A property that looks perfect for a buyer’s intended use can still be legally off-limits for that use, depending on its zoning designation. Zoning and land use review is one of the most critical — and most commonly rushed — components of commercial real estate due diligence.
Understanding Zoning Designations
Local zoning ordinances (in Miami-Dade County, governed by the county’s zoning code and applicable municipal codes) designate what uses are permitted on a given property — commercial, industrial, residential, mixed-use, and further subcategories within each. A property’s current zoning may permit the seller’s existing use while prohibiting what the buyer actually intends to do with it.
Permitted Use vs. Conditional Use
- Permitted (by-right) use — allowed under the current zoning designation without any additional approval
- Conditional use — allowed only with a specific approval process, often involving a public hearing and discretionary review by the local zoning board
- Prohibited use — not allowed under the current designation at all, requiring either a variance or a formal rezoning to pursue
Buyers should confirm which category their intended use falls into well before the diligence period expires — discovering post-closing that an intended use requires conditional approval (or isn’t permitted at all) can be a costly mistake.
Legal Nonconforming Use
Sometimes a property’s existing use predates current zoning regulations and would not be permitted if applied for today — but is allowed to continue as a “legal nonconforming use” or “grandfathered” use. These situations carry risk: nonconforming use status can be lost if the use is discontinued for a certain period, or if the property undergoes substantial renovation, potentially forcing the property into compliance with current, more restrictive zoning.
Variances and Rezoning
If a buyer’s intended use isn’t permitted under current zoning, two paths may be available:
- Variance — a discretionary exception to a specific zoning requirement (such as a setback or parking requirement), typically for narrower, more technical issues
- Rezoning — a formal change to the property’s zoning designation, involving public hearings and local government approval, generally a longer and less certain process
Neither is guaranteed, and both typically require time that may not align with a buyer’s closing timeline — making it important to address zoning questions during due diligence, not after closing.
Concurrency and Impact Fees
Some jurisdictions require confirmation that adequate infrastructure (roads, water, sewer capacity) exists to support a proposed development or change in use — called concurrency review — and may impose impact fees tied to the intended use’s demand on public infrastructure. These costs and requirements should be understood before finalizing a purchase price.
Making Zoning Review Part of the Purchase Agreement
Buyers with an intended use that isn’t clearly permitted by-right should consider making the purchase contingent on confirming zoning compliance (or securing necessary approvals) during the due diligence period — building this protection into the purchase agreement itself, rather than discovering a problem after the contingency period has expired and earnest money is at risk.
Buying commercial property with a specific intended use in mind? Brent A. Levison, P.A. helps buyers navigate zoning and land use issues before they become costly surprises. Contact the firm today for a consultation.
The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.