Risky Business | 3 Options To Make A Property Use Legal

Risky Business | 3 Options To Make A Property Use Legal

Casey Rose
Casey Rose, CCIM
You’ve found an ideal property – the right location, the perfect building, and even a warehouse for storage, all within your budget. But there’s a snag: your broker informs you that your business isn’t permitted under the current zoning. In a less competitive market, you’d simply look for another property. However, in a tight market, it’s worth exploring your options.

Here are some avenues to consider:

1. Grandfathered Use 
Is the property or your business use “grandfathered”? In some cases, communities update zoning regulations and allow businesses that were previously legal to continue operating. This is known as a “lawful prior non-conforming use.” The property owner can keep running their business, and this status often transfers with the land, allowing a new owner to continue the lawful prior non-conforming use.

However, there are limitations. Generally, you can’t make significant upgrades or renovations, expand the facility, or rebuild it. For instance, if you purchase a warehouse in a residential zone as a lawful prior non-conforming use and want to add a roll-up door, that’s not allowed. If the building is destroyed, you can’t replace it with a new warehouse. The ability to operate under this status ends when the building becomes obsolete.

Also, think about the property’s resale value. When you sell, it’s likely to be based on the land’s value according to the current zoning. For example, if you buy a lawful prior non-conforming use warehouse for $450,000, but similar warehouses in the area are selling for $600,000, it might seem like a good deal. But when you sell, the value will probably be much lower.

It’s crucial to confirm that it’s a lawful prior non-conforming use, not just a non-conforming use that has gone uncontested. Your town’s planning department can assist with this.

2. Is a Variance a Possibility?
Getting a variance is unlikely. Most municipalities only grant variances for issues like setbacks, not typically for non-conforming uses.


3. Rezoning as an Option 
Rezoning is another route you can explore, but it’s not a quick or easy process. It can take months to years and often involves substantial effort and legal expenses.

However, some situations may make rezoning worthwhile. Many communities have Community Vision plans that outline future land use. If your business aligns with that vision, the rezoning process may be smoother, with planning staff likely to support your project.

You might also have a property that’s close to the required zoning. If an adjacent property has the zoning you need, it’s usually easier to gain support. For instance, if you’re considering a property zoned commercial adjacent to light manufacturing, rezoning may be more achievable. On the other hand, trying to change a warehouse from low-density residential zoning to industrial in the middle of a suburban neighborhood is less likely to succeed.

The risk with rezoning is that the decision lies with elected officials who aren’t obligated to follow future community plans. Even with community and planning support, elected officials may still vote against your proposal.

In Conclusion
Purchasing a property with nonconforming use involves risks. You might get lucky and be grandfathered in, but be prepared for potential loss of value if the building deteriorates faster than expected. The long-term solution is usually rezoning, which can be complex and time-consuming, even under the best circumstances.

Typically, the best option is to continue your search. However, if the property truly is a “perfect fit,” with some luck, you might make it work.

*In this situation, it’s advisable for you and your broker to meet with your local planning staff promptly. Zoning regulations can be complex and vary by community, and planning staff are experts who can help you navigate and interpret the regulations.