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Land Use Regulations
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Do Your Homework
Disclosure of Defects View all LAND BUYING articles
“I just got wonderful news from my real estate agent in Florida. They found land on my property.” — Milton Berle, circa 1950
It is not illegal to sell an unbuildable lot – or a lot not suited to your use. For example, the lot may be approved for a two-bedroom home and you may want to build four bedrooms. First and foremost, you need to determine if the lot you are considering can be used as you envision.
The laws about what can and cannot be built on a piece of land vary enormously from area to area. However, in general, you can expect more restrictions, more complex permitting, and higher development costs than a generation ago. In evaluating a piece of land for purchase, take your time and proceed with your eyes open.
LAND USE REGULATIONS
Land use is governed by a wide-ranging set of regulations at the local, state, and sometimes federal level. Uses may also be restricted contractually through protective covenants and other deed restrictions. Before wasting too much time evaluating a piece of land, first make sure that you can build on it and use the land as planned read more
ZONING
Local governments establish zoning ordinances to regulate land use in their community. If your lot is not in compliance with zoning laws, or your planned building type or usage is not allowed in your zoning district, then you may need to obtain a variance. This can be a slow, complex process and there is no guarantee of success read more
DO YOUR HOMEWORK
Once you’ve found a parcel that seems attractive, you’ll want to do some preliminary, free research to if it’s worth pursuing further. Start by asking the seller or seller’s agent all the questions on your list, and if things check out, move on to town officials who can provide a wealth of information – all for free. In general, you won’t want to spend any money on investigations until after your offer is accepted read more
DISCLOSURE OF DEFECTS
In the old days, the principle of caveat emptor (let the buyer beware) applied to most real estate transactions. It was the buyer’s responsibility to thoroughly inspect a building or piece of land before purchasing. The trend over the past few decades has been to require sellers to disclose significant defects read more
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John says
How Can I Be Sure Lot is Buildable?
My name is John and I live in Texas and work at County Government for the last 22 years. I have been saving and looking for a place to live for years and I am about to retire. I finally found a lot in Downtown Dallas that I really like and can afford.
I talked with the City of Dallas Development Department to make sure I can build before I buy it but the gentleman, Mr. Franklin, I talked to said he would suggest I talk with an architect. I am trying to get an appointment to physically go down and talk with the supervisors there to get an answer if I can build or not. I do not want to purchase a lot I cannot even build on, I have been saving up for years and getting ready to retire and cannot afford to lose a big chuck on my savings.
So my question to you is, can you look over all the information I have gathered and maybe read the e-mail chain between me and Mr. Franklin and give me your opinion if you think this lot would be buildable and meet the building/zoning codes? To me this all sounds like a gamble, like I could purchase the property and then start going through the building permit process and then they say you cannot build on this lot, that would be terrible.
This is all happening fast and the Real-estate agent has given me until Wednesday(today and tomorrow) to make a decision to buy the property
Robin Tanner says
Can I Build On Land in Flood Zone?
I bought a lot that is 21 years ago 2 acres and paid 42,500.00. With taxes paid over the years and mowing I have 63,500.00 invested. When I purchased the property I did all of the research soil sample as well. It was a buildable lot and now I am finally ready to build. Can’t get a building in permit. Was told I now on an unbuildable lot and that happened 3 months ago but I was never notified. The map shows I am now in a flood zone. I am meeting with the mayor and zoning person. If I am refused a building permit do I have any recourse? I basically will have an unsellable lot. Thank you
buildingadvisor says
FEMA establishes a minimum set of requirements for communities that participate in its National Flood Insurance Program (NFIP) – 23,000 towns and cities in the U.S. But states and local communities are free to
Essentially, FEMA requires that to build in a 100-year-flood zone area (called a Special Flood Hazard Area or SFHA), the first floor of your house needs to be a certain height above the likely height of a flood. They call this level the 100-year Base Floor Elevation (BFE). Sorry about the alphabet soup, but the feds love acronyms.
This may require building on raised piers or a raised foundation, often with “breakaway” walls designed to release during a flood to let the flood waters safely flow though without undermining the structure.
In addition to the added costs for engineering, permitting, and construction, you will need to buy flood insurance if you have a federally backed loan. This typically costs from $700 to $1,400 per year and is limited to $250,000 in construction costs and $100,000 for contents. Added engineering, permitting, and construction costs can add tens of thousands of dollars.
Under some conditions, FEMA allows the land elevation to be raised with fill, subject to local regulations. However, building on filled land introduces additional foundation issues and significant expense.
FEMA does revise its maps periodically, so land not in a flood zone can be reclassified in newer FEMA map. Not surprisingly, the effects of global warming are increasing the risks of flooding in many areas. There are different levels of hazard indicated, but only the most severe are subject to the requirements outlined above.
Meeting with the zoning administrator is a good first step to help you get a handle on the local regulations. After that, you may want to get a survey done to determine if all or part oh your land is naturally elevated above the 100-year flood level. FEMA maps are generally accurate but not perfect. You can check your address’s flood hazard on FEMA’s Flood Map Lookup Page.
By the way, the phrase “100-year-flood zone” really means that each year, there is 1% risk of a serious flood. According to FEMA, that adds up to a 26% chance of getting flooded over the course of a 30-year mortgage. They also point out that land outside the 100-year-flood zone can still be at high risk of flooding. This is just the regulatory cut-off.
One last point: an unbuildable lot certainly loses a lot of its value, but will still be worth something. An abutter may buy it as an added buffer. Someone may want it for recreation, work uses, or other types of commercial development. A real estate agent with extensive experience in land sales could help you assess this.
Chris J says
Is A Lot Suitable for a Charter School?
I am a new realtor and have received an inquiry about building a school. What are some of the things to consider in choosing a site? Where might I find the information necessary to determine if the lot is suitable for a public charter school? Thank you for anyone’s insight as any tips would be respected and appreciated.
buildingadvisor says
In general, municipalities look favorably on schools, parks, community centers, houses of worship, and other facilities that serve the public good. So, in most towns, a school can be built in either a residential or commercial district, assuming it meets other zoning requirements. These might include such issues as setbacks, parking, and lot coverage (percent of total area used for construction).
That said, zoning laws are different in every city and town in the U.S. Some large cities, like Houston, have virtually no zoning – you can building anything anywhere — while others have intensive zoning and development regulations that make new construction nearly impossible.
Regarding schools, some municipalities have different rules for traditional public schools and charter schools; some treat them the same. In addition to being in the right zoning district, the town may require that the school provide adequate parking and conduct studies of traffic and other neighborhood impacts.
So it’s best to check with the local zoning department about whether a site is suitable for the intended use. Zoning districts and regulations are usually available online, but are not always easy to decipher. The buyers may want to hire an architect or consultant to review the site before committing. In any case, any offer should include an adequate study period and contingency that requires the lot be approved for the planned building.
Read more on Zoning.
Corey says
Is It Risky to Buy Land Without House Plans?
Quick question. I’m looking to buy land this summer and build a small cottage in the coming years. As such I have no building plans.
In terms of evaluating the buildability of a lot before purchasing it, do you have advice to mitigate risk (short of producing plans and getting a building permit)? Would soil/geotechnical evaluations require building plans?
Sorry if my question is confusing. Basically I just want to reduce the inherent risk of buying land without building plans. Any advice you can give would be gold to me.
Thanks in advance.
buildingadvisor says
A lot of issues can interfere with your development plans for a building site. The most common issues are perc testing and zoning. A site that does not perc may require an expensive alternative system or may be unbuildable altogether. On small sites, you must also make sure there is sufficient room for your leach field and replacement field. Clearances to boundaries, your well and neighbors’ wells, and structures must be maintained – as required by local regulations.
Although you may not be ready to build or even design a house right now, selecting a tentative house site and approximate footprint will help you and anyone you hire make realistic assessments about the septic system and other site considerations such as drainage.
Zoning is critical for two reasons — it determines what you can build and also controls what might be built around you. It also controls what activities are allowed and prohibited on yours and neighboring properties.
Among other things, it may limit the size, height, and number of bedrooms in your new house. It may limit what whether and what type of home business you may operate on the property.
This cuts both ways as it also limits what your current or future neighbors can do. Few people want a noisy trucking business or smelly pig farm going up alongside their vacation home. If the surrounding land is undeveloped, it’s always a good idea to find out what is planned in the near and distant future.
Other issues to consider are any restrictive covenants, easements, mineral rights, wetlands, or flood plains that might interfere with your use and enjoyment of the land.
Finally, you can learn a lot by walking the property at different times of day, different days of the week, and in different weather conditions. Take note of noise, traffic, and nearby business activities. If possible, visit the site during or after a big rainfall to look for wet areas and drainage patterns. The meandering creek nearby could turn into a raging torrent after an inch of rain. If possible, talk to some neighbors and ask lots of questions — it’s often the best way to get the real skinny on the neighborhood.
It’s not possible to reduce your risk 100% in a real estate deal and, in my experience, land purchases carry more inherent risk than buying a new or existing home. However, it sounds like you are doing your homework and should not have any big surprises when you are ready to build your cottage.
Best of luck!
Related Links: Land Buying Checklist Questions to Ask Building Site Evaluation
Spence McCallie says
Watch out for “flag lots.”
A flag lot is a parcel that has a narrow driveway access that is normally owned by you in fee. For example, I have a flag lot that is 6.69 acres, but a portion of this acreage is a 400 foot long by 30 foot wide drive entrance that allows access to the larger parel. I’m at the end of a cul-de sac, so there are a couple of these. narrowly spaced driveways at the bulb. Check your local development standards to ensure that your driveway will fit into the template.
In my case, I have a 30 foot wide driveway flag 400′ long. The property I purchased has a natural grade of nearly 35% for the last 100′ of the driveway, and the county allows only a 12% grade for driveways. The minimum width for a driveway is 16 feet. To that end, I was faced with a choice: Do I build retaining walls along with associated culverts ($$$ for engineering, drainage calculations, construction, etc), or do I just purchase the adjacent parcel (or purchase an easement across)? I chose to purchase the adjacent parcel.
Much like Dennis above, The seller wanted over double what my offer was. The reason my offer was so low is that the lot in question was also unbuildable due to its steep terrain, and in reality, the only reasonable way of constructing a driveway was across my land. By combining the two lots, the whole was worth much more than the sum of the parts.
Val says
Building on Unbuildable Lot
Hi. I have single-family house on two acres of a land. One acre is wooded and not buildable. Is it possible turn it into the buildable area and subdivide it later. Thank you
buildingadvisor says
Whether your lot is subdividable and whether it is buildable depends entirely on local zoning and subdivision regulations. These determine minimum lot sizes and under what conditions you can subdivide an existing lot.
If you wish to subdivide and sell it later, it is best to do all the legal work now rather than wait. In general, zoning regulations only get more restrictive over time. They almost never get more lenient.
Often an existing lot is governed by older, less-restrictive zoning regulations under “grandfather” rules in local zoning laws.
The first step is to schedule a meeting with the local zoning official – at the town or county level, whichever has jurisdiction. Tell them what you wish to do and they will tell you the required procedure. If a special permit or variance is required, ask what the procedure is and what is the likelihood that it will be granted.
If a variance is required, you probably want to speak with a real estate lawyer, since the process is usually cumbersome. A special permit is easier to obtain than a variance, but still requires jumping through some hoops. A lawyer can tell you what it would cost to have them file the application, and what is your chance of success. Also if you are told that the lot is not subdividable, they may have a work-around strategy. For example, you may be able to build a second home on the property if it is an “affordable” dwelling unit. Best of luck!
Read more about Zoning & Variances.
Dennis says
Valuation of Unbuildable Lot
Hi, I own a non-buildable 50×100 ft. lot, roughly assessed at 8k. Someone just bought the house adjacent to the lot for $450K with no garage and minimal driveway space. The new owner wants to purchase my lot so he doesn’t have to shuffle cars in the wintertime when you cannot park in the street here. I don’t think
He’s made an offer of $5,500 dollars, but I don’t should sell for less than assessed value. How do I determine the convenience value of expanding his lot size, solving parking issues, and enabling him to add a 2-car garage down the road, which would improve his home’s market value. Which value should I use that makes sense for both of and is fair value? Thanks in advance!
buildingadvisor says
As you can imagine, putting a precise price on an unbuildable lot is a difficult thing. I wouldn’t pay too much attention to a tax appraisal as these often have little to do the actual sales price of real estate.
Any property appraisal is only an educated guess at what property will sell for on the open market. Since an unbuildable lot is a somewhat rare bird with a very limited market, it is difficult if not impossible to find meaningful comps. So the appraiser must apply various fudge factors for such things as “lack of marketability”.
Nonetheless, getting a professional appraisal might be worth a few hundred dollars. I have found appraisals useful in trying to justify a sales price when you are selling real estate “by owner.” If a buyer asks, “how did you come up with that price,” you have a good answer. You can also advertise that your asking price is X thousand dollars below the appraised value.
Also, in talking to a seasoned appraiser, you will learn about how unbuildable lots are valued – including, I would guess, how much it might raise the value of your neighbor’s property. One concept they use is the “highest and best use” of the property. This might give you some ideas for other potential buyers you may not have considered.
Whether your neighbor is swayed by this information remains to be seen.
Bottom line: any property is only worth what someone is willing to pay you for it. The most likely buyer of an unbuildable lot is an abutter, like your neighbor, who wants to enlarge their property, increase their privacy, or prevent someone else from buying it and using it to store old trucks, etc. Even though the lot cannot be used for a dwelling unit, in most cases it can be used for other structures depending on zoning – garage, barn, agriculture, etc.
The other type of person who might buy an unbuildable lot is someone who thinks, rightly or wrongly, that he can figure out a way to build on it by getting a variance or some other loophole. Occasionally they are successful, but more often they are not.
Your question about how much the added land would increase the value of your neighbor’s property is a good one and relevant. That is a calculation he is probably trying to make as well, and one that an appraiser can help you with. How much he personally values the added space and convenience, however, is subjective and impossible for you to know – other than by what price he ultimately agrees to.
People often invest money in real estate – say adding a swimming pool – that they know they will never recover, for the use and enjoyment they will get while they live there. A home is more than just an investment.
Other than getting a professional appraisal, you are left with two people haggling over price as people have done for thousands of years. There are no hard-and-fast rules here, only negotiation. But the more information you have about the land’s potential value, the more effectively you can negotiate.
In any case, it never hurts to counter with a higher price, and the buyer might come around. Be patient. Since it appears that there is only one seller and one buyer in this negotiation, there is no reason for either party to rush. If you can find any other potential buyers, that would certainly help your cause.
FYI: I purchased an adjacent unbuildable lot a little bigger than yours (80×160) several years ago for about $20,000. The seller was asking $70,000 and I offered $15,000. Building lots of that size were going for about $200,000 at that time. The wooded lot protected my view and privacy. Its current assessed value by the town is $6,000. However, I believe that it has increased the sales value of my house by at least $20,000 as it will double the size of my lot and provide nice wooded views when and if I sell. I used this economic rationale to justify my the purchase price, but like many real estate purchases, the decision had a strong emotional component – desire for views and privacy and fear of what might end up in my backyard if I didn’t buy it. I followed my instinct and am glad I did.
Spence McCallie says
Watch Out For Flag Lots
A flag lot is a parcel that has a narrow driveway access that is normally owned by you in fee. For example, I have a flag lot that is 6.69 acres, but a portion of this acreage is a 400 foot long by 30 foot wide drive entrance that allows access to the larger parel. I’m at the end of a cul-de sac, so there are a couple of these. narrowly spaced driveways at the bulb. Check your local development standards to ensure that your driveway will fit into the template.
In my case, I have a 30 foot wide driveway flag 400′ long. The property I purchased has a natural grade of nearly 35% for the last 100′ of the driveway, and the county allows only a 12% grade for driveways. The minimum width for a driveway is 16 feet. To that end, I was faced with a choice: Do I build retaining walls along with associated culverts ($$$ for engineering, drainage calculations, construction, etc), or do I just purchase the adjacent parcel (or purchase an easement across)? I chose to purchase the adjacent parcel.
Much like Dennis above, The seller wanted over double what my offer was. The reason my offer was so low is that the lot in question was also unbuildable due to its steep terrain, and in reality, the only reasonable way of constructing a driveway was across my land. By combining the two lots, the whole was worth much more than the sum of the parts.