The building code sorts the ways that buildings are used into separate "occupancy classifications". Every building is given an occupancy classification when it is built, and each occupancy classification has different building code requirements that go along with it. The requirements reflect the type of hazard or uses in the building. For example, the requirements for a building to be used as a day care center will be different (and stricter) than the building code requirements for a new warehouse building. A building will remain "grandfathered" even when the code requirements for any occupancy classification change over time, so long as the occupancy remains the same.
A change of occupancy is when there is a change in the building's use that would change the way the building code classifies the building's occupancy. Some occupancy changes, such as a house to office us, may be obvious. A less obvious example of a change of occupancy is when a restaurant that has seating for less than 50 wants to increase the number of seats. A change of occupancy typically requires that the building meet most of the current building code requirements for a new building.