Home buyers: Beware getting zoned out

Dear Steve,

Dear Out of the Zone,
Your agent -- if you had one -- should have known you were soon to be "outed" from "R" zoning and disclosed that fact before the sale. That's part of the agent's job in representing your best interests. Many cities and states have laws that require agents to disclose the most up-to-date zoning on your lot and nearby lots, though there's no way to tell if that's etched in stone in your locality. The seller may have known about the change as well.

Of course, there's a chance that the zoning change was made -- or was in the works -- and the agent's office was simply unaware of it. Cities are generally required to give public notice to affected residents only, and the change may have slipped past the agency goalie.

Either way, you could file a complaint with your local or state board (or association) of Realtors, although they can't legally conclude whether any laws or regulations have been broken or ignored. Only the courts or state real estate licensing authority can do that, and that means hiring an attorney to take civil action to try to recoup any potential monetary loss. Needless to say, that could be cost prohibitive.

Alas, you are right to fear higher real estate taxes now that you fall under the commercial-zoning umbrella. Such rates are almost always significantly higher than residential rates. But the flip side is that your property no doubt is more valuable now and you could profit from a sale.

You may also be faced with the possibility that adjacent land may be developed or redeveloped into a higher-traffic use such as a shopping center, mixed-use development, apartment complex or some other obtrusive use that will bring bright lights, increased traffic or even audible speakers to your neighborhood.

Cities rezone land for a number of reasons. Sometimes a developer wants to build a project that will produce considerable tax revenue for their coffers. Sometimes cities have experienced a significant shift in real estate-usage patterns since their original zoning was installed, and they want to make your neighborhood more consistent with some type of comprehensive-use plan. Or sometimes residential developers have simply built too many small-lot homes that don't produce enough property tax revenue to pay for the water, sewer and streets, and schools they use. So they go commercial.

Whatever the reason, notice of the change should have gone out. However, it may have been in the form of a small legal notice appearing in the local paper or through a nonofficial-looking postcard sent to you or the previous owner that may have been confused with a solicitation.

Try to determine how and when advance notice was given. The city or county should have a record of this. If, for example, it was by certified mail, you would certainly have a stronger legal position.

Also, homeowners usually have the right to apply for rezoning, and your local planning or planning-zoning commission may consider your request. When you contact city hall about the rezoning notice also ask who the contact person is for starting the rezoning process. Of course, you may have to pay a fee that will cover the costs of them hearing your case and notifying the public again, etc. This will probably be well worth the effort in future tax savings.

You might also ask around the area to see if a commercial developer is buying out other property owners. If the neighborhood complexion is destined to change, you might be happier elsewhere anyway.

Good luck.

-- Posted: July 10, 2004