Tuesday, May 20, 2014

In The Zone

There are different levels of restrictions that can be placed on how you can use real estate.  These fall in to four broad categories:  Zoning, Codes/Licensing, Covenants and Environmental Law.  The hierarchy and interweave of these are challenging even for us who normally navigate real estate.  For the layperson, these regulations can be beyond frustrating. 

To illustrate how each of these layers of regulation comes in to play, we’ll consider the example of the placement of a dog kennel behind a homeowner’s house.

Zoning is the most familiar requirement.  Created by the city or county, it groups property usage to minimize conflict and nuisance issues, to control and promote growth, and to obtain the best use of each plot of land.  Sometimes zoning will come in multiple layers over the same area.  For example, a home inside an historical overlay district is more limited to changing the exterior, although basic zoning doesn’t address this.

In our dog kennel example, a residential home would be barred from an area zoned for office buildings.  Even within residential zones, there are zones for different sizes of land and minimum square footage requirements.  Attempting to place a dog kennel in a high-density residential zone (such as townhomes) would be difficult:  Our homeowner will be looking for a community with large lots.

The next consideration is building code compliance and licensing - both provided by the local government.  Assuming that the homeowner can meet the requirements to obtain a business license, his kennel will need to comply with building requirements.  For example, a city may prohibit the use of chain link fencing for any use on any piece of land.

Once past the local government level requirements, the homeowner has to consider what land use restrictions were put in place by agreements between past landowners.  These agreements fall under contract law, and are handled differently from government-imposed regulations.  When a person purchases a piece of land, he automatically enters into this contract.  Homeowners rarely research restrictions recorded at the courthouse.  For land lying with a homeowners association, it is not unusual to see a prohibition on businesses that increase vehicular traffic.  Various noise and nuisance regulations are also the norm.   Attempting to establish a kennel in this situation would be a violation of the terms of the land contract, with either by the Association or a next door neighbor resorting to litigation.

Zoning regulations cannot eliminate land covenants, nor can a municipal agent impose land use contract terms on a piece of property.   However, if the courts determine that a particular covenant is vague or violates public policy, it could be voided.  This happened in the case of Providence Construction Company v Bauer, where a condition was made that the homeowner could not oppose any future rezoning by the developer.  This was a violation of the owner’s constitutional rights to oppose government action (zoning).

Environmental Law
Finally, at the federal government level, the growing impact of environmental regulations must be considered.  Environmental concerns extend beyond issues like trash burning and flood controls, to areas such as maintaining aesthetics by limiting tree removal or restricting types of plants installed.  For our pet kennel example, animal waste is a known groundwater contaminant.  Establishing a proper way of cleaning the animal pens raises a real challenge.  If the land lies near a creek or other waterway, providing a satisfactory cleaning system may be cost prohibitive.

Our increasing regulatory environment presents challenges to understanding your property rights.  To guard against unwelcome surprises, be sure to enlist the aid of experts such as title companies and real estate attorneys to identify how all four of the above factors will come in to play in your specific situation. 

No comments:

Post a Comment