What Is A “C of O”

A “C of O” or Certificate of Occupancy, is a document that states all the structures on a piece of land. Things like a pool, shed, deck, additions to the home, sometimes Central Air Units. Every house has one when it is built and it is recorded with the town. The problem sometimes is that an owner will do improvements to the home and not have them recorded on the “C of O” because it almost always raises your taxes. But when you sell, a survey of the house is done, (which is a drawing of the house) and if the survey doesn’t match up to what the town has in it’s records, then 99 times out of 100, the bank won’t lend money on the home until those items are recorded on the town’s “C of O”. It can hold up a sale and sometimes kill it. Usually it is the home owners responsibility to fix any problem like that, but with a short sale or a foreclosure, it could be left up to the buyer to pay for any fees needed to get a new “C of O”. This is because the seller of a short sale doesn’t have money to pay the mortgage, so where are they going to get the money to pay for what needs to be done to update the “C of O”. Sometimes the bank will waive the “C of O” issue if it is small but they are being very picky now with the mortgage fallout. A bank owned property with a “C of O” issue is usually handled by the bank, but sometimes they try to pawn it off to the buyer. Every situation is different and your lawyer will help you to get it settled. Make sure your real estate agent inquires about any possible “C of O” issue with the home you are buying.