Did you check the zoning? Questions you should never ask post-closing

Real Estate | 29 Nov |

I took a call from a property owner furious about a city violation notice. For three years they have operated a contractor’s supply and inventory yard without a complaint until receiving a recent violation notice for operating an industrial use in a prohibited zoning district.

Another property owner purchased an existing office building only to find out later that medical office uses are not allowed, nixing the new tenant deal he had negotiated.

A third developer closed escrow on a property zoned for the intended use, but discovered during the site plan review that the prior stipulations of approval prohibited the plans as designed, effectively killing the project.

Adam Baugh is an owner at Withey Morris, PLC.

These situations are not unique; we routinely get calls from panicked owners, developers, engineers, and architects pleading for a quick solution. Indeed, a good zoning attorney should have a variety of tools in its bag of tricks to remedy the situation. But not all things are quickly resolvable, and are often more costly at that point.

Rather than being reactive, wise brokers and smart developers know to bring on land use and zoning counsel early in the process to identify potential issues during the preliminary due diligence period. Land use items we regularly research in the preliminary stages of site acquisition include:

• What is the current zoning and general plan designation?

• Does the zoning allow the intended use?

• Are there any applicable Area Plans, Specific Plans, Overlays, or other regulatory documents?

• What is the prior zoning history? Prior case history? Variances? Use Permits?

• Any relevant spacing requirements for specific uses?

• Development agreements? Repayment agreements?

• What are the attendant stipulations of approval? Is there a vesting or commence construction deadline?

• Have any approvals expired (zoning, site plans, plats, etc.)?

• What additional processes are required?

• Was there any prior neighborhood opposition? Who are the key community activists/leaders?

• Any political sensitivities of the local elected officials to consider?

• Is there any violation or code enforcement history?

• Impact fees? Buy-ins? Off-site improvements? Improvement Districts? Incentives? Utilities?

• Parking ratios? Tenant matrix and parking requirements?

• Non-conforming site conditions or uses?

• Current occupancy status?  Change of occupancy requirements? What scope triggers new improvements? 

• Any additional municipal or state licensing requirements?

• Deed restrictions and CC&RS? Easements? Title review?

This list is not intended to be exhaustive of all scenarios. It is just a sample of the common issues that proper due diligence can examine at the outset to prevent headaches later. Whether vacant land or improved structures, all situations should be properly vetted to make sure your investment is sound, your intended use is allowed, and your expected exit plan is feasible.

 

Adam Baugh is an owner at Withey Morris, PLC where he has been practicing land use and zoning law since 2007. He is a seasoned and successful lawyer who regularly works with city councils, planning commissions, and neighborhood groups in representing landowners, developers and businesses in obtaining land use entitlements.

  

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