How zoning may affect your property

Zoning is a system of land use regulation in various municipalities which in practice designates permitted and "extent of uses" of land based on mapped zones which separate one set of land use from another.

Zoning regulates building height (how many levels one can built), plot coverage and ratio, similar characteristics or some combination of these.

Local Governments use zoning as a permitting system to prevent new developments from harming existing residents or businesses and to preserve the quality of a community. Zoning laws affect the value of your real estate property. There are three main zoning classifications:

Residential: This applies to residences and multi-family dwellings.

Commercial: This usually applies to office blocks and businesses.

Industrial: This normally applies to manufacturing shops and plants.

Zoning laws vary from town to town so make sure you know the zoning restrictions on any real estate before you invest. The purpose of zoning laws is to specify what types of dwellings or businesses may reside in a certain area. Zoning laws may change and a real estate investment that is zoned ‘commercial’ or ‘residential’ today may be rezoned for another use in the future.

If you invest in real estate for rental purposes, your tenants may cause zoning problems if they change the use of the rented facility. Tenants who convert their homes may unknowingly violate zoning laws, so it is very important to have a clause in your lease agreement stating what can and cannot be done on your rental premises.

Ordinances

Another way that zoning laws may affect your real estate investment is when zoning is changed from one class to another. If the zoning is changed from residential to another class such as commercial, this can mean a higher property value, which means more value for your investment.

Before buying a property, it is important to talk to an expert at Housing Finance who will explain to you how municipal laws will affect your property. The experts will let you know, for example, if in five years your beautiful views will be replaced by a highway or a high rise development. Zoning regulations will indicate what may be legally constructed in the surrounding area.

A variety of ordinances will also affect the placement of your new home on the lot. Regulations will specify how close you can build to the property line, roads, rivers and lakes. Easements for electrical and telephone poles will limit the space you have for building your home. Unless the property is in a development of suburban tract homes, there may not be easy access to electricity or public water lines.

If there are no municipal sewers, you will need to know where you may legally place your septic system.

Zoning may include regulation of the kind of activities which will be acceptable on particular plot such as open space, residential, agricultural, commercial or industrial; the densities at which those activities can be performed from low-density housing to high-density buildings; the height of buildings, the amount of space structures may occupy, etc.

Lease agreement

It is very important for an investor to know the zoning requirements of any property before they invest. Find out from a Housing Finance expert what these laws and requirements are and any proposed changes as this can save you a lot of money and aggravation through costly and time consuming mistakes.

In addition, ensure that your lease agreement states what activities are allowed or not allowed on the rental premises. Find out what the other properties in the same area are zoned.