There are many different factors to consider before making a commercial real estate purchase, but zoning laws are one of the most important.
Land use and zoning regulations vary from county-to-county (and even from city-to-city), and can prevent owners from using their properties for their desired purposes.
While it's possible to buy a property and have it re-zoned, this is often a long and arduous process, so buyers should carefully consider how the property will be used before making an offer.
Land Use Regulations to Consider Before a Real Estate Purchase
Zoning is just one of many land use regulations issued by a local government. Essentially, a municipality establishes how certain parcels of land may be used, designating each zone as industrial, commercial, agricultural, or residential.
Zoning laws may be issued for:
- Public safety reasons, such as keeping residential areas away from industrial pollutants.
- Comfort, ensuring that apartment dwellers aren’t bothered by the noises or smells of a nearby agricultural property.
Buyers need to determine whether a structure or land meets the needs of the business as well as the local land use laws. In particular, commercial buyers should examine:
- Commercial zoning requirements. Even if the property is zoned for your intended use, there may be many additional restrictions that lead to costly modifications. Zoning laws may dictate the type of buildings allowed on the land; restrictions on warehouses or accessory buildings; boundary lines and building position; placement of utility lines building height; number of rooms; frontage minimums; and off-street parking requirements.
- Residential zoning concerns. Regulations may be placed on the type of residences erected on a property, such as single-family homes, condominiums, or townhouses. Zoning laws can also designate the maximum number of units in one area, as well as the maximum height of residential structures. If a residential area is designated a historical neighborhood, there may be additional zoning regulations regarding the preservation, modification, and appearance of the structure.
- Restrictive covenants. In addition to governmental land use laws, developers may place restrictions on a property to prohibit certain uses. Restrictive covenants prevent property owners from building additions, installing swimming pools, or changing the appearance of the house in a way that's not in keeping with the aesthetic quality of the neighborhood.
- Easements. Land developers may designate a portion of the property for public use or prevent building on a certain parcel of land. Easements can be used to build a park on a property, protect endangered wildlife, or otherwise provide a benefit to someone other than the owner.
- Environmental concerns. Commercial property owners have to adhere to any environmental regulations regarding air quality and emissions, water quality, endangered species protection, wetlands and habitat conservation, and site cleanup. This may require inspections, permits, and hearings with federal, state and local agencies.
- Variances. If an owner wishes to use one parcel of land within a designated zone for another purpose, the owner may be able to apply for a variance. In most cases, a variance allows the property owner to satisfy a need for the benefit of the public interests, such as allowing a community-supported agriculture organization to grow food for the community on blighted residential land.
A Partner to Help Navigate the Process
Commercial buyers need to weigh the costs of building modifications against the potential costs of rezoning. If the owner has a compelling case for rezoning, he may petition the board to permanently change the allowed use of the property. This typically involves paying petition fees; specifying how the property will be used; and addressing how re-zoning affects the long-term goals of the municipality. In some cases, approval may only be granted after many public hearings and court appearances.
Our commercial real estate attorneys can help you navigate the buying and development process, giving you maximum control over your investment. Simply fill out the quick contact form on this page to set up a consultation and get your questions answered.