What is a CO in Construction?

February 26, 2024

A Certificate of Occupancy ("CO" or "C of O") authorizes the use of a building for the intended purpose. In New York City CO's are issued by the Department of Buildings ("DOB"). A CO is based on the completion of construction and inspections to ensure compliance with the NYC building codes (including the Zoning Resolution) and to verify that the property can support its proposed uses.

A final CO requires that the DOB inspector find the building "complies with all applicable laws, all paperwork has been completed, all fees owed to the Department have been paid, and all relevant violations have been resolved." It also confirms that the work was done by a licensed contractor and is fit for occupancy. The CO is usually valid for 90 or 180 days. If significant issues are discovered during a final inspection, the contractor is responsible for fixing them and scheduling another CO inspection.

The issuance of the CO can be linked to a contract's terms, particularly those that require a retainage (typically 5%-10%) to be withheld from the general contractor until the project is "substantially complete." The issuance of a final CO often triggers the release of this retained money to the contractor.

In some cases, the failure of a general contractor to obtain a CO can result in serious consequences for the owner and other contractors. In particular, tenants can break their leases if they find out that the landlord does not have a CO for the building and the DOB may issue fines or liquidated damages. It is wise for potential buyers to check a building's CO status before making a purchase in order to prevent problems and delays. You can check for a building's CO on DOB's website using the applications link (if you have the job or co number) or the jobs/filings link (for properties without a job or co).


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