Certificate of Occupancy
Also known as: CO, C of O, Occupancy Permit
A document issued by the local building department confirming that a home meets building codes, zoning requirements, and safety standards, and is legally fit for people to live in.
Detailed Explanation
A certificate of occupancy is issued after the local building department inspects the completed home and confirms it meets all applicable codes. Without a CO, the home is not legally habitable.
Your mortgage lender will not fund the loan without a CO, and your homeowner's insurance may not be valid. Moving into a home without a CO could also create legal problems.
Some jurisdictions issue a temporary certificate of occupancy (TCO) when the home is substantially complete but minor work remains. A TCO allows you to move in while the builder finishes remaining items.
In Your Contract
Look for references to "certificate of occupancy," "CO," or "occupancy permit" in the closing conditions section of your contract. The contract may also reference a temporary CO.
Key Points
- 1A CO confirms the home meets building codes and is safe to live in.
- 2Never close without a CO or at least a temporary CO.
- 3Your lender will not fund the loan without one.
- 4A temporary CO means some work is still incomplete.
- 5If the builder pressures you to close without a CO, this is a serious red flag.
Related Content
Have a new construction contract? Scan it for $49 at fineprint.homes
Scan Your Contract