Definition: A certificate of compliance is a written document that states the fulfillment of a given requirement. It is a formal certification that declares that an individual or company met a set of conditions.
What Does Certificate of Compliance Mean?
Certificates of compliance are issued for many purposes and they are normally drafted and signed by official institutions depending on the subject being covered. The main reason for these certificates to be solicited is to comply with a legal requirement to obtain permission to carry an activity or to close a business transaction. They are very common in the real estate business and in public utility services.
When a realtor is leading a client to close the sale of a property the federal or state government might demand several certificates of compliance to guarantee the fitness and safety of the property. Also, they might be issued as a credibility instrument. For example, a student pursuing a college application approval might include a certificate of this kind from courses he has done in the past to make its proposal more appealing to the judges.
Example
Mr. Scholes wants to build a second floor for his home. He drew a sketch of what he wanted and contacted a friend of him who’s an architect to help him with this project. His friend drafted a professional blueprint that would be filed with the municipal real estate authority in order to get the required permission to build the additional floor.
After the Property Department reviewed his application they replied that he needed to get a Certificate of Compliance issued by the Safety Department. This department is in charge of inspecting the structural conditions of real estate and properties to guarantee they are safe enough to sustain any modifications being proposed. After the department reviewed the structure they concluded that the house met the conditions for a second floor to be built.
They granted Mr. Scholes with the Certificate of Compliance and he was able to start the project.
