Legal
Certificate of Occupancy
A document issued by a local government that certifies a building meets building codes and is safe to inhabit. A certificate of occupancy is required for new construction before anyone can move in and may also be required when a property changes use. Some municipalities require a new certificate of occupancy when a home is sold, which can delay closing if code violations are found.
Why It Matters
Certificate of Occupancy carries legal significance in real estate transactions. Property law, contract law, and lending regulations all intersect when buying a home, and terms like certificate of occupancy have specific legal definitions that affect your rights and obligations as a buyer or homeowner.
While real estate agents and lenders can explain general concepts, for questions about certificate of occupancy that could have significant financial or legal consequences, consulting a real estate attorney is worth the $200-$500 cost. In some states, attorney involvement in real estate closings is mandatory.
Real-World Example
Legal issues related to certificate of occupancy can surface during title searches, contract negotiations, or closing. Catching problems early is far less expensive than resolving them after you've closed on the property.
Pro Tip
If you're buying in a state that requires attorney closings (CT, DE, GA, MA, NY, SC, WV, and others), your attorney will handle certificate of occupancy-related legal matters. In other states, consider hiring one independently for a review of your purchase contract.