General Question

AshlynM's avatar

Do I need a certificate of occupancy to rent my house out?

Asked by AshlynM (10183points) June 28th, 2011

My house was built in 2003. I have a mortgage on it.

My tenants have already been renting from me for almost a year now. Will I get in trouble if I don’t have a certificate of occupancy? Am I supposed to have one?

This is for Indiana.

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9 Answers

YARNLADY's avatar

In my experience, the only Certificate of occupancy requirement from the Mortgage company is to prove the owner of the house will occupy the house. They use different rates and requirements on lending money for rentals than for owner occupied homes.

If the mortgage company wants to know who is occupying the house, it could mean they are going to require a change in the terms of the loan.

adamwilliams's avatar

In UK the mortgage have to be consulted as they may, or may not be happy to allow you to rent out. They are entitled to foreclose if you do it without their consent.

Tropical_Willie's avatar

Certificate of Occupancy is called a “C. O.” says a new house has ==> “sewer is hooked-up, water is drinkable and has minimum pressure…” and can lived in this is required by a mortgage company to lend the money.
There may be an issue with the mortgage company because the house is not “Owner Occupied”. Find your mortgage agreement and re-read it for a requirement for the house to be “Owner Occupied”.

choreplay's avatar

I remember a professor in college talking about banks strategies when it comes to their regulators, which was, it is better to ask for forgiveness than permission. The letter of the law is, this is all probably laid out in your mortgage agreement, but I see it day in and day out, banks don’t take a very aggressive position on this, they really just a return of and return on the money they lend. I would rarely say something like this but I would continue to rent it out and if they don’t ask don’t tell.

My understanding is that certificate of occupancy is for residences newly constructed.

If you want to be safe on this I would ask an attorney specializing in real estate leasing. Answering a question like this shouldn’t take much effort on their part and shouldn’t cost much even from the ones with high hourly rates.

P.S. I do not know the rules in your state.

Judi's avatar

Where is the house? In my experience, the certificate of occupancy is issued by the building department certifying that the construction (when the house was new) was to code.
If the area you live in is pro private property rights then you shouldn’t need anything else to rent it out.

Cupcake's avatar

I bought a 90 year old house that had been abandoned. I was required to get a C of O prior to moving in, and would have needed one if I was going to rent it out.

Has your house ever been deemed empty or inhabitable?

AshlynM's avatar

It had been empty for one year while I was busy moving.

Judi's avatar

2AshlynM, As long as it wasn’t condemned you should be OK.

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