Zoning Contingency: Fulfilling Your Home’s Purpose

A zoning contingency can be a massive friend-in-need for buyers if the listed properties violate the applicable zonal regulations. One crucial aspect that many homebuyers overlook is the property's zoning status. A zoning provision in your contract ensures that the property you're looking at can serve your intended purpose.

Imagine you find your dream home with a backyard large enough to start that organic garden you've always dreamt of. However, you find that the zoning regulations applicable to your property only allow you to use it commercially. Bummer, right? That's where a zoning contingency comes into play.

A zoning clause is a kind of real estate contingency that allows a buyer to back out of a property deal if the zoning doesn't match their intended use. Moreover, this contingency would require a satisfactory review of the property's zoning status before the transaction can proceed.

Furthermore, it allows the homebuyer to confirm that the property serves its intended use before closing the sale. Today, we'll explore the concept of zoning contingency by understanding its types and evaluating why it’s critical to buyers. Let’s roll!

Key Takeaways

Zoning Contingency Applicable To Different Zoning Types

You might only think of ‘residential’ or ‘commercial’ zoning types when you hear about zoning. However, there’s more than that. Let’s check these types of zoning!

• Residential: Split into single-family, multi-family, and sometimes even the type of dwelling (like townhouses or condos).
• Commercial: Covers a spectrum of properties, from office buildings to malls.
• Industrial: Includes factories and warehouses.
• Agricultural: Reserved for farming and livestock.
• Recreational: Parks, sports complexes, and other leisure areas.

Each zone has specific regulations—like the height of a building, how close you can build it to the street, etc.

Why is a Zoning Contingency Necessary?

A zoning provision is crucial because it can help prevent surprises down the road. Moreover, zoning regulations depend on the geographical location of your home, and the complexity of these regulations can differ accordingly.

Furthermore, by including a zoning contingency, the homebuyer can ensure that the property serves its intended use. It also ensures buyers avoid issues with the local government or zoning board.

Suppose you want to purchase a property to invest in a duplex. Without a zoning clause, you might assume the property is zoned for multiple-family dwellings. However, you find out later that the zoning regulations only allow for single-family home use. This could significantly impact your investment strategy.

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Therefore, if you're buying a property with specific intentions (like building an extra unit), you must ensure zoning compliance. Also, a property’s resale value strongly depends on the zone where it lies and the applicable regulations. It’s equally vital to know that operating against a zone's rules can lead to fines or legal action.

How Does a Zoning Contingency Work?

A zoning contingency in a real estate purchase agreement typically gives the homebuyer time to review the property's zoning status. During this time, the homebuyer can work with a real estate attorney or a zoning specialist to ensure zonal compliance.

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Moreover, if the homebuyer is content with the zoning status, the transaction can proceed as planned. However, they can terminate the agreement without penalty if the property’s intended use violates the zonal requirements.

A zoning contingency works by helping uncover different issues, which are as follows:

• Zoning Violations

Property owners sometimes change their property, which violates local zoning regulations. For instance, the owners may have a tall building near the property line. A zoning contingency can help ensure compliance with localized zoning regulations.

• Non-Conforming Use

A property located in a zone that permits residential use would violate the zonal rules if used for commercial purposes. This implies non-conforming property usage. A zoning contingency ensures that the property's current use is legal and buyers can continue using the property similarly.

• Setbacks and Easements

Setbacks refer to the minimum distance from a structure from the property line. An easement is a right a third party holds to a part of the property for a specified purpose. A zoning contingency can help ensure the property has the necessary setbacks and easements.

How to Check a Property's Zoning?

Buyers can check the zoning status of their properties using the following sources:

1. Online Portals

Many local governments have online databases with zoning info. You can check these databases to check a property’s zoning.

2. Local Zoning Offices

Pop in and chat with the local zoning office staff. They can offer detailed maps and specifics related to the property’s zoning.

3. Real Estate Agents

Real estate experts who are familiar with the local zoning laws can provide sound advice and guidance on a property’s zoning. This will help you place a suitable zoning contingency clause in your contract.

In some cases, the zoning status of your property may not align with your intended plans. Here’s what you can do:

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• Look for Properties with a "Grandfather Clause"

Some properties operate under old zoning rules because they existed before the current regulations. See the FAQs section below to know more about the Grandfather Clause.

• Adjust Your Plans

If you love a property, consider tweaking your plans to fit the zone.

• Seek a Zoning Change

It's a lengthy process and not guaranteed, but you can petition for a change.

FAQs

1. Should I be heavily concerned about zoning?

Zoning determines the allowed uses of a property—whether you can have a home business, an additional unit, or other specifics. Ensuring the property aligns with your plans prevents legal troubles and potential heartache.

2. Can zoning ever change?

Cities and counties might change zoning for various reasons, such as urban development or community needs. However, changing the zoning of a specific property you own can be challenging and isn't guaranteed.

3. What’s a "Grandfather Clause"?

It's a provision that allows existing properties to continue their current use even if new zoning regulations wouldn't permit it. Suppose a property had a particular use before the implementation of a new zoning rule. This clause can provide that property an exception from the new zoning requirement.

4. What if I buy a property and then the zoning changes?

You can continue if you're using the property in a way allowed when you purchased it. However, if you make significant changes or renovations, you might have to comply with the new zoning.

5. In addition to zoning contingency, what are the other crucial real estate contingency types I should know about?

There are several, like inspection, loan, and appraisal contingencies, that you can include in your contract during the home purchase negotiations.

6. Do I need a lawyer to place a zoning contingency in my contract?

While only sometimes required, having a real estate attorney can offer peace of mind, especially in complex transactions or clarification on zoning and other regulations.

In Closing

A zoning contingency is essential for homebuyers to protect themselves during a real estate transaction. While it may add some extra time and cost to the transaction, the peace of mind that a zoning contingency can provide is invaluable. It can be cost-effective and legally safe down the road.

Zoning might seem daunting, but with knowledge in your arsenal, you'll navigate it like a pro. The zoning contingency is more than just a clause—it's your ticket to a hassle-free future in your new home. Best of luck!