Renovations – When significant structural or safety changes are made.
- Property Conversion – If a building’s use is changed (e.g., from residential to commercial).
- Real Estate Sales or Rentals – Some jurisdictions require a CO before selling or leasing a property.
Without a valid CO, a property owner may face fines, delays, or legal issues, and lenders may refuse to approve financing for the transaction.
Example
A developer completes a new apartment complex and must obtain a Certificate of Occupancy before tenants can move in. The local building inspector conducts a final inspection, verifying fire safety systems, plumbing, and electrical work. Once approved, the CO is issued, and the building can legally be occupied.