What Is A Certificate Of Occupancy?
A contract of sale for residential property usually obligates the seller to provide a, “Certificate of Occupancy or other required certificate of compliance, or evidence that none was required, covering the building(s) and all of the other improvements located on the property authorizing their use as a one family dwelling at the date of Closing.”
Sounds complicated but a certificate of occupancy, or “c/o” as they’re commonly referred to, is simply a document issued by a local building department that certifies a building's compliance with local building codes indicating it’s suitable for occupancy.
What’s The Difference Between A Certificate Of Occupancy And Certificate Of Compliance?
The term certificate of occupancy is also used interchangeably with “certificates of compliance.” While a certificate of occupancy is often identified as a document in relation to the house in its entirety, a certificate of compliance is used in reference to documents a local building department will issue for projects which the local authority requires for specific additions and renovations such as kitchen renovations, fences, swimming pools, etc.
What Is The Process To Obtain Either Certificate?
Keep in mind that certificates of occupancy or compliance are the end result of a project. The process overall looks like this:
Step 1: Permit application.
Step 2: Town issues permit.
Step 4: Project completed.
Step 4: Project inspected by local building inspector.
Step 5: Town issues certificate of occupancy or compliance.
What Projects Require Permits?
Generally, a homeowner is obligated to apply for a permit for projects that involve the structure of the building, plumbing, HVAC lines, or survey lines (hence the need for a permit for a fence). For example, in Somers, New York (we’re using Somers as an example because our office is located in Somers), click here and have a look at the Town’s requirements for permits associated with pools, spas, and hot tubs.
By his or herself, the average homeowner will be unfamiliar with how to satisfy all of the permit requirements. Rather, the contractors retained to undertake the project will know what to do in order to obtain a permit that will allow work to begin.
Once the project is completed, either the contractor or homeowner contacts the Town’s building department to schedule an inspection, the purpose of which is to ensure the work was performed according to the Town’s building code. If successful, the Town will issue either a certificate of occupancy or certificate of compliance.
What Are The Consequences If I Don’t Apply For A Permit For A Project That Requires One?
So what’s the big whoop? Can’t a homeowner just hire a guy to install a hot tub? It’s not like the Town drives around looking for unauthorized outdoor hot tubs, right?
That’s true – the Town does not have the resources to police all home projects. However, a lack of a permit and/or certificate of compliance will become an issue if you ever want to sell your home. After a seller and buyer are in contract, the buyer will order what’s called a title report. The title company will search local records to identify all of the permits and certificates associated with the property. And if there’s a big pool in the backyard or a new central air conditioning system but the title report doesn’t identify certificates for the work, guess what happens?
Either the seller has to go about applying for a permit retroactively (which, by the way, are more expensive compared to the cost of permits applied for at the start of a new project), which slows down the entire transaction, or the seller reduces the sale price to compensate the buyer because the buyer will eventually have to deal with what the seller never did.
What If There’s No Certificate Of Occupancy In The Town’s File For My House?
When a house is built prior to when the local town enacted their building codes, a certificate of occupancy for the property will not exist. Rather, the town will issue what’s called a letter in lieu of a certificate of occupancy or just “a letter in lieu of,” for short.
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