What is a Legal Nonconforming Use?

By Alexis Whipple, Project Manager, and Sara Ehrentreu, Zoning Operations Manager at Partner Engineering and Science, Inc.

As we approach the 100^th anniversary of the landmark US Supreme Court case, Village of Euclid v. Ambler Realty Company (1926), it’s important to note its impact on commercial real estate transactions. The decision confirmed that zoning laws were constitutional and with them, the very real prospect that at any given time, due to circumstances often beyond an owner’s control, a property’s use could become incompatible with the permitted land uses for a zoning district. Fortunately, a property with a legal nonconforming use that was lawfully established with the necessary permits at initial construction should provide the landowner an option to either continue the use or pursue future redevelopment. The options available to a property owner will be determined by the municipality’s zoning code.

What are legal nonconforming uses?

Legal nonconforming uses also known as “grandfathered uses”, refer to the use of land, buildings, or structures that were permitted at the time of establishment but no longer conform to current zoning regulations due to circumstances outside of a property owner’s control such as rezonings, changes made to local zoning laws, property annexation, etc.

A legal nonconforming use is different from an unlawful use or a noncomplying use; the latter two scenarios could impose life and fire safety issues and require immediate attention.

Three scenarios for a legal nonconforming use

Since legal nonconforming uses are ones that were established lawfully with all necessary permits but now deviate from the code requirements due to situations outside of property owners’ control, there are some options available when deciding what to do with a legal nonconforming use depending on the property specifics and local zoning laws. Property owners can expect these three scenarios:

1. Keep the Property As-Is. Legal nonconforming uses are subject to and protected by nonconforming provisions contained within local zoning laws. These provisions may differ based on the municipality’s zoning code but generally allow for legal nonconforming uses to continue until it becomes material damage to the property and substantial reconstruction is needed.

2. Change Legal Nonconforming Use to Conforming Use. Another option is to change a legal nonconforming use to one allowed under the current zoning laws. This decision would depend on the owner’s specific goals and plans for the property. Take, for example, a legally nonconforming apartment building located in a commercial zoning district that does not allow multifamily residential uses but permits hotel uses. If building a hotel will bring in higher revenue, and the property owner’s goal is to maximize revenue, while at the same time minimizing risk, converting the use may be a viable option.

3. Termination/Amortization of Legal Nonconforming Uses. Depending on the local municipality, zoning laws may be in place with the objective of gradually eliminating legal nonconforming uses over a period of time. This is potentially the least desirable outcome for a legal nonconforming use because it is both inevitable and doesn’t give the property owner any control of the situation. In this scenario, the legal nonconforming use will be required to be changed to a conforming use after a certain period of time has elapsed.

Each property is unique with its own story, and the ultimate decision on what to do with a legal nonconforming use will depend on a local municipality’s policies and the ability to assess one’s risk of losing the right to re-establish the use in the event of a catastrophic occurrence.