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Are We in the Zone? What You Need to Know about Zoning for Commercial Real Estate Deals

Zoning is a major factor in any real estate transaction. It determines how a parcel of land can or can’t be used and allows communities to control property values and ensure safe land use. Zoning rules and regulations are divided into two categories, these being land use requirements and ordinance-based requirements. The intricacies of zoning regulations require meticulous due diligence to ensure compliance.

Land-use zoning regulations include categories such as commercial, residential, industrial, and agricultural. Ordinance-based requirements are concerned with physical aspects of a parcel like building type and size, parking restrictions, renovations allowed, and setback requirements. Together, these categories create guidelines for how a building or parcel can be used or changed, including improvements. These regulations extend to situations in which an asset is harmed and must be reconstructed back to its existing use. If a community’s zoning regulations for a property do not allow for such construction, it is possible that the asset may not be able to be restored without the zoning is changed. Changing a property’s zoning is not an easy feat, and the outcome still may not allow for the changes a property owner wishes to make. The potential difficulties of zoning support the need for a Zoning report.

Zoning reports are often standard aspects of a buyer’s pre-purchase review and financing. While numerous types and levels of zoning reports are available, all present buyers with a range of information including local zoning requirements, zoning records, land surveys, building codes, and infrastructure requirements to help inform their purchasing decision. Through consideration of the information presented in a zoning report, buyers are able to determine if their property of interest will need updates in order to meet local zoning and infrastructure regulations and if their planned property use will be in violation of current codes.

Compilation of a zoning report and analysis of findings can be assisted by a qualified professional. In addition to consulting a zoning report, contacting the local public works department will also reveal planned easement or roadway projects that may affect the target property. Taking time to conduct research prior to real estate transaction completion will save buyers both time and money in the future and keep a small issue from exacerbating into a headache.

Read more about Zoning on Partner’s website.