One of the key roles of local government is approving what people build on their land. From zoning to permitting and inspections, a local government can be a great partner or your worst enemy.
For just about any type of commercial project an investor wants to undertake, government action will be required.
Time and again, investors in commercial properties can find themselves in protracted battles with the government without the proper due diligence on what will be needed to accomplish the investors’ desires.
You do not want to invest significant amounts of money or sign a binding contract without understanding everything that will need to be done with the property.
To be prepared, you need to work with an attorney who understands all the issues that come with land use and permitting to give you all of the facts and possible scenarios you need to know before investing in any commercial real estate.
Check the zoning!
At the heart of any government approval is understanding what the government will allow on a particular property. Every parcel in the United States is zoned for something, a church, a single-family home, a warehouse or more.
In many cases, the zoning is not obvious. For instance, most people have driven by a piece of land with one or two cows on the property. Around the land on adjacent properties are hotels and shopping centers in this case.
The land with the cows may be very attractive to purchase for a commercial real estate investor, but the investor must understand the government will need to approve a zoning change from agricultural to a designation that allows them to build what they want.
That change will usually be smooth – after all, a new shopping center will provide significantly more tax revenue for the government than a cow pasture. Plus, because all the adjacent properties are commercial, there are relatively few detractors.
Still, there are multiple boards to approve the change and the investor will still have plenty of preliminary work to do on the legal and engineering needs of the process.
But what if that vacant land was surrounded by neighborhoods and you want to develop a small 24-hour urgent care center on the property? That is going to be significantly more effort, more legal work and higher costs as the neighbors decide they want to keep their cow pasture and decide to fight the approval.
Now, that investor will need to pay for those engineers and attorneys to spend more time on the project. The investor may need to hire a lobbyist and perhaps a public relations firm.
All of that should be taken into account before the investment is made.
Zoning can also play into leases as well. There may be some restrictions on zoning preventing you from operating the business you want to operate. Once you sign a lease, you will be responsible for paying lease payments – even if zoning will not let you open.
The attorneys at The Orlando Law Group have a unique understanding of how zoning can affect properties and can alter plans for a commercial real estate investor and can help guide you to how long and lengthy it may be to ensure your zoning is correct.
How long does permitting take?
Have you read every line in your lease or your sale agreement carefully? After all, there are often phrases in every lease that could cause an issue.
One of the key phrases, particularly in a tenant build-out, is “build-out to be completed by ___ days after execution of the lease.”
If you miss that deadline because the government runs slower than you might think, you will be in violation of your lease.
The Orlando Law Group works with businesses throughout Central Florida and, to be clear, there is very little rhyme or reason on how long it can take to get a building project permitted.
In unincorporated Orange County, there are more than 100 different kinds of permits you might need. Just for a commercial building permit in Orange County, there could be more than a dozen different forms to fill out. There are four different permits for types of tree removals in Orange County.
Every city in Orange County has different forms, different permits and different processes.
Making things even more complicated is how cities and counties control land use is often disjointed, resulting in different processes, procedures and timing for permitting for buildings across the street from each other.
The good news is that, in most cases, governments want to work with you to approve permits. They understand holding up permits prevents investment; it reduces jobs and keeps eyesores or empty lots on the tax rolls. But it still takes an expert to work through the approvals and make sure there are no issues.
Plus, it is always best to fully understand what is needed before purchasing a property or even signing a lease. Not fully understanding the permitting process could cost any investor a lot of money.
Inspections: the last step.
After construction is finished and you are ready to open your business, the government sends in an inspection team to ensure everything built matches what was approved.
While this may sound easy, it can often be the most frustrating part of the process in opening your business. After all, your new business looks complete, the fixtures are all in, and the furniture has been delivered.
All you need is the government’s approval, but the fire inspector finds fault with the placement of the emergency exits. They are too high by three inches.
For the most part, you will need to fix the issue before receiving the final approvals, but by working with an attorney, who understands the process and has worked with the government officials, there can be ways or methods to help speed up the process.
For instance, the government could order a temporary certificate of occupancy, where the business can open, but must fix the issue quickly. This is not available all the time but can be looked at on a case-by-case basis.
The goal for everyone is to get your investment or business operating as soon as possible, in a safe manner that is acceptable to the community around it. It may seem overwhelming, but with the right guidance and assistance, it can be stress-free.
The attorneys at The Orlando Law Group represent clients in commercial real estate and more in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.
Last Updated on October 5, 2023 by The Orlando Law Group