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Know your (future) neighbors
when subdividing land
Dear Steve:
I need some information on splitting a 30-acre parcel. I own the land
and want to sell five to 10 acres. The property is located in northern
Colorado. It could be commercial land or agricultural. Any information
you could provide to help me would be great.
-- Yvonne
Dear Yvonne:
Oh, if it were only that simple to carve up and parcel off your
own land in this great country of ours.
Depending on where you live, your path to parceling
could be relatively straight, or it could be twisted, craggy and
downright difficult to navigate.
You don't indicate if you are in or near a city, so
it makes it a little tougher to fill in some of the blanks. But
let's start with a few rules of thumb that apply to a "lot
split" in most cities.
If you just want to sell off a chunk of land to an
investor who's content to hang onto it for awhile, you can usually
do so with minimal interfacing with local city or county taxing
authorities, other than perhaps filling out a lot-split application.
But if a buyer/developer wants to build something
on the property -- be it a cul-de-sac, church or business, for example
-- there can be numerous hurdles to jump over, or crawl under, as
the case may be.
Developers will know what uses are permitted for the
land and just how flexible cities are in changing zoning. If the
property is zoned for agriculture, it's a little easier to get city
planning and zoning commissions to rezone it for residential or
commercial use. But if it is designated for commercial use, it's
usually tougher to change it to residential use, with some exceptions.
(That's because commercial users generally pay higher taxes.)
But before owners/developers will buy your property,
they'll want to perform their due diligence, which usually includes
surveying the land, securing zoning changes and even contracting
land-planning and architectural services before they can be approved
for a project by a city. Later, they may have to pay road-impact
fees and pay for the construction of sewer and water services to
the site, if the infrastructure is not already there.
Hence, they'll probably want to build as much density
as allowable on the land to recoup their expenses. But I would guess
you probably don't want a high-density, high-traffic use on your
property's frontage. Ask lots of questions before completing your
land sale.
Also, try to secure as much earnest money as possible
if you allow a potential buyer to contract for your property, especially
if there's a possibility the deal -- and your land -- could get
tied up in zoning for several months. A good commercial real estate
broker or experienced real estate agent can walk you through the steps and
possibly have an alternate buyer lined up for you should your first
deal crater.
See you at city hall, Yvonne.
-- Posted: Jan. 10, 2004
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