Zoning Analysis and Commercial Real Estate Transactions
Zoning analysis is an integral part of commercial real estate transactions. The zoning of a property determines:
a) What type of structures may be built on the land
b) Reconstruction and remodeling restrictions
c) Land use and property use
d) Compliance status of parking spaces
e) Compliance status of the property's existing use
It is important to know that local and county jurisdictions may change or amend their zoning ordinances often which may trigger a compliant property to become non-compliant if the sale takes place after updated zoning rules. Moreover, a property may have multiple zoning districts governing it and each may have separate zoning and land use rules.
An example of zoning importance would include a future owner who may wish to demolish the existing structure and build a hospital or other structure. Zoning due diligence provides the owner specific details as to what may be built on his or her property. The zoning information will identify if the planned construction is allowed plus provides height, size, location rules, parking rules, and other restrictions which will apply when developing.
Zoning analysis for commercial properties is done by zoning firms like the Planning and Zoning Resource Corporation. PZR®
will make sure the property is compliant from a zoning and land use perspective. Zoning analysis becomes even more arduous for multi-site and multi-location real estate transactions. A complete and expert zoning analysis and zoning due diligence is required supported by municipal documentation.
In most cases buyers, lenders or insurance companies do not have the expertise or resources to conduct an in-house zoning analysis and zoning due diligence. They hire PZR®
for zoning analysis, zoning reports, zoning letters, zoning investigation, advice and service needs. After completing current research on a property, PZR®
inputs the data into a PZR®
Zoning Report and includes all relevant municipal documentation. In many cases, zoning analysis is not limited to municipal document review and research, but it is backed by meetings with municipal/state/local officials.
PZR® Zoning report is extensive and includes:
- The specific zoning designation of the site, as established by the current municipal code.
- The uses allowed under the zoning designation established by the zoning ordinance and whether the present use of the subject site is legally permitted.
- The minimum yard or setback requirements and a review of the survey for compliance.
- The building height requirement, whether by number of stories or actual height above ground level, and a review of the survey for compliance.
- The bulk or density restrictions of the property, and a determination of compliance.
- The formula for determining the minimum parking requirements, and a comparison of the required parking count to the actual site count.
- Special circumstances to be considered could include legal non-compliance of any of the above factors, the issuance of zoning compliance letters from the municipalities, the existence of variances, council minutes, certificate of occupancy, building inspections and the effect of site plan approval.
The Planning and Zoning Resource Corporation (PZR®) provides zoning analysis, due diligence and provides several services as well.
- Zoning Verification Letters
- Building and Zoning Code Violation Letters
- Certificates of Occupancy
- Building Permits
- Variances, Special Use Permits or Conditional Use Permits
- Planned Unit Developments
- Site Plans
- Zoning Codes
- ALTA Land Title Survey Coordination through SRN