pzrEnvironmental Due Diligence

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Zoning Reports are a key crucial element for CRE due diligence from early site review to real estate transaction closings. LightBox PZR® provides one for every CRE need

LightBox Profile
LightBox Insights
March 4, 2023 4 mins

Detailed and accurate zoning reports determine the criteria for what real estate developers can and cannot build on a given parcel. These reports also provide insight into how builders should plan to construct a proposed structure to conform to local regulations.

Lenders, insurers, and buyers use them to carry out due diligence to understand risk and ensure they’re making a sound investment. Zoning reports can determine how to rebuild after a fire or other disaster, what riders are relevant so that the property will conform, and how to best deal with nonconforming properties.

  1. Zoning reports, which are crucial for any real estate transaction, come in many forms
  2. Most require municipal document research and analysis, which can be a cumbersome and time-consuming process, and other detailed information
  3. PZR®’s gold-standard zoning data reports help real estate professionals make smarter decisions and confidently close deals

What goes into a zoning report? There are several kinds, tailored for specific needs and use-cases. A small business, fast-food restaurant, or a hospital might need a basic report that indicates violation information, with no other analysis. We can pull the appropriate zoning information and fulfill the request, tailoring it to the client’s needs. We have a time-tested system for finding the right person in a municipality to ask for documents and for understanding the cost and timing involved in the process. Clients know they’re better off letting us deal with cities rather than trying to do so themselves because of our ability to streamline the process.

PZR® offers several zoning report options:

  • PZR Report®: The PZR Report® provides a full zoning compliance review, outlining conformance, risk, and rebuildability in the event of destruction, which could impact the borrower and the lender in a transaction. PZR® reviews the current Municipal Zoning Requirements along with the existing Survey in conjunction with Municipal approvals and historical documents.  Conformance Status is confirmed to Zoning as to Permitted Uses, Building Setbacks, Building Height, Density/FAR, and Parking, as well as and a Right to Re-Build statement for Legally Nonconforming Issues.  Documents obtained from Municipalities:  Zoning Verification Letter – including copy of Municipal Zone Map, copies of applicable Variances, Special Permits, Conditions, Ordinances and Rezoning Approvals, copies of Outstanding Zoning / Building Code / Fire Code Violation, as well as copies of existing Certificates of Occupancy and Approved Site Plans.
  • Executive Summary Report (ESR): The ESR reviews the current Zoning Requirements against the existing ALTA Survey for conformance, and is used by real estate professionals needing a quick look at the zoning conformance issues at the property, without full document review.   An ESR can be provided without a Survey, but perhaps with qualifications.  Conformance is determined as to Permitted Uses, Building Setbacks, Building Height, Density/Bulk/FAR, and Parking, from review and analysis of the underlying Zoning Code.  Applicable Municipal Zoning Code Sections are attached to the ESR, as well as the current Zoning Map.  No other documents ordered from the Municipality, unless determined necessary.
  • Use-Analysis Report: This option is preferred when you are simply trying to determine if a particular Use or Uses are permitted on your land. These reports offer a conformance determination for the existing or proposed Use; a conformance statement about permitted uses on the property, either existing or proposed; the zoning requirements for building setbacks, building height, density/bulk and parking requirements for the zoning designation on which the property lies for informational purposes only.  No conformance determination is made to these requirements.  The applicable Zoning Code sections and the Zoning Map are included.  A Survey is not required for this type of report.
  • Title Insurer Packet (TIP):  This report provides Zoning Data to the Title Company and/or Land Surveyor for their compliance with the 2021 Alta Survey Requirements – Optional Table A Item 6.  Included is the existing Zoning Classification, the Building Setback Requirements (including identification of specific setback lines to assist the Surveyor in plotting these lines on the Survey), Maximum Building Height, Density/Bulk/Floor Area Ratio Restrictions, as well as the appropriate Parking Formula Requirements. Applicable Zoning Code Sections are attached, but no municipal documents are ordered.

Our PZR® team can handle various documents, acquisition, and use analysis requests. For example, a customer might want to know only the currently permitted use on a parcel, what zoning designations are permitted, or what might be done with a special permit. They may want to know if they can build a convenience store, or a self-storage facility, for which they need only essential information in the early stages. When they require more detail, they request a full PZR® report.

Learn more about PZR Reports®

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