How to Obtain a Certificate of Occupancy for Short-Term Rentals

As daunting as the process of obtaining a certificate of occupancy may sound, it does not have to be overly complicated. We are here to answer your most common questions about the certificate of occupancy and help you move forward with confidence.

The requirements differ slightly depending on the property’s location, so it’s essential to check with your local government to be sure of your next steps. In this article, we will break down what a certificate of occupancy is, when they are necessary for short-term rental owners and the process of obtaining one in major U.S. cities.

What is a certificate of occupancy?

A certificate of occupancy serves a few purposes. First of all, it is a document stating that your property is safe for occupancy and complies with all applicable standards. It also states that the property is in compliance with all area building codes. Finally, it states what the property is being used for, whether residential, commercial, retail, or industrial.

By law, it’s almost always necessary to have a valid occupancy certificate for any structure that will have humans in it. If you’ve ever bought or sold a home, you’ve likely had to navigate the process in some capacity. As a short-term rental property owner, it’s essential to understand the certificate of occupancy and make sure you are in compliance with all the requirements.

Are certificates of occupancy mandatory for short-term rentals?

The short answer: yes. Any place people will live in, long-term or short-term, likely needs a certificate of occupancy (with a few exceptions).

Having a valid certificate of occupancy is necessary to obtain a vacation rental license, so you will run into it at some point in your journey to becoming a short-term rental property owner. It is illegal in most states in the U.S. to rent a property without having one.

Occupancy Certificate for Short Term Rental License

Suppose you are buying a property that is already being used residentially and you don’t plan to make any changes. In that case, you may not need to worry about getting a new certificate of occupancy. Even if you don’t need to apply for a new one, you will have to track down the certificate from the previous owner.

In any case, it’s one of those areas where you don’t want any surprises. You should always be aware of your property’s certificate of occupancy status to make sure you are within regulations.

When is it necessary to have a certificate of occupancy?

There are a few instances when obtaining a certificate of occupancy will be necessary. If one of the following situations applies to you, you will need to apply for one.

Building a new property

New builds will almost always need to get a certificate of occupancy because they have never been previously occupied. It can take time to get through all the different inspections so you should start thinking about obtaining your certificate as early on in the process as possible. Especially if you want to hit the ground running with your short-term vacation rental business with a new build.

Changing the use of a property

If you plan to change the use of a property, you will need a new certificate of occupancy. For example, converting an office space into a residential apartment. The requirements for each use are usually different so keep in mind that you will likely need to make changes to the property to obtain the certificate. It’s best to reach out to the appropriate government agency in your area to understand what exactly is required of you.

Certificate of Occupancy for New Property

Building additions

In most cases, a certificate of occupancy is necessary when building any additions like additional rooms, porches, etc. Every square foot of a property goes under thorough inspection before issuing the certificate, and your addition will be held to the same standards. Before starting any renovations, check the requirements of your area to avoid violation fees.

Making any structural modifications that change exits and/or fire safety

This is especially important to know in the case of fix-and-flip properties. If any of the changes you plan to make will change the way you exit the property, you will have to apply for a new certificate of occupancy. This is mostly due to its effect on the fire safety of the structure. Keep this in mind while planning your renovations.

It is not necessary to obtain a certificate when a property changes ownership and/or tenants but the use of the property remains the same. Therefore, if you plan to purchase a property that is already listed as a residential property and you don’t plan to make any structural changes you likely will not need a new one. You will, however, need to track down the current certificate of occupancy from the previous owner in order to legally rent the property.

What’s the penalty for not having a certificate of occupancy?

The penalty for not having a certificate of occupancy when necessary are nothing to joke about.

It depends largely on the laws in your area. Generally, if you are found renting a property without an occupancy certificate you can be sued by the local government and/or fined for every day you needed to have the certificate and did not have it. It could put a huge dent in both your business trajectory and your wallet.

Penalty Fee for Not Having Certificate of Occupancy

Most states issue both temporary and permanent certificates of occupancy and you should be in possession of one of them throughout the entire timeline of your short-term rental property business.

Main requirements to get a certificate of occupancy

Requirements differ depending on your area so you should always check with the local government for a final answer.

Many inspections

The main purpose of the certificate of occupancy is to demonstrate that a property is safe for occupancy. That means you can expect to go through tons of different inspections before being issued the certificate: everything from construction to plumbing and electrical inspections. This is why the process can get drawn out and you should start as soon as possible.

Building permit where applicable

You will likely have to present your building permit for new construction of any kind (whether it’s building a property from the ground up or renovations/additions). In the case of fix-and-flip properties, a temporary certificate of occupancy (which is valid for 90 days) may be necessary while you are in the flip process but don’t have tenants yet. Every situation is unique.

The deed

The deed is the legal document demonstrating the transfer of ownership from the seller to the buyer. You will likely have to provide the deed when applying for the certificate to show that you legally own the property.

Who issues the certificate of occupancy?

Certificates of occupancy are issued by the local government in your area. It typically falls under the jurisdiction of the department of housing. When in doubt, doing a quick google search for “certificate of occupancy in <your city>” will give you a good idea of who is responsible and what the requirements are.

Requirements for Certificate of Occupancy

How to obtain a certificate of occupancy in the main U.S. cities:

The process can look slightly different depending on where your property is located. Take a look at these quick overviews of the requirements in the major U.S. cities.

Certificate of occupancy in NYC

NYC Department of Buildings (DOB) issues both temporary and final certificates. A temporary certificate of occupancy is valid for 90 days and can be obtained when a property is safe but still needs additional work to qualify for a final certificate of occupancy. To get a temporary certificate of occupancy in NYC you will need the following documents:

  • Temporary Construction Inspection Sign-off
  • Temporary Electrical Inspection Sign-off
  • Temporary Plumbing Sign-off
  • Temporary Elevator Sign-off

The following documents are required to obtain a final certificate of occupancy 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
  • An approved Schedule of Occupancy in DOB NOW: Build.

NYC DOB doesn’t require a certificate of occupancy for properties built before 1938 “so long as their uses, exits and occupancy levels remain unchanged.” In which case, you will need to apply for a Letter of No Objection. Other cities are very similar in their certificate of occupancy requirements but keep in mind that each property is different and the only way to be 100% sure of what documents are required is to start the process.

Certificate of occupancy in Los Angeles

In Los Angeles, you can apply for a certificate of occupancy through the Los Angeles Department of Building and Safety (LADBS) website. Just like NYC, you can apply for both a temporary and/or final certificate of occupancy. Unfortunately, LADBS is not as clear about the certificate of occupancy requirements on their public website. They recommend contacting the inspector for your project to understand what exactly you will need to present.

Los Angeles Certificate of Occupancy

Certificate of occupancy in DC

In DC, you can apply for a certificate of occupancy through the Department of Consumer and Regulatory Affairs (DCRA) website. Regardless of what type of credentials you are applying for, DCRA states that the following supporting documents are always required:

  • Lease, deed, letter of permission from the property owner to use the property
  • Building Permit, if applicable
  • Most recent certificate of occupancy on record
  • All rough/close-in and final inspection reports
  • Special Inspections Final Statement of Special Inspections, as required

For a temporary certificate of occupancy in DC, you will need to present the following documents with your application:

  • Building plat depicting all existing and proposed structures
  • Floor plan showing the proposed use and egress
  • Structural details for tents (tie-down details)
  • A letter from the property owner stating the reason why a temporary certificate of occupancy is needed. The letter shall identify the floor number, unit number, number of units, and/or areas to be included in the temporary document (e.g., number of parking spaces)

Certificate of occupancy in Philadelphia

You can apply in person or online through the City of Philadelphia eCLIPSE site. They claim that applications are usually processed within 20 business days. In Philadelphia, a certificate of occupancy is issued upon completion of most building permits without submitting a separate application. Visit the City of Philadelphia website for more information about the process.

Other cities

Don’t see your city on our list? Don’t worry! Finding the requirements for a specific city is not particularly difficult. Start with a quick Google search to see what initial information is available. You may be surprised by how much you can dig up with an Internet search.

That said, some cities are not as upfront about the requirements and you’ll have to do some digging. We recommend contacting your local authority to get further information on what documents and procedures will be necessary to obtain the certificate of occupancy.

If you know any short-term rental property managers in your area, don’t be afraid to reach out and ask them what process they went through. Keep in mind that every property is different so this is a good starting point but you may need to go through different and/or additional steps for your unique property.

Main takeaways

Whether or not it will be your responsibility to apply for a new certificate of occupancy, it is important to be aware of your property’s certificate of occupancy history and ensure that you are within regulations. The process does not have to be complicated but it does take time so be sure to start thinking about it as soon as possible.

Remember, you can not rent a property without having a valid certificate of occupancy – this is really important! Being extra prepared in this area is the best way to set yourself and your business up for success. After all, we want you to hit the ground running with your short-term rental property business!

What do you think about this article?

4/5 - (1 vote)
Show Comments (0)

Your email address will not be published. Required fields are marked *

Ready to take more direct bookings?

No set up fees, no credit card details, no obligation. Try Lodgify free for 7 days.