When it comes to purchasing a commercial property and the ever-changing zoning laws of municipalities, obtaining a zoning report is a best practice. Lenders typically require it, but ordering one will give you peace of mind that your intended use will be compliant.
You should be well-versed in everything you need to know to finish this before the due diligence period expires. So, without further ado, here are some important points to consider when requesting the report.
WHY are reports on commercial zoning important?
A standard zoning report is more than just an extra step in the process; it protects the buyer and lender by lowering risk and ensuring profitability. Processing must be completed during due diligence to secure financing for build-to-suit development.
Another reason the details are critical is that zoning changes could occur and reduce property value, resulting in a later costly problem. The practical reason for not skipping this step is to understand what can and cannot be included on that potential property because it affects your goals. Zoning compliance is now an essential part of the closing checklist.
WHO is responsible for reporting?
The person who must verify the development’s legal, physical, economic, and market assumptions is the “who” in a commercial zoning document. You will be informed of any pending violations, variances, special permits, conditions, or exceptions when the report is complete so you can decide how to move forward.
Typically, the preparer will require:
- Property address or coordinates
- Parcel identification number
- Current application
- Previous survey
- Memorandum of offer
- Time to completion
WHAT IS CONTAINED IN AN USUAL ZONING REPORT?
A zoning report is used to report the current zoning district; highlight permitted uses, restrictions, potential liens and encroachments, and the area-specific requirements you should be aware of before breaking ground.
The following items are possible:
- Particular zoning designation
- Notification of any unresolved code violations (zoning, building, fire, etc.)
- A copy of the occupancy certificate
- A zoning map copy
- A copy of the site plans that have been approved (if available)
- Zoning designations for adjacent properties
- Notification of any relevant variances/special permits/exceptions/conditions
- Status of conformity
- Sections of the municipal zoning code governing permitted uses, height requirements, setbacks, minimum parking, and the right to rebuild (in the event of damage)
Exactly WHERE can I get a zoning variance?
Didn’t get the zoning type you wanted?
A rezoning request or variance may be required to combat regulatory challenges. In today’s development world, the most common way to submit a zoning variance request is through the website of the municipality in which the property is located.
Attending a public zoning hearing is another way to argue for the best use of the property and that your intended use will not negatively impact the community. A Conditional Use Permit (CUP) allows your property to violate current zoning laws if it benefits the community. Requests for land use and property setback can also be made if necessary.
Don’t undervalue the importance of a thorough zoning report for your protection during the due diligence phase of your next project. If you don’t already have a developer handling this part, remember that regulations vary from municipality to municipality and change over time. If this is true for your website, look into the zoning ordinance interpretations that apply to it.
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