Purchasing real estate for your business is an exciting process. It is also a way to increase the value of your business. However, before signing on the dotted line or as part of your due diligence, make sure that the property you are buying or leasing allows for the use you are intending. Also, check for things such as sufficient parking for the intended use, and that there won’t be expensive impact fees charged in a change of use situation, height limitations, etc. All of these related property issues fall under the umbrella of Land Use & Zoning law.
Land use and zoning is a system used by local government to classify types of real estate according to their “land use.” For example, you don’t typically see a 20-story office building in the middle of a single-story residential neighborhood or an industrial warehouse in the middle of a low-intensity office neighborhood. In other words, land is classified based on its use. Zoning, on the other hand, is basically the set of rules that goes along with the land use designation. For example, how much parking will be required, how much green space is needed, minimum setbacks, etc.
So, what types of zoning problems do business owners typically face? Let’s discuss.
1. Purchasing/Leasing the Wrong piece of land
The worst-case scenario buyers and tenants typically find themselves in has to do with the proposed use not being a permitted use for the land or building. A typical example is leasing or buying property to open up a medical clinic, which is a high intense use and only permitted in certain zoning districts. Or wanting to open a restaurant, another high impact use, which may require additional parking that the property may not have. How about opening up that great new, hip Pub you’ve always dreamt about? Well, make sure that not only the use is permitted, but that there is no stringent noise ordinance in place that may limit the entertainment you had in mind.
2. Mixed-Use Zoning Issues
Sometimes land is zoned for multiple purposes/uses. When this is the case, you may run into issues with other residents after you’ve already set up shop. For instance, your customers could be taking up residential parking spaces or residents might complain about your business’ signs messing up the look of their neighborhood. On the flip side, a high intensive use like a restaurant or nail salon may move in and gobble up all the extra parking spaces that your clients typically used. Issues like these may have a negative impact on your business in the long run and you may not be able to get out of your lease or sell your space.
3. “Setback” Issues
When you hear the term “setback” in relation to a property, it means the minimum distance that a structure can be located or built along the property line. All properties have front, rear and side setbacks set by the corresponding municipality or county. A typical issue that pops up when purchasing property is that an existing structure does not meet setbacks or the required setbacks that will be imposed for a new structure will limit the amount of construction making the property less valuable.
Before you enter into any contract for opening a new business or moving your existing one, it’s essential that you work with a real estate professional and confirm that the property can be used in the way you want and that there aren’t any surprises that may bring costly consequences.
Contact Ser & Associates today!
At Ser & Associates, we regularly help our clients with all aspects of their real estate transactions, including land use, zoning and code compliance issues. If you are in the process of buying or leasing real estate and need assistance in evaluating the property or obtaining special approvals, please don’t hesitate to contact us today at (305)222-7282.