What is a Certificate of Occupancy?

Published by Thomas Herold in Laws & Regulations

'Certificate of Occupancy' is explained in detail and with examples in the Laws & Regulations edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.

A certificate of occupancy is a local government issued document. These papers give permission for tenants or residents to occupy a new building or even a residence. The reason that local governments mandate such certificates is because of building codes. The certificate proves that a building inspector has certified the building to be safe so that it can be occupied. It means that the structure complies with all present building codes.

Local governments will inspect and then issue such a certificate of occupancy any time that a construction company puts up a new building in the local government’s jurisdiction as defined by the city limits. Even buildings that are opened outside of city limits can requires these before people can use them. In these cases, it might be the parish or county government that would issue the certificate. Local government will give these after they are satisfied with the results of the inspection. Inspectors look at all of the basic elements in the building including wiring, construction basics, plumbing, and other features to ensure they meet up to date code standards. Then they can sign off on a building being safe to inhabit.

Upgrades and additions to building that already exist can also require a new certificate of occupancy. In these cases, the owner of the building will have to apply to the local government for a new certificate after he has finished the changes and improvements. Inspectors will also check over all features of the structure to make sure that both existing and new parts meet the codes, as they would with a new building. After they finish such an inspection, the building department will have to sign off before the government agency can issue the certificate.

The owners of the building are not generally the parties responsible for requesting an inspection. Professional contractors and renovators will contact the responsible government entity so that the department can schedule the inspection. They also go through any necessary arrangements to make sure the certificate of occupancy becomes issued. The builder or contractor will receive the certificate first. They will provide copies of the document to the building owner. They keep copies in the construction company files too.

Other copies will be delivered to appropriate parties as well. One of these would be a lender. Should the building owner wish to use the property as collateral for an application on a loan, he will likely have to furnish a certificate of occupancy copy to the lender along with the application. A great number of lenders will refuse to make the loan until they have a proper copy of the certificate of occupancy on file.

In the event that a building fails an inspection, a certificate of occupancy will not be issued at first. Whatever modifications the inspector insisted on will have to be made. The building has to be brought up to current code before they can request another inspection. After successfully passing a second or later inspection, the certificate will then be issued by the appropriate department.

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The term 'Certificate of Occupancy' is included in the Laws & Regulations edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.