Certificate of Occupancy: 101 for Short-Term Rental Hosts

certificate of occupancy

By The Hospitable Team

Whether you’re looking to host business travelers or turn your house into a kid-friendly Airbnb, one of the first things you’ll need to do is get a certificate of occupancy. This legal document proves that your short-term rental property is safe for people and meets all the necessary building codes.

In this blog, we’ll talk about what a certificate of occupancy is, when you need one, and explain how to get a certificate of occupancy in the main US cities and states. We’ll also provide some information about the penalty for no certificate of occupancy.

We do not intend to give legal advice. The laws may change, so it’s best to consult your lawyer before submitting applications. Still, this article will work as the starting point in understanding the concept of the Certificate of Occupancy.

Table of Contents

What Is a Certificate of Occupancy, and Why Do You Need One?

A certificate of occupancy (CO) is a special permit issued by a local government or zoning department that certifies a building is safe and ready for occupancy. This document verifies that the structure complies with local building codes, safety requirements, and usage regulations.

The cost of getting a CO can range from $100 to $1000 depending on the size of the property and the US state where it is located. The document is generally valid for the life of the building or until there’s a change in the property’s use or occupancy that requires a new CO.

In addition to the property address and owner, a CO generally includes some other specific information:

  • The type of property (a single-family home, multi-family home, apartment building, etc.)
  • The primary use of the property (residential use, commercial use, industrial use, etc.)
  • The condition of the property (structure integrity, electric wiring, plumbing, etc.)

A certificate of occupancy is used to track the condition and status of your real estate property. You need to update it accordingly every time any changes are made to the property that may impact the primary information.

You may need a new certificate of occupancy when constructing a new real estate property, making renovations to an existing one, buying Airbnb property that has been previously occupied, and if you plan to change how the building is used.

You also need to obtain a certificate of occupancy if you want to start a short-term rental business. This legal document is necessary in many cities to obtain a short-term rental license. A certificate of occupancy ensures that your home or apartment is safe for guests and allows you to run your business and rent out your space legally. Getting it is your first step to success on your hosting journey.

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Temporary Certificate of Occupancy

Depending on the location, you may be allowed to get a temporary certificate of occupancy (TCO) if the building/zoning department doesn’t want to issue a permanent one yet. It grants the same rights as the CO, but only temporarily.

You may get a TCO if the building is generally safe for people to be in. Still, minor issues must be resolved before you receive a final CO. A temporary certificate of occupancy often expires after 90 days. It usually can’t be renewed, so issues must be resolved, and an inspection for a final CO scheduled in the given time.

What Is the Penalty for No Certificate of Occupancy?

The penalties for not having a certificate of occupancy in the USA can vary depending on the local building codes and regulations. Generally, if a property owner lives in or rents out a property without obtaining a certificate of occupancy, they may face fines, legal action, and other penalties. In addition, if you don’t have a certificate of occupancy, it may be difficult to obtain financing or insurance for your property.

The fines for occupying the property without a valid CO may range from a few hundred dollars to several thousand, and the penalty can even possibly be jail time and community service. It’s also common to fine people a certain amount of money every day they occupy a building without a certificate. For example, in Texas, the penalty for moving into a building without a certificate of occupancy may include fines up to $2000 a day until the violation is corrected.   

How to Get a Certificate of Occupancy

To obtain a CO, contact your local building or zoning inspection office and find out what documentation you’ll need to provide to apply for it. You can usually find such information on your local government’s website.

The process for obtaining a certificate of occupancy can vary from state to state, but in general, it includes several steps. First, you must submit an application form to your county or municipality—you can do it online or in person and pay a filing fee. Once approved, you can contact your assigned inspector to arrange inspections noted in your administrative permit.

Each city has its laws, so the inspection process for your property could vary. Typically, your municipality will send an approved inspector to check fire safety, electrical wiring, and plumbing systems and perform a general property inspection. The inspector will compare the structure to the current building code to determine if there are any violations.

Once the inspection has been completed, you’ll receive a report outlining your property’s details and whether you pass. If approved, you can pay all applicable fees and claim your certificate of occupancy.

If you fail, you’ll receive a list of issues that need to be fixed, and your municipality will decide how much time you’ll be given to make the necessary repairs and improvements to bring the property up to code. Once you complete the repairs, you’ll have to pass another CO inspection and submit your application for approval again.

If your property meets all safety and building standards, the local building authority will issue the certificate of occupancy. It can take up to a week to receive your certificate of occupancy, depending on how busy your local building office is. Then, you can list your property on Airbnb and other OTA websites and start accepting guests.

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Certificate of Occupancy Checklist: Requirements for Hosts

You must provide all the required documents when applying for an occupancy permit. They may include copies of a site plan showing all property lines and parking spaces and copies of your detailed construction plans, including the plans for the floor, ceilings, exits, framing, and lighting. Also, you may need to include the electrical, mechanical, and plumbing plans.

You need to pass all the required inspections, which may include:

  • Fire safety inspection
  • HVAC inspection
  • Plumbing and sewer inspection
  • Electrical inspection
  • Mechanical systems inspection like elevators and irrigation
  • General building inspection

When you’re building a property or significantly renovating it, it’s important to consider all the inspections you need to pass and ensure that your building meets the following requirements:

  • Landscape requirements
  • Adequate parking
  • Street setback requirements
  • Conforms to signage limits
  • Adequate storm drainage
  • Access for the disabled

A good idea is to develop a detailed certificate of occupancy checklist to ensure you’re preparing your house or apartment correctly.

Certificate of Occupancy in NYC

In NYC, temporary and final certificates of occupancy are issued by the Department of Buildings (DOB) after several inspections occur and all construction is completed. The TCO is usually valid for a maximum of 90 days, and you can get it when the DOB accredits a building but doesn’t have all the necessary building permits.

The Department of Building issues a final NYC certificate of occupancy after a final inspection occurs and when the completed work matches the submitted plans for new buildings or major alterations. The CO will be issued after the assigned inspector has verified that the construction is complete and the building is safe. The final CO has no expiration date unless significant structural changes are made to the property.

You are required to provide the following documents to get the final CO in NYC:

  • Final Construction inspection Sign-off
  • Final Plumbing inspection Sign-off
  • Final Elevator Sign-off
  • Final Electrical Inspection Sign-off
  • Final Building survey
  • Final Builders Pavement Plan (BPP)
  • No open applications
  • No open violations
  • Owner’s Cost Affidavit (PW3)
  • An approved Schedule of Occupancy in DOB NOW: Build.

You can submit a request for a certificate of occupancy in DOB NOW—the Department’s self-service online tool. Technical and operations staff will review the request, and a CO will be issued if all requirements are met. Typically, it takes 6 to 12 months to get a certificate of occupancy in NYC.

Remember that NYC DOB doesn’t require a certificate of occupancy for buildings built before 1938 if their uses, exits, and occupancy levels remain unchanged. In this case, you will need to contact the Department’s borough office where the property is located and apply for a Letter of No Objection.

Certificate of Occupancy in NJ

All rental properties in New Jersey are required to have a certificate of occupancy before a tenant can move in to ensure that the building is up to code. Property owners may apply for a certificate of occupancy in NJ by applying to the local municipality’s Office of Housing Inspections.

An application fee varies depending on the location since each municipality has its own rates. Once you pay the fee, the office will schedule an inspection. Typically, a certificate can be issued within ten working days.

General requirements to obtain a certificate of occupancy in New Jersey include:

  • Application for inspection and assurance of certificate of occupancy
  • Landlord registration form
  • Sixty-day conditional CO
  • Termite report
  • Residential occupancy certificate checklist

You’ll also need to provide:

  • Completed construction application
  • Completed building, electrical, plumbing, and fire subcode applications
  • Layout drawing by a New Jersey licensed architect
  • Zoning officer approval

Certificate of Occupancy in DC

According to the information available on the government website, the purpose of a certificate of occupancy in DC is to ensure that the use of a building, structure, or land in the District of Columbia conforms to the Zoning Regulations (DCMR Title 11) provisions of the DC Construction Codes, and the Green Building Act.

In most cases, no one can use a building, structure, or land in the District of Columbia for any purpose other than a single-family dwelling until a valid certificate of occupancy has been issued.

Property owners can submit applications for CO through the DC Department of Buildings digital platform, Certifi. Keep in mind that DOB doesn’t accept mailed applications. There are six types of CO applications: ownership change, use change, occupant load change, revision, temporary occupancy, and new building. Certifi will guide you through each of these application types.

With your CO application, you must also submit some supporting documents, including a lease, deed, letter of permission from the property owner to use the property, and Floodplain Elevation certificate.

If the Permit Center approves your application, your business will be issued a Certificate of Occupancy number. If your business is located in DC, this number is required to get any business license.

Certificate of Occupancy in California

The California Building Code (CBC) states that no building or structure can be used or occupied until a building official has issued a certificate of occupancy. The penalties for operating without a certificate of occupancy in California can include fines of up to $1000 a day until the violation is corrected.

If your property is in Los Angeles, you can apply for a certificate of occupancy through the Los Angeles Department of Building and Safety (LADBS) website. Property owners can apply for both a temporary or final certificate of occupancy. But unfortunately, the LADBS public website doesn’t provide clear information about the certificate of occupancy requirements. Instead, they recommend contacting the inspector to determine what you need to present.

Certificate of Occupancy in Philadelphia

In Philadelphia, a certificate of occupancy is required for new construction, additions, alterations that impact exits or fire ratings, and projects that change the use or occupancy of a building. It’s not required for existing one-or-two-family homes, and if the owner, tenant, or residents have changed, but the building use remains the same.

In Philadelphia, the Department of Licenses issues a CO and Inspections upon completion of some building permits, so you don’t have to submit a separate application. There is no extra charge for a CO connected to a building permit. But you must apply and pay the fee if you need to get a CO without a building permit.

You can apply for a certificate in person or online through the City of Philadelphia eCLIPSE site, and they claim that applications are usually processed within 20 business days. Once approved, you can schedule an inspection noted on your Administrative Permit.

Bottom Line

Getting a certificate of occupancy is about your home’s safety and peace of mind. This important legal document is a form of s building permit that ensures a property is up to local building codes and safe for people to live in according to local laws, protecting residents from safety issues.

Remember that you can’t rent out your house without a valid occupancy certificate. It protects you as the property owner, the municipality, and your guests from any liabilities that may arise.

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