Certificate of Occupancy (COO) Definition

What Is a Certificate of Occupancy (COO)?

A certificate of occupancy is a special permit confirming that a property meets local building regulations and can be safely inhabited. It is issued by a local government office after inspection is complete and all requirements have been met.

REtipster does not provide legal advice. The information in this article can be impacted by many unique variables. Always consult with a qualified legal professional before taking action.

Why Is a Certificate of Occupancy Important?

Local government offices issue a certificate of occupancy (sometimes shortened to COO) to newly constructed buildings or houses that have undergone a major renovation.

This usually occurs after an inspection has revealed that the building complies with all local building standards and it is safe for human habitation. Receiving a certificate of occupancy for a property also means that it can be sold to buyers or used for commercial purposes.

certificate of occupancy

Some details of the COO vary per state, but it generally contains three things:

  1. Use. The COO states what the property will be used for. A property can be residential, commercial, retail, industrial, or mixed-use[1].
  2. Compliance. The document states that a home, office, or structure complies with all local housing and building codes. Every property goes through several inspections during the building process to ensure that it meets local rules[2].
  3. Safety. Finally, the COO confirms that the building is safe for human occupancy.

Note that any structure or building cannot be occupied legally without a certificate of occupancy.

Why Is a Certificate of Occupancy Issued?

A certificate of occupancy will be typically required for the following reasons[3]:

Construction of a New Building

A developer must secure this permit before a home or commercial property can be sold. Once the new construction is complete, an inspector will visit and check the building to see if it complies with local standards for building safety.

Purchasing a Home

Buyers will need the document to apply for a home loan on a newly built structure and complete the property purchase. Without the certificate of occupancy, homebuyers may not be able to secure a mortgage. In most cases, the developer or seller will pay for the costs of getting the COO.

Changing the Use of the Property

When a person changes a residential property into a commercial property and vice versa, they will need to apply for another issue of the COO. An example is an old commercial building that will be turned into a home or an industrial building that will be converted into an apartment complex.

Renovating or Remodeling a Property

A person who wants to remodel a building will need the document to prove that the renovations comply with local rules. These include making additions to the property, like new rooms or basements. In addition, the local government may also require a new COO if the restoration and repair were due to heavy damage due to weather or a disaster.

HELOC renovation

Minor renovations or cosmetic alterations do not need a new COO.

Change in Property Ownership or Occupancy

If the property has a new owner or new tenant, a certificate may be required.

How to Get a Certificate of Occupancy

One must submit an application (which may include detailed building plans) for review and approval) and pay a fee. Generally, this local permit is a necessity before any work on the property can begin[4].

The exact process will vary depending on the municipality, county, or state. In most cases, local authorities will send an inspector to check the property. The inspection will typically cover the following:

  • Electrical, mechanical, and plumbing systems[5].
  • Fire safety, e.g., smoke detectors, fire extinguishers, emergency egress, sprinkler systems, etc.
  • Structural integrity[7], including the foundation and basement.
  • External amenities like utilities (water, gas, and power), easements, and parking.

home inspection

Inspectors may perform a final inspection at a later date to check if the property is safe for occupancy. If the property meets all the requirements, the owner or seller of the property will obtain the certificate.

The process of getting a certificate of occupancy usually takes a minimum of 30 days[8].

What Happens to a Property Without a Certificate of Occupancy?

No one can legally occupy a property without a COO, so real estate developers who sell properties without the document may pay high fines or face lawsuits. In some cases, authorities may order a forced demolition of the property[9].

In addition, banks or other lenders typically decline a home loan application or home insurance for a property that does not have the document.

In some cases, a property may get a temporary certificate of occupancy. This means that the property meets basic occupancy requirements but still has outstanding problems that need to be fixed before it gets the actual COO. This temporary permit gives the applicant 90 days to resolve all building issues before the final inspection[10].

BY THE NUMBERS: The fees to get a certificate of occupancy may range from $250 to $600.

Source: Assets America


  • A certificate of occupancy is issued by the local governing authority after a property has been inspected and complies with local building standards, particularly safety regulations.
  • The permit is a requirement for the construction of a new building and the purchase of a new home. It may also be required when there are changes in the use of a property, the property was restored or had been added to, or if the owner changes.
  • Any building or structure without a COO cannot be legally occupied or sold. A local court may even order it demolished.


  1. Eberlin, E. (2020.) The Basics of a Certificate of Occupancy. The Balance Small Business. Retrieved from https://www.thebalancesmb.com/what-is-a-certificate-of-occupancy-2125096#citation-7
  2. Mastroeni, T. (2017.) What Is a Certificate of Occupancy? Proof Your Home Is Safe. Realtor.com. Retrieved from https://www.realtor.com/advice/sell/what-is-a-certificate-of-occupancy/
  3. Li Cain, S. (2020.) What is a certificate of occupancy? Why homeowners or investors may need one. Bankrate. Retrieved from https://www.bankrate.com/real-estate/certificate-of-occupancy/
  4. Backman, M. (2020.) What Is a Certificate of Occupancy? Millionacres. Retrieved from https://www.fool.com/the-ascent/mortgages/
  5. Di Jensen, E. (n.d.) What Is Required for a Certificate of Occupancy? Home Guides SFGATE. Retrieved from https://homeguides.sfgate.com/required-certificate-occupancy-76496.html
  6. Michael Zenreich Architect, PC. (n.d.) Certificates Of Occupancy. Retrieved from https://www.mzarchitects.com/certificates-of-occupancy/
  7. Design Everest. (2020.) From Permits to the Certificate of Occupancy – What You Should Know Before You Build. Retrieved from https://designeverest.com/blog/what-you-should-know-before-you-build/
  8. Sherman, F. (2019.) How to Get a Certificate of Occupancy. Bizfluent. Retrieved from https://bizfluent.com/how-2079973-get-certificate-occupancy.html
  9. Billock, J. (2019.) Do You Need a Certificate of Occupancy to Sell Your House? HomeLight. Retrieved from https://www.homelight.com/blog/certificate-of-occupancy/
  10. Gosine, S. (2019.) Buying on a Temporary Certificate of Occupancy in NYC. Hauseit. Retrieved from https://www.hauseit.com/buying-on-a-temporary-certificate-of-occupancy-nyc/

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