Hi everyone! Just wanted to talk about municipal zoning as part of your due diligence this week as we have had a transaction with a lot of problems because of a zoning oversight.
When you are purchasing a property, even if it is a straight forward sale, it always makes sense to check the zoning for that particular area. A good example of this is a buyer a few years back bought a fairly new home on a dead end street. They went to the city prior to closing and found out that on the master plan their quiet little street was a major thoroughfare. This could have been a horrible shock to them, but they did their homework. They decided that it was far enough down the road that they would go ahead and buy the house. They sold it about 8 years later, and the road came through a couple of years after they had sold it. It worked out fine for them, but not so good for other people.
We have a client who bought a bank from a bank. Banks always sell their properties AS IS. They also have the paperwork to cover their bottoms just gloriously. They don't need to disclose anything! Come to find out, the county had kicked out the previous owners prior to the bank owning it because of zoning violations and deemed the home inhabitable. That's was why he gave it back to the bank. This was unknown to the buyers. They lived in the property for several years. Now when they went to sell it, they couldn't get the necessary rebuild letter (A letter required by a lender saying that in the event the property burns down the county or city will allow the home to be rebuilt) from the county as they were occupying it illegally. We are hoping we can work this out, but it would have been so much easier to remedy prior to purchase, while the bank was holding the bag not the new owners. They would have most likely gotten a huge discount on the purchase price.
The caveat " Let the Buyer Beware" is always great advice. Cross your T's, dot your I's and check out the rest of the alphbet also. Zoning is one of those things that really needs to be verified by the buyer, don't trust anyone else for that job... don't trust your realtors word, don't trust anyone but the city official who is in charge, and then be sure and save his or her name and the date they gave you the zoning... Better yet, get it in writing. A residential zone can change, so can any other zoning. Ask to see the master plan.
If you have any questions concerning real estate you are welcome to call us during office hours. 435 884 9449.
When you are purchasing a property, even if it is a straight forward sale, it always makes sense to check the zoning for that particular area. A good example of this is a buyer a few years back bought a fairly new home on a dead end street. They went to the city prior to closing and found out that on the master plan their quiet little street was a major thoroughfare. This could have been a horrible shock to them, but they did their homework. They decided that it was far enough down the road that they would go ahead and buy the house. They sold it about 8 years later, and the road came through a couple of years after they had sold it. It worked out fine for them, but not so good for other people.
We have a client who bought a bank from a bank. Banks always sell their properties AS IS. They also have the paperwork to cover their bottoms just gloriously. They don't need to disclose anything! Come to find out, the county had kicked out the previous owners prior to the bank owning it because of zoning violations and deemed the home inhabitable. That's was why he gave it back to the bank. This was unknown to the buyers. They lived in the property for several years. Now when they went to sell it, they couldn't get the necessary rebuild letter (A letter required by a lender saying that in the event the property burns down the county or city will allow the home to be rebuilt) from the county as they were occupying it illegally. We are hoping we can work this out, but it would have been so much easier to remedy prior to purchase, while the bank was holding the bag not the new owners. They would have most likely gotten a huge discount on the purchase price.
The caveat " Let the Buyer Beware" is always great advice. Cross your T's, dot your I's and check out the rest of the alphbet also. Zoning is one of those things that really needs to be verified by the buyer, don't trust anyone else for that job... don't trust your realtors word, don't trust anyone but the city official who is in charge, and then be sure and save his or her name and the date they gave you the zoning... Better yet, get it in writing. A residential zone can change, so can any other zoning. Ask to see the master plan.
Posts
No comments:
Post a Comment