LEGAL ISSUES

Pick a Legal Location and Avoid Zoning Trouble



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Legally speaking, it's far less important whether a certain spot is a good one for your business than if it'sproperly zoned for what you plan to do. The first thing to remember is that you should never sign a leasefor a business space without first knowing that you'll legally be able to do business there. (One exceptionto this is that it's OK to sign a contingent lease, with a clause stating that the lease won't be binding if youdon't get zoning approval.) Being forced to move your business is a headache enough, but not nearly ascatastrophic as being held liable for payment on a lease for a space that you can't use.

As you may know, local zoning laws (often called ordinances or land use regulations) prohibit certainactivities from being conducted in particular areas. For instance, a nightclub wouldn't be allowed tooperate in a district zoned for residential use. Sure, only a fool would try to open a disco on a quietresidential street but there are less obvious zoning no-nos that you need to observe.

Zoning ordinances typically allow certain categories of business to occupy each district of a city orcounty; mixed commercial and residential uses might be allowed in one district, while another districtallows heavy industry and warehouses. So if you open your small jewelry-making business in a spacezoned for commercial use, you could be in for a real headache if zoning officials decide you're alight-industrial business not allowed to operate in a commercial district.

Besides regulating the types of business in certain areas, zoning laws also regulate specific activities.Depending on your area, you might be subject to laws regulating parking, signs, water and air quality,waste management, noise, and visual appearance of the business (especially in historic districts). And inaddition to these regulations, some cities restrict the number of particular types of businesses in a certainarea, such as allowing only three bookstores or two pet shops in a particular neighborhood. Finally, somezoning laws specifically regulate home businesses.

Expect Zoning Laws on Parking Spaces and Business Signs
Local zoning laws commonly require a business to provide parking. They may also regulate the size and type of business signs. Be prepared for your city or county to look into both these issues. If there's already a parking problem in your proposed area, you may have to come up with a plan for how to deal with the increased traffic your business will attract. Also be ready for zoning officials to get nitpicky about your business sign. Many local laws limit the size of business signs (no signs over 5 feet by 3 feet, for instance), their appearance (such as whether they're illuminated, flashing, colorful, or made of neon), and their placement (flat against the building, hanging over the sidewalk, or mounted on a pole). There are even some regulations attempting to limit the use of foreign language on signs. Be sure to find out what your local regulations are before spending money on having signs made.

One of the key things to understand about zoning laws is that more often than not, they're enforced for thesake of the other people and companies in the neighborhood (this is particularly true of home-basedbusinesses). While some areas are strict about their zoning laws, most of the time you won't have a zoningofficial knocking unannounced on your door unless neighbors have complained or you're in flagrantviolation of the laws. Since enforcement is often triggered by complaints, it's a good idea to get to knowyour neighbors and develop good relationships with them.

In most areas, zoning laws are created and monitored by city and county planning departments. Lookunder "planning" or "zoning" in the government section of your phone book.

For answers to zoning questions, never rely on what the previous occupants of the space did. Don'tassume that you'll be allowed to do a certain activity simply because the previous tenants did it. For allkinds of reasons, some businesses get away with zoning violations, even for long periods of time.Typically, however, new occupants are scrutinized more carefully than already existing businesses. Itmay not be fair, but it's common for a new business to be told it can't do what an old one had long beendoing.

It's also possible that the previous tenants, without violating the zoning rules, were doing something that isno longer allowed in the area. For example, the previous occupants could have had a zoning variance (anexception to zoning laws) for their particular business -- one that won't apply to you. And lots of timeszoning laws change, but businesses that are already in a space are allowed to keep doing what they weredoing, even if the activity violates that new zoning law (a system referred to as "grandfathering"). When atenant with a grandfathered exception leaves and new occupants come in, the new business will normallyhave to abide by the new law.

Copyright © 2000 Nolo.com Inc.

Related resources at inc.com:
Thrown by the Zone
Locating Your Business

Last updated: Nov 1, 2000




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