Skip to Main Content

What is a certificate of occupancy, and do I need one?

A new-construction home is framed out.
Christian Delbert/Shutterstock
A new-construction home is framed out.
Christian Delbert/Shutterstock

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

ON THIS PAGE Jump to Open page navigation

It’s natural to want to make sure your home is safe to live in. Luckily, in many places, there are regulations homesellers must adhere to regarding disclosing information to buyers. In some municipalities, this means having a certificate of occupancy, sometimes shortened to CO. Effectively, it’s a special permit legally proving that a property is habitable and meets all code and usage requirements.

Let’s take a look at what you need to know about a certificate of occupancy, including what it is, where to get one and who pays for it.

What is a certificate of occupancy?

A certificate of occupancy is a legal document that proves a structure, such as a house or office building, is safe to inhabit. In addition to the property address and owner, a certificate of occupancy will include the following three things:

  • Description of specific legal use and type of property: This indicates what the property is classified as from a zoning perspective, such as whether it’s zoned for residential, commercial, industrial, retail or mixed-use purposes. It ensures the property is being used as intended.
  • Verification that the property is up to code: This serves as proof that the property is in compliance and up to date with housing and building codes.
  • Confirmation that the property is suitable to be occupied: This confirms that the property conforms to the codes and standards set by your municipality and the structure is fit for occupancy. Without a CO, the property cannot be legally occupied.

When you may need a certificate of occupancy

In general, minor home renovations will not require a new certificate of occupancy to be issued. However, there are a few home-improvement scenarios when a certificate of occupancy probably will be required, depending on local rules and regulations.

  • If you completed a major renovation: When you make significant changes or improvements to a property — for example, fixing up a home that had been condemned, or even completing a family-room addition or adding a new bathroom — you’ll likely need to obtain a certificate of occupancy before you can sell it. That’s in addition to needing a building permit upfront.
  • If you’ve changed the property type: Every type of residence, such as a condo, multifamily or single-family home, has its own permitting and records that detail the type of property to ensure it is used the way it was intended. (The same goes for commercial properties.) Owners who get a permit to convert their property to a different class will need a certificate of occupancy indicating the change. For example, if you’re building a basement apartment that converts a single-family home into a multifamily one, you’ll need to get a certificate after the work is completed to reflect that.
  • If it’s a newly constructed property: A certificate of occupancy is required as part of the sale of any brand-new home or building.
  • If a property has a new owner or occupant. Some municipalities require a new certificate of occupancy each time you sell a property, or when a new tenant moves into a rental property. To ensure you’re following regulations, check with your local building or zoning authority.

How to obtain a certificate of occupancy

To get a certificate of occupancy, contact your local building or zoning inspection office and ask what documentation you’ll need to provide. In most cases, the information will be posted on your local government’s website. Some areas have much more stringent regulations than others — New York City’s rules surrounding certificates of occupancy, for example, are an exception to most other markets.

Typically, your municipality will send an approved inspector to check out fire safety, electrical wiring and plumbing systems, plus any general additions, such as doors and exits. These will be compared to building codes to determine if there are any violations. Whoever applies for the certificate must be present for all required property inspections.

Once an inspection has been completed, you’ll receive a report that outlines the details of your property and whether you pass. If so, you can claim your certificate and are free to sell the property. If not, you’ll receive a list of issues that need to be addressed before the sale can be completed. Your municipality will decide how much time you’ll be given to complete repairs. Then, you’ll need to complete another CO inspection in order to move forward.

How much does a certificate of occupancy cost?

Because different municipalities operate differently, the fee to get a certificate of occupancy varies significantly. For example, in Tamarac, Florida, it costs $260 for a safety permit, plus $89 and $3 for every 1,000 square feet of space in the building. Compare this to West Chicago, where it costs $100 plus an additional $0.12 per square foot. The cost, which is typically paid by the seller, also depends on the size and type of property.

Bottom line

Getting a certificate of occupancy can be a lengthy and expensive process, especially if you need multiple inspections. Rules around them vary significantly from market to market, and one may not even be needed in your local market. But when they are required, they are non-negotiable.

Written by
Sarah Li Cain
Insurance Contributor
Sarah Li Cain is an experienced content marketing writer specializing in FinTech, credit, loans, personal finance and banking. Her work has appeared in Fortune 500 companies, publications and startups such as Transferwise, Discover, Bankrate, Quicken Loans and KeyBank.
Edited by
Senior real estate editor