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Zoning Due Diligence for Commercial Real Estate Transactions
- 14. Legal Nonconforming Buffer Yards - This Florida café has enjoyed patio seating for years, but current Code now requires a buffer between the property line and any improvements. In the event of destruction, the restaurant will have to provide a 30 foot buffer, resulting in lost seating area.
- 15. Legal Nonconforming Setbacks and Parking – This AZ Hospital was built in the County and later annexed in the City. Differences in Code requirements between the two jurisdictions caused setback and parking deficiencies.
- 16. Legal Nonconforming to Height - This Multi-Family Complex was built prior to changes in the Zoning Code, which lowered the allowable building height from 3 Stories to 2 Stories.
- 19. Resort Hotel in Michigan – Nonconforming to Parking Approved w/parking to be constructed on adjoining lot also owned by the Owner, spaces never built, City never noticed, C.O. issued, Owner sold the land.
- 20. Assisted Living Center in AZ Nonconforming to Density– Approved for 85 Beds, C.O.’d for 85 Beds, now has 95 Beds by converting other space which was never applied for or approved
- 21. Multi-Family Site in GA – Nonconforming to Density and Open Space Approved and developed on 30 Acres, owner sold 10 acres of unimproved land which caused density, open space and landscaping problems not easily cured
- 71. ANY QUESTIONS?
Hinweis der Redaktion
- Examples #1
- Examples #2, #3, #5, #6, #7
- The City is attempting to beautify its shoreline and has adopted new buffer requirements. In the event of destruction, the restaurant will have to provide a 30 foot buffer, eliminating all outdoor seating.
- This hospital was constructed under the counties jurisdiction. Since construction, it has been incorporated into the City. This has created numerous nonconformities including setbacks and parking.
- Apartments were built according to code. Since construction, the code has changed. Apartments in this zoning district are now allowed a maximum of 2 stories. All of the apartment buildings on this property are 3 story. Also, projects in this zoning district must now be constructed 30 feet from the front property line. Eight of the buildings on this property are constructed 7 feet from the front property line. In the event of destruction, 8 of the buildings cannot be reconstructed and the remainder must be 2 story rather than 3, resulting in substantial loss of revenue.
- Examples #4 #8
- This hotel was constructed in 1988 according to the specifications of an approved Site Plan EXCEPT, conformity to the required number of parking spaces per the Site Plan was contingent upon the construction of 43 parking spaces on an adjacent property owned by the hotel owner at the time of construction. When PZR performed zoning analysis as part of the lenders due diligence, it was discovered the parking spaces were never constructed and the land for the proposed parking spaces is now under different ownership . This resulted in a parking deficiency of 43 spaces. Because the parking lot was not constructed as proposed, the hotel does not enjoy a legal status. In the event of destruction of any kind, the hotel must construct 43 parking spaces on a parcel of land that cannot accommodate additional parking spaces. Also, the hotel may not expand or do major renovations or remodeling until the parking is brought into conformance.
- Assisted living center – Upon reviewing the conditional use permit, it was identified that the CUP restricted the assisted living facility to 85 beds. The property owner illegally converted rooms to accommodate 95 beds, thus, causing the property to be in violation of the CUP
- This apartment complex was developed on 30 acres. The property owners decided to sell 10 acres without going through the appropriate subdivision procedure, resulting in an illegal subdivision. Thus creating deficiencies in landscaping, open space and density.
- Have you ever opened up a survey and observed a property with 47 different sides? Which is the front, side and rear, is it possible to have multiple fronts or several sides? Can a property not have a rear? Sometimes surveyors can not interpret the code, but PZR will wade through the regulations and determine what is considered each of these.
- Introduction…….. If you want to follow along this is on Page 38 of the handout under the “ALTA Standards” tab The base ALTA survey will remove the survey exception for title. A base ALTA survey will not include or provide the required information to acquire many of the title endorsements as requested by many lenders or buyers. If different the Record and Measured calls must be shown on the survey.
- Location of Buildings (5g) is one of the 5 key items that PZR needs to Complete their zoning report and determine compliance.
- Here is a sample of a base ALTA survey
- Sample of a Full ALTA survey that includes most of the Optional Table A Items required to obtain the common title endorsements.
- On Page 41 of the handout under the “ALTA Standards” tab Table A Items 16, 17 and 18 are for HUD funded loans only per the current ALTA requirements. However…..most surveyors will include these items in the survey if negotiated in the beginning of the proposal process. If they are not willing to include these Table A Items I have had luck convincing the surveyors address these items by special note. Send me an email and I will send you the special note language for your future use.
- 80% of all states require that the surveyor set monuments at all property corners of the subject property when preparing a survey. The base ALTA requires surveyors to show ALL monuments that are Used and confirm their locations. A few states that do not require monuments to be set are CA, OR, WA, NY and NJ Even though a physical monument is not set at a particular corner in the field, it does not mean that the corner was not established.
- Can show relationship of other parcels to the main property. Can show off-site easements and there relationship to the subject property.
- Table A item 3 requires the surveyor to determine which flood zone The property lies in.
- There are two separate flood zone categories of interest and they are “ Non-Special Flood Hazard Areas” and “Special Flood Hazard Areas” It is a very good idea to either have the surveyor determine the flood zone of the property before the field work begins or have the surveyor prepare an additional proposal amount to complete the elevation certificate if the property lies within a special flood hazard area at the time the field work is being completed for the ALTA survey. This will provide all parties involved in the transaction the knowledge that elevation certificate will be require to help relieve the some of the cost associated with flood insurance. Another factor by doing this at the beginning of the proposal process is the associated survey fees for a returned trip to the site to complete an elevation certificate. This will save your client money and in turn keep for having a delayed closing waiting for the resolution of the elevation certificate. Current FEMA Elevation Certificate on Page 61 of handout under the “Flood Hazards” tab. FEMA is releasing a new elevation certificate next year.
- Another key item for PZR to determine zoning compliance for items like Floor Area Ratio, Density Ratio and Parking Requirements. This is not an additional cost to the survey since most states require the calculated area to be shown on the face of the survey.
- RED FLAG – if the property that is involved in the transaction is vacant land you might want to ask your client: “Is the property being developed in the near future?” The reason for this is the related survey cost and time for returning to the site at a later date to acquire the needed information for the design process. This will save your client a large amount of money to have this included in the ALTA survey if they plan to develop the property soon after purchase.
- This item is not needed for PZR to complete the zoning report but it nice to confirm everyone is same page. The 2005 ALTA Requirements no longer require the surveyor to plot setbacks on the face of the survey since surveyors can not interpret zoning laws and ordinances. Many surveyors will plot the setbacks because of their knowledge of the local zoning code.
- Not required for PZR to complete a zoning report.
- Table A – Item 7(b)(1) is needed for PZR to determine compliance to the bulk and density requirements. Table A – Item 7(b)(2) is normally not required on surveys since the meaning may vary by jurisdiction and would almost certainly require surveyors to be provided access to the interior of the building to measure all rooms. Gross Floor Area is used by PZR to complete the zoning report but in most cases is obtained from the rent rolls or other plans.
- David interjects
- Table A – Item 7(b)(3) is normally not shown on surveys unless specifically requested. These additional areas to be calculated must be provided to the surveyor. Be very specific on the directions of the area to be measured. Most of these areas can be scaled from the survey at a later date.
- Surveyor should specify where the height of the building was measured on the face of the survey.
- Look at the different variations of the “Maximum Building Height Definitions” shown. No surveyor has ever measured to the Average between the Ridge and Peak as shown on the Hip Roof example.
- See above list of notes
- 5 th and final item for PZR to complete the zoning report and determine compliance of the parking requirements. When the subject property has a parking garage either above or below ground the survey will only show those parking spaces that are on the surface of the bird’s eye view. The total parking counts however should include all of the striped parking spaces of the entire parking structure/area. If the property does include a parking structure and you are aware of this fact it is always a good idea to bring this up to the surveyor.
- David interjects
- The location of all Visible evidence of the utilities servicing the subject property shall be shown. This is included on most surveys and will meet many lender’s requirements.
- Most surveyors will show the underground utilities per the provided plans or utility atlas (only when available or provided to them). Since 9/11 – Utility companies and Municipal offices will not provide atlas or utility locations. Making it very tough to complete this Table A Item. Most states have a “One Call System” that will flag the underground utilities on site but this can take several weeks to accomplish in some areas. In certain areas these One Call Systems will not visit the site unless your are digging. We dig………small holes. It works sometimes. When requiring Table A – Item 11(b) you need to understand that this item is mainly used for site development. This Table A Item can become very costly and extremely time consuming in some states to include in on ALTA surveys and if the site does not have any future plans for construction or improvement it would be wise to waive this requirement. Most lenders or lender’s counsel will agree that this item is not required when it is explained to them in detail.
- Table A – Item 12 is not requested in most cases. Usually covered by a Fannie Mae/Freddie Mac surveyor’s certificate language.
- Be careful when you are requesting this item because of the possible additional cost. If the subject property is part of an industrial park or commercial subdivision plat ask for adjoiners to be shown on the survey. But if the subject property is a 1200 foot shopping center abutting a residential subdivision there is no reason to ask for 20 to 30 property owners listed on the survey. The plat name, recording information and lot numbers is acceptable and will help keep the cost down.
- This can save your client large amounts of money on large area surveys. The use of an aerial photo on an industrial property is a great tool in certain cases (To give you some idea of the savings that can be expected going this route. We recently did a very large paper mill that the lowest proposal amount that I received for a conventional ALTA survey was $295,000 and we did an ALTA using a recent aerial photo to show all of the improvements for right around $60,000.) The boundary is still field verified and all easements are still plotted and all areas of potential encroachment are located.
- Table A Items 16, 17 and 18 are for HUD funded loans only per the current ALTA requirements. However…..most surveyors will include these items in the survey if negotiated in the beginning of the proposal process. If they are not willing to include these Table A Items
- Table A Items 16, 17 and 18 are for HUD funded loans only per the current ALTA requirements. However…..most surveyors will include these items in the survey if negotiated in the beginning of the proposal process. If they are not willing to include these Table A Items
- Table A Items 16, 17 and 18 are for HUD funded loans only per the current ALTA requirements. However…..most surveyors will include these items in the survey if negotiated in the beginning of the proposal process. If they are not willing to include these Table A Items