A certificate of occupancy (CO or C of O) is a document issued by a local building or zoning authority certifying that a structure complies with applicable building codes and is safe for its intended use. In the short-term rental context, a valid CO is often a prerequisite for obtaining a host permit or business license, confirming that the property is legally approved for residential occupation. Properties with unpermitted additions, converted spaces, or outstanding code violations may be denied a CO, which in turn prevents legal STR operation. Operators purchasing properties for STR use should verify CO status during due diligence to avoid costly compliance remediation after acquisition.
Why this matters for property managers
Without it, a property may not be legally habitable, which can void insurance, block financing, and expose an operator to fines or forced closure regardless of how well the unit performs. It also protects guests by confirming the building meets safety and code standards, reducing liability if something goes wrong. Requirements and renewals vary by jurisdiction, so status should be verified with the local building authority before renting.
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