Investigate Zoning Laws Before Committing to a Location

Posted on Wednesday, July 11, 2018

Location, location, location. You know how important it is for your business.

As a result, when choosing a location, you probably research foot traffic, car traffic and the occupancy rates of the neighboring buildings. But if you don't research zoning laws, all your good business judgment could go to waste.

Don't rely on a previous use for the property in determining whether you can use a location for your business. Previous owners may have obtained a variance from the designated use to operate their businesses. That variance won't apply to you and you might not be able to get another one.

Before you sign a lease or buy a commercial property, make sure you can legally run your business from the location. Otherwise, make sure your lease or contract has a contingency clause stating that the lease won't be binding or the sale final if you don't get zoning approval.

Zoning laws, often called ordinances or land use regulations, state how you can use the land you own or rent. While the laws vary from place to place, the most frequently used classifications are commercial, industrial, residential, and agricultural. 

These groups may be used in various combinations. If a zone is strictly residential, you can't operate a business there at all. If the land is in a commercial, industrial, or agricultural zone, or a combination (called mixed-use), then the zoning laws specify the kind of business you can operate in a particular area.

For example, if a district is designated for mixed-use residential and commercial, the commercial uses could be limited to businesses that wouldn't interfere with enjoyment of residential property. Factories, warehouses and other heavy industries might be required to be located away from residential areas.

Within each of the general categories are more narrowly defined divisions. For example, a residential zone might be segregated into separate zones for single-family homes on one acre, single family homes on half acre lots, hotels, boarding houses, mobile homes, low-rise apartment complexes, high-rise apartment complexes, and institutional housing.

An industrial zone may be zoned heavy, light, or research. A commercial zone can be divided into small stores, shopping centers, gas stations, restaurants, drive-in facilities, adult-entertainment districts, and warehouses.

Even if your use matches the zoning designation for the area, you still need to learn about local zoning laws. Usually, local governments will have specific requirements about parking and business signs, in addition to rules about the kinds of businesses you can have in a particular location.

If your venture will bring an increase in car traffic to the neighborhood, the local government may want to see a plan for dealing with the new parking needs in the area. If the neighborhood is trying to preserve a certain kind of look, you might be restricted from putting up large neon signs.

At a minimum, visit your local zoning office, city hall, or other local planning board and pick up a copy of the relevant laws. Zoning ordinances and zoning maps are public records. In some localities, if you have a legal description of the property (name, address, tax map and parcel number), you can phone the appropriate zoning department or city hall or e-mail a request for information. And many communities have zoning maps and ordinances online and in local libraries.

Posted in Tax And Accounting Topics For Business

Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.

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