You want to rent commercial property. You have a general idea of the location you are interested in, and you have a list of features you require in that property. And then the leasing agent mentions something called a Certificate of Occupancy and you are confused. What is it and how does it affect you?
We will answer those questions in this article. We are RDS Real Estate, serving the Greater Fort Worth Metro area with affordable industrial space and commercial property or rent. Call us at 817-439-3224 for more information and to arrange for a tour of specific properties.
What is a Certificate of Occupancy?
When you rent commercial property, a certificate of occupancy, also referred to as a CO, is document which states that a structure, such as a house or office building, is safe to inhabit. In addition to the property address and owner, a certificate of occupancy will include the following three things:
- Description of specific legal use and type of property: This indicates what the property is classified as from a zoning perspective, such as whether it’s zoned for residential, commercial, industrial, retail or mixed-use purposes. It ensures the property is being used as intended.
- Verification that the property is up to code: This serves as proof that the property is in compliance and up to date with housing and building codes.
- Confirmation that the property is suitable to be occupied: This confirms that the property conforms to the codes and standards set by your municipality, and the structure is fit for occupancy. Without a CO, the property cannot be legally occupied
How does it affect you when you rent commercial property?
So, a CO is a good thing when you rent commercial property, yes? On the surface, it would appear so; you are protected and assured that the commercial property for lease you are renting is in good condition. Just be warned that obtaining a CO is a lengthy and potentially expensive process.
The complete list of areas covered in a property inspection is typically quite extensive, covering things like:
- Heat and hot water
- Running water
- Working smoke detectors
- Handrails
- Structural integrity of floors, walls, and ceilings
- Waterproof systems and lack of water damage
- Sewer or septic systems
- Fireplaces and wood-burning stoves
- HVAC systems and vent work
- Proper painting and insulation
- Pest infestations
- Safe and maintained landscape work
- Pool and patio safety
- Storm drainage
- ADA compliance
Once these are complete, a representative from your building department may complete a final inspection to sign off on the building and issue a CO.
Other options.
It is entirely possible that you do not want a CO. Perhaps you do not like governmental interference in a business transaction of this sort. Perhaps you do not want to pay for the inspection or wait for the local government to give you their blessings.
The requirements differ greatly from state to state regarding a Certificate of Occupancy. In fact, within states the requirements can differ from city to county. There are, in fact, many counties where a CO is not required for a commercial property lease. So, what are your other options? Do your homework. Ask your real estate broker if there are properties which do not require a CO, if that is what you truly want.
A final word about RDS Real Estate.
RDS Real Estate is locally owned and operated with over three million square feet of industrial and commercial properties for lease including the following: warehouse for rent, retail space for lease, shop for rent, garage for rent, loft for rent. Properties range in size from 320 square feet to 30,000 or more. Call us today to speak to a leasing agent.