How to Legally Open a Short-Term Rental: Certificate of Occupancy Explained

Short-Term Rental Certificate of Occupancy: Step-by-Step Guide

If you’re planning to launch a short-term rental, one of the first legal boxes you must check is obtaining a Certificate of Occupancy (CO). This document confirms that your property is safe, compliant with local building codes, and legally allowed to host guests.

In this guide, we’ll break down what a Certificate of Occupancy is, when you need one, how to get it, and a clear checklist to help you move through the process faster without unnecessary delays.

What Is a Certificate of Occupancy for Short-Term Rentals?

A Certificate of Occupancy (CO) is an official document issued by a city or county building department confirming that a property:

• Meets building and safety codes

• Is suitable for residential use

• Can legally be occupied

For short-term rental hosts, a CO is often required before you can legally list your property on platforms like Airbnb, Vrbo, or Booking.com.

Requirements vary by city and state, so always verify with your local building department.

Why Do Short-Term Rental Hosts Need a Certificate of Occupancy?

A CO isn’t just bureaucratic red tape, it protects you, your guests, and your business.

You need a Certificate of Occupancy because it:

• Confirms your property is safe for guests

• Allows you to operate legally

• Is often required to obtain:

  • A short-term rental permit or business license

  • Short-term rental insurance

• Reduces liability if a guest is injured

Operating without one can result in fines, forced shutdowns, or denied insurance claims.

When Do You Need a Certificate of Occupancy?

1. Converting a Home Into a Short-Term Rental

Many cities require a CO when you change a property’s use from a private residence to a short-term rental before your first booking.

2. New Construction or Major Renovations

If you’ve:

• Built a new property

• Completed major renovations (layout changes, electrical, plumbing, etc.)

You’ll need a CO before guests are allowed to stay.

How to Obtain a Certificate of Occupancy (Step-by-Step)

While the process varies by location, most hosts follow these steps:

Step 1: Submit an Application

Apply through your local building or zoning department. This usually includes:

• A completed application form

• An application fee

Step 2: Schedule an Inspection

Once submitted, a city inspector will visit your property to verify:

• Fire safety compliance

• Structural integrity

• Electrical and plumbing safety

• Habitability standards

Step 3: Address Any Issues

If the inspector identifies violations, you’ll be given time to make corrections before approval.

Step 4: Receive Your Certificate of Occupancy

Once approved, you’ll receive your CO—allowing you to legally host guests.

What You’ll Need for Your Certificate of Occupancy Application

While requirements differ, most jurisdictions ask for:

• Proof of inspection by a licensed professional

• Floor plan of the rental unit

• Property deed or proof of ownership

• Any required zoning or use permits

• Completed application form

• Application fee (varies by city/state)

Tips to Make the Process Faster and Smoother

• Apply early—don’t wait until your listing is live

• Double-check paperwork for missing documents

• Schedule inspections in advance to avoid delays

• Ask your local building department questions—they’re used to helping first-time hosts

A little preparation upfront can save weeks of back-and-forth later.

What Happens If You Don’t Get a Certificate of Occupancy?

Operating without a CO can lead to serious consequences:

• Fines from local authorities

• Forced suspension of your short-term rental

• Denied insurance claims

• Increased liability if a guest is injured

In short: it’s not worth the risk.

Certificate of Occupancy Checklist for Hosts

Use this quick checklist before applying:

• Completed CO application

• Inspection by a licensed professional

• Floor plan of the rental unit

• Proof of ownership (deed)

• Required permits or zoning approvals

• Application fee

• Inspection scheduled with buffer time for repairs

Final Thoughts

Obtaining a Certificate of Occupancy is a non-negotiable step in building a compliant, professional short-term rental business. While the process may feel tedious, it protects your investment and gives you confidence to scale responsibly.

Once your property is approved and compliant, tools like Guesty can help you automate messaging, scheduling, and operations, so compliance doesn’t turn into chaos as you grow.

👉 Need help with your STR?

 Join our Airbnb Super Host Academy on Skool or book a call with the BNB Guardians team for hands-on coaching.