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Closing out construction can elicit a mix of excitement and stress. The proprietor eagerly anticipates moving into their newly constructed edifice, either for operational purposes or to put it on the market. Simultaneously, Certificate of Occupancy are poised to receive final payments and channel their earnings into the next venture.

Initiating the Certificate of Occupancy Process

Certificates of occupancy are typically issued by local building authorities, commonly government agencies or building departments. These certificates become necessary when a property undergoes new construction, is converted to a different usage classification, experiences significant renovations, or undergoes a change in ownership. The specific requirements hinge on the building’s location and its intended use.

Obtaining a certificate of occupancy occurs toward the final stages of closeout, serving as a municipality’s method to verify a building’s safety post-construction but before it is utilized. The local building authority conducts inspections and ensures all permits are closed, checking whether the structure aligns with relevant codes and laws.

Certificate of Occupancy
Certificate of Occupancy

The Significance of a Certificate of Occupancy

In many locales, a certificate of occupancy is a prerequisite for selling a building, renting out units, or opening a business. For property owners, securing a CO signifies the readiness of a building to fulfill its designated purpose and provide a return on the investment made in its construction.

Securing a certificate of occupancy stands as one of the concluding steps in the project closeout process for contractors. For them, a CO signifies the successful completion of pivotal aspects of their work. Additionally, certain contracts stipulate the necessity of an occupancy certificate for contractors to receive their final payments, a topic we will delve into further below.

In some regions, obtaining a CO is imperative for activating utilities within the building. For instance, in Dallas, approval must be secured from building, electrical, and plumbing/mechanical inspectors before electricity can be switched on.

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Components of a Certificate of Occupancy

The information encompassed in a certificate of occupancy typically includes:

  1. Building details: Address and square footage of the building.
  2. Owner’s name.
  3. Occupancy Classification: Certifying the building as residential, commercial, retail, industrial, or mixed-use.
  4. Construction details.
  5. Inspection information: Types and completion dates.
  6. Number of occupants.
  7. Date of issuance.
  8. Signatures.
  9. Conditions or provisions.
Components of a Certificate of Occupancy
Components of a Certificate of Occupancy

Securing a Certificate of Occupancy for Construction Projects

Typically, the responsibility of obtaining a certificate of occupancy falls on the general contractor. However, this task can also be undertaken by the building owner or a representative acting on their behalf, such as a construction manager or owner’s representative. The individual applying for the CO is obligated to participate in all inspections.

Initiating the process of obtaining a certificate of occupancy almost invariably begins with reaching out to or visiting the website of the local zoning or building authority. This is done to understand the procedures involved and the requisite documentation. Examples from various locations like Dallas, Miami, New York City, Larimer County (CO), and Boise can offer insights into specific requirements.

While the prerequisites vary depending on the building’s purpose and location, the standard procedure for obtaining a CO typically involves the following:

Application

Most places have a standardized application requesting essential information for completing a certificate of occupancy (refer to the previous section on “What’s Included in a Certificate of Occupancy”). The application process often necessitates the submission of additional documents, demonstrating compliance with local building codes. In locations such as Boise, ID, the application frequently includes a list of required documents. Common documents comprise:

   – Copies of plot/site plans illustrating aspects like the building’s current layout, accessibility for individuals with disabilities, and points of access for pedestrians and vehicles.

   – Copies of construction plans outlining details such as floors, ceilings, exits, framing, plumbing, and lighting.

   – Questionnaire regarding hazardous materials.

   – If the building accommodates businesses or services related to food, a letter of approval from the local Health Department may be required.

Passing Inspections

Various inspections are typically mandated, tailored to the specific nature and intended use of the building. These inspections are essential for closing out work permits issued at the commencement of construction. Each inspection must be scheduled separately, often aligned with construction milestones, and conducted by an inspector licensed for the specific type of inspection. Applications or websites, such as the one for New York City, usually outline the required inspections. Possible inspections encompass:

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   – Fire safety.

   – Electrical.

   – Plumbing and sewer.

   – HVAC.

   – Insulation.

   – Mechanical systems, including elevators or irrigation.

   – Final inspection.

Settle Fees

Fees are typically detailed on a municipality’s website and are determined by factors such as the occupancy classification (residential, commercial, etc.) and square footage. All other fees and penalties associated with the building must be settled before a certificate of occupancy can be issued.

What if a Certificate of Occupancy Is Declined?

There are various reasons why an inspector might choose not to issue a certificate of occupancy, such as the inability to open windows, insufficient storm drainage, improper signage for fire exits, lack of adequate smoke or carbon dioxide detectors, or a lack of accessibility for people with disabilities. Certain places, like Rockhill, Missouri, or Monroe Township in New Jersey, provide a checklist of items that inspectors will scrutinize.

The reasons for not passing should be outlined in the inspection report. The local building authority will specify a timeframe for addressing these issues. It is the responsibility of the contractor (or the individual applying for the CO) to rectify the issues and schedule another inspection to ensure the work has been completed. Additional fees are typically charged for any supplementary inspections.

What if a Certificate of Occupancy Is Declined?
What if a Certificate of Occupancy Is Declined?

What is a Temporary Certificate of Occupancy?

Some building authorities offer a provisional or temporary certificate of occupancy (TCO), indicating that a building is generally safe but has minor issues to address before receiving a final CO. In Dallas, a TCO can be obtained when the rest of the building is completed, but issues related to “non-life safety,” such as landscaping, are nearing completion. Depending on the location and outstanding issues, obtaining a TCO may mean the building is safe or partially safe for occupancy.

A temporary certificate of occupancy can be beneficial to keep the closeout process moving while resolving minor issues. Some contractors strategically pursue TCOs by planning ahead to obtain them on projects where extensive details, such as landscaping or installing a pool, do not impact the safety of the actual building.

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TCOs typically entail an additional fee, separate from the fee charged for the final CO. Temporary certificates of occupancy also have an expiration date and usually cannot be renewed. Therefore, issues must be resolved, and an inspection for a final CO must be scheduled within the given time frame. Most TCOs expire after approximately 90 days, although some places follow different protocols. For instance, TCOs in Evanston, IL, must be applied for every 30 days and cost $125 each. In Larimer County, Colorado, a TCO expires after 180 days and carries a fee of $600.

What Happens if a Certificate of Occupancy Is Not Attained?

Persistent failure to obtain a certificate of occupancy can lead to substantial delays in the project closeout. These delays can result in financial losses for the building owner and, in extreme cases, the general contractor may be liable to pay liquidated damages.

Opening a building for use without a CO can have severe consequences for the owner. In such instances, many local governments initiate legal action or impose recurring fines. Most buildings cannot be sold without a certificate of occupancy. Tenants who discover that their building lacks a certificate of occupancy often have the option to terminate their lease and, in some cases, pursue legal action to recover funds.

Asia Pacific Project’s advice construction service provides advice on Certificate of Occupancy

The process outlined above underscores the importance of seeking construction advice services. To navigate the complexities of obtaining a certificate of occupancy and addressing potential issues during the project closeout, individuals can benefit from valuable guidance and insights offered by construction advice services. For further assistance in this realm, consider exploring the services provided by APPMV (Asia Pacific Projects)


Please send information or requests that you need to consult for Asia Pacific Projects via:

NGUYEN THI HIEU | Local Relations

Mobile phone: +84 918 331 489

Email: hieu.nguyen@appmvn.com

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