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What's a Zoning Compliance Report?

Ira Grossman explains some of the intricacies of a zoning compliance report

Requesting a zoning report is not uncommon in an equity transaction, particularly with pension funds and insurance companies.

If a subject property was developed in accordance with an older version of the relevant building code it is usually considered legally non-conforming. Therefore, it is important to know what the ordinance requires when property damages reach a certain percent of replacement value. If a newer version of the ordinance is in place and there is a bad fire or other major damage to the property, many jurisdictions require the property to be rebuilt to the current code. This could change building heights, setbacks, landscaping, and parking requirements.

As an example, the Zoning Ordinance of Indianapolis refers to this as follows: "Legally established nonconforming uses and structures or buildings not located in any flood control district may be restored to their original dimensions and conditions if damaged or partially destroyed by fire or other naturally occurring disaster provided the damage or destruction does not exceed two-thirds of the gross floor area of the building or structure affected". A more significant loss will require restoration that complies with the current code.

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