Use And Occupancy - U&O

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DEFINITION of 'Use And Occupancy - U&O'

Refers to a type of permit required by some local governments whenever real property is transferred. Usually U&O regulations require the property seller to pay a fee of around $100 and allow a government official to inspect the property. The inspection's purpose is to ensure that the property complies with local housing codes and ordinances and that all the necessary permits have been filed. It is also referred to as a "resale inspection," an "occupancy permit," and a "U&O certificate."

INVESTOPEDIA EXPLAINS 'Use And Occupancy - U&O'

The U&O inspection must be completed within a limited timeframe, such as 30 days prior to closing, and a U&O certificate may only be valid for a limited time, such as 90 days.


In localities with no U&O requirement, buyers and sellers can make their own determinations about the condition in which they are willing to buy and sell the property and the transaction can proceed more quickly and smoothly. The buyer may purchase a private home inspection and may ask the seller to make repairs as a condition of closing the deal. The seller is free to agree to make the repairs, to negotiate for the buyer to perform a portion of the repairs, or to walk away from the transaction. When local government is involved, the seller is forced to spend time and money to fix anything the government deems necessary, without regard to the prospective buyer's requirements.

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