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."

BREAKING DOWN '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.

RELATED TERMS
  1. Conditional Offer

    In general, an agreement between a buyer and a seller that an ...
  2. Use and Occupancy Insurance – U&O

    A type of insurance that covers against the loss of use of machinery ...
  3. Settlement Agent

    1. The party involved in completing a transaction between a buyer ...
  4. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
  5. List Price

    1. The manufacturer's suggested retail price, determined by supply ...
  6. Reverse Exchange

    A type of property exchange wherein the replacement property ...
Related Articles
  1. Investing

    Are Home Inspections Worth It? - Price vs. Value

    If you’re wondering whether home inspection is worth the investment, the following information will help you decide.
  2. Investing

    12 Steps To Closing A Real Estate Deal

    Before that new house officially becomes yours, there’s a long list of things you’ll need to accomplish during the closing process.
  3. Investing

    Home Improvements That Require Permits

    Many home remodeling projects require permits, which the homeowner is responsible for. Here is a list of projects that may require permits.
  4. Investing

    10 Tips for Getting a Fair Price on a Home

    When the housing market booms, it's tougher than ever to get a good price. Make sure the house you choose is worth the price you pay.
  5. Investing

    The Guide to Investing in REO Properties

    Real estate owned properties present a unique investment opportunity but there are some specific challenges to be aware of before diving in.
  6. Investing

    Costs New Investors in Real Estate Do Not Consider

    As lucrative as real estate investment can be, there are a multitude of costs that new real estate investors must consider.
  7. Investing

    Foreclose on High Housing Prices

    Foreclosed homes may be financially appealing, but there are many obstacles to consider before buying.
  8. Insurance

    10 Hurdles To Closing On A New Home

    It's the biggest purchase of your life - find out what can go wrong before you even close the deal.
  9. Investing

    The FHA's Minimum Property Standards

    If you're thinking about purchasing a home with an FHA loan, here are some standards that must be met for the deal to go through.
  10. Investing

    Investing in Property Out of State

    If you can't afford property close to home, consider taking the real estate plunge elsewhere in the country.
RELATED FAQS
  1. What Home-Buying Costs Can I Deduct from Taxes?

    Except for interest, points, real estate taxes and PMI, costs to acquire a home increase the asset’s tax basis and are not ... Read Answer >>
  2. What do states do with unclaimed property?

    Understand what unclaimed property is and what types of property can be considered abandoned or unclaimed. Learn what states ... Read Answer >>
Hot Definitions
  1. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  4. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  5. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  6. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
Trading Center