Certificate of Occupancy: A Key to Your New Home or Business

What is a Certificate of Occupancy

When navigating the complexities of buying or selling property, whether residential or commercial, one crucial document that often comes into play is the Certificate of Occupancy (CO). This certificate plays a pivotal role in the real estate transaction process, serving as a green light that the property is suitable for occupation. Understanding the nuances of a Certificate of Occupancy can make a significant difference in your real estate endeavors. Let’s dive into what a CO is, why it’s important, and how it affects property transactions.

What is a Certificate of Occupancy?

A Certificate of Occupancy is an essential document issued by a local government agency or building department certifying a building’s compliance with applicable building codes and other laws. It indicates that the property is in a condition suitable for occupancy. The criteria for issuing a CO can vary significantly from one jurisdiction to another but generally involve a series of inspections to ensure the property meets specific safety, health, and building standards.

Types of Certificates of Occupancy

Certificates of Occupancy can be categorized based on the nature of the property and the extent of the work completed. These categories typically include:

  • New Construction: Issued for newly constructed buildings once they have passed all inspections, ensuring they are safe for occupancy.
  • Change of Use: Required when a building’s use is converted from one type to another, such as from commercial to residential or vice versa.
  • Renovations: Necessary for buildings that have undergone significant renovations or modifications to ensure the changes meet current building codes.

Why is a Certificate of Occupancy Important?

The importance of a CO can be viewed through multiple lenses:

  • Safety and Compliance: It certifies that the property is deemed safe for occupancy, adhering to local building codes and standards. This is crucial for protecting the well-being of its occupants.
  • Legal Occupancy: Without a CO, using a building for residential or commercial purposes might not be legal. This can have serious implications, including fines or legal action.
  • Financing and Insurance: Banks and lending institutions often require a CO before closing on property loans. Similarly, insurance companies might require a CO to provide coverage.
  • Selling or Leasing Property: A CO is typically required when selling or leasing a property. It assures potential buyers or tenants that the property is legally habitable.
Home Under Construction

Home Under Construction

Obtaining a Certificate of Occupancy

The process for obtaining a Certificate of Occupancy varies by location but generally involves the following steps:

  1. Application: Submit an application to the local building or zoning authority. This may require detailed plans of the building, its intended use, and any work to be done. In New Hanover County, all of this is done through their COAST application system. In Brunswick County, the Code Administration handles COs and in Pender County, residents use the PORT.
  2. Inspections: The building will undergo several inspections focusing on safety, health, and building code compliance. These can include structural, electrical, plumbing, and fire safety inspections.
  3. Corrections: If any issues are identified during the inspections, these must be corrected and re-inspected before a CO can be issued.
  4. Issuance: Once the property passes all inspections, the local government issues the Certificate of Occupancy.

Challenges and Considerations

While obtaining a CO is straightforward in theory, in practice, it can present challenges. Delays can occur due to the discovery of non-compliance issues, backlogs in the inspection process, or disputes over building code interpretations. Property owners and developers should plan for these potential delays by starting the CO process early and engaging professionals who understand local regulations and processes.

The Certificate of Occupancy is a testament to a property’s safety, legality, and readiness for use. Whether you’re a homeowner, a business owner, or a real estate professional, understanding the significance and process of obtaining a CO is crucial for any property transaction. By ensuring your property has a valid CO, you’re not just complying with legal requirements; you’re also providing peace of mind to everyone involved in the property’s life cycle.

About the Author
Meghan Henderson
Meghan is the Marketing Specialist for The Cameron Team and a published author of two young adult books. She also creates digital and printable planners and trackers, as well as coloring pages for Larkspur & Tea.