Certificate of Operation

My husband and I are going to try and rent his parents' former home in Indiana. I was reading different things about renting out property and came across something about certificate of operation. I can't tell if this is something required in my state. Can anyone explain to me in simple terms what the C of O really is and do I need one in my state? Thanks for any comments.

OP here - I forgot another question about insurance. Does a single-family home used as a rental need a different type of insurance policy than if we were occupying the home ourselves? I didn't know if we could continue the same policy that has been on the house or if the insurance company would honor any claims if they were told damages were done by renters. Thanks.

[OHlandlord]

The C of O, also called a Certificate of Occupancy, is a simple certificate that is granted to you from the city. It means that your unit has been inspected and has passed inspection. This forms says the property has no building code violations, or any health or safety violations, and is fit for occupancy as a residence. Call your local building inspector or building code department and they can tell you if it is required, and who to call to schedule the appointment. A C of O is not required in all areas. But some areas require this be done before you are permitted to rent a property. Please call and check if it is required. You may also want to ask if you need to register the rental property while you have them on the phone.

Before you do call, you may want to review local building codes (most are available on-line) and see if your building would pass. There may be a fee for a re-inspection and you probably want to avoid this. Check for smoke detectors, CO detectors, GFCIs, peeling paint, and other obvious violations. Certain sections of the country also require a lead paint test prior to renting. The same department can tell you if this is required. If it is, you may want to get one of those cheap kits from Lowes or HD and test yourself first. Repaint any areas where it tests positive to encapsulate the lead paint under new paint. If the paint is peeling or oxidizing, it will be expensive to remediate. You will be unable to do this yourself.

You also will need to get a copy of the panphlet Protect Your Family From Lead In Your Home (you will need to give this to a tenant). Often these are available free in the paint aisles of the same stores. You would need to get a lead disclosure statement and have it signed with any lease you sign (available on-line, just google it).

You will need to change the insurance from a home owner's policy to a rental investment property policy. Call your local agent about this. My rental policies are actually cheaper than my home owner's insurance, but that doesn't hold true everywhere in the country. You may want to get a rider to cover lost rent if something were to happen to the house with the policy.

Thanks for the feedback. Seems like a good idea to keep the house and earn rent income from it, but we suspected pitfalls and things you just wouldn't know until trying too. Thanks again.