Applying to change zoning while marketing for sale

5 Replies

Hello all!

Looking for help from those who know zoning regulations in Georgia, specifically in East Point, metro Atlanta

I purchased a multifamily property a few months ago where I found out after buying it that the city had gone and changed the zoning from multifamily to single family a few years. I've stopped rehab work on it since the city won't give permits to finish the interior back to a 5-unit because of the zoning and the work is going to cost a lot more than anticipated so the property is sitting gutted and just a cash drain. I'm looking to sell it for what I can, but since rezoning it back to multifamily so that the current structure is usable could raise the value, is it possible to start a rezoning process while simultaneously marketing a property for sale, or in the case I find an interested buyer, could I sell it to them and then have them pick up with a rezoning attorney where I had left off in the process?

Thanks in advance for reading this post and any advice you guys have!

Steven H.

I realize you're looking for folks with expertise specific to Georgia, which I do not have, but I wanted to offer a suggestion.  In my area, continued use of the multi-family use would make it a legal, non-conforming situation.  That is, if you don't cease to use it as a multi-family, the use would remain legal.  If you cease to use it as the non-conforming use for one year, it reverts to current zoning.  It'll be an uphill battle to rezone it back to something the city/neighbors decided was no longer appropriate. 

Was it being used as multi-family when you bought it? If so, then chase after a legal, non-conforming use letter from the city planning department. If not, then it's likely to stay a SFR. If that's the case, look into whether you could apply for an accessory unit (mother-in-law apartment) as a special use in a SFR zone district. Good luck.

@Theresa Worsham has some good advice with the "continued use" situation. That has helped me on a SFR rental that had been rezoned commercial that I wanted to keep SFR.

The short answer to the real estate marketing portion of your questions is Yes. You can go ahead and try to get the ball rolling with rezoning while simutaniouly marketing for sale. Just be sure you disclose the entire situation to potential buyers.

PM me if you need any local Atlanta contacts to help!

Another possibility that falls somewhere in between...

Perhaps you could take it down to a 4 unit complex. I know if some areas anything 4 or under is considered SFR. Just a thought of something to check out.

Hi Steven,

That sucks! You are in a bit of a pickle at this point. Always always always research the zoning before buying a property.

Disclaimer: I am not a lawyer, and this is not legal advice. That said, I think I can help orient you in the right direction.

The rules vary from municipality to municipality, but typically if your renovation exceeds a certain percentage of the property's value or square footage, it is no longer considered a "nonconforming use," and becomes illegal. You need to read East Point's code thoroughly to understand a few things:

1) How East Point defines a "nonconforming use" (since every municipality is a little different), and if it is still possible for you to comply with the law and fall under that definition

2) The City's violation and enforcement procedures, so you know what the legal stakes are

3) The zoning regulations that currently apply to the property, and the most expedient procedure to solve your problem. It could be rezoning, or it could be something else entirely, such as a land use permit. You need to know what your end game is, what the approval process is, how long it will take, and what it will cost.

4) Is the zoning conditional? (Usually designated by a "C" tacked onto the end of the district name, for example "R-4-C." If so, you need to call the City and ask for a copy of the zoning conditions that apply IN ADDITION to the general regulations.

5) The property's zoning history, why it was rezoned, and the likelihood that you can successfully obtain the approval you are seeking. You may need to talk with the City's urban planning staff and the City Council member representing your district to determine this. This should be one of our last steps, because you want to have all your facts straight and have an idea of your end goal when you talk to them. Even if you read the code very carefully, they may still provide you with unexpected info at that point, and you need to adapt.

Whether you decide to go for a rezoning or to sell the property as-is, this info will help you know where you stand.

If your property is surrounded by detached houses and there has been a big push to discourage higher-density development in the area, applying for a rezoning may be a waste of time, money, and effort. Be prepared that there is often a lot of unwritten policy in terms of how the code is actually interpreted and enforced. To avoid any nasty surprises, I would give serious thought to hiring a land use attorney who specializes in rezoning cases. The more research you can do and hand-off to them in a clear, organized, format, the more you can save on lawyer fees by decreasing their scope of work.

Again, every municipality is different, but the approval process for a rezoning typically involves an informal meeting with the City's staff, a formal application, and a few public meetings such as a neighborhood committee, a zoning review board, and the City Council meeting. The earlier you can get and respond to feedback, the better. For instance, it is usually good to schedule a non-required, informal meeting with the appropriate City Council member, way in advance of the public meetings. You want those public meetings to be mainly a formality. If you get rejected that late in the process, you have wasted a huge amount of time, effort, and probably money (not just fees but also in holding costs for the property).

Now, the GOOD news (finally, right?)...

It is pretty common to put a property under contract with the closing contingent on rezoning. Either you or the buyer could be the rezoning applicant. It really depends on the goals, preferences, and skills of both the buyer and the seller. Typically you agree in advance to a certain deadline for "the Rezoning Period," so you need to know the rezoning process, what application deadline you can realistically meet, the public meeting dates, etc., before writing the contract. For obvious reasons, you will be able to sell the property for a lot more once the zoning issue is resolved.

Good luck!

Dan

P.S. After rezoning approval, most cities have an appeal period, usually 1 month. During that time an angry neighbor or whoever can apply to overturn your hard-earned rezoning. You can include that time in your contract's Rezoning Period.

P.S. About the lawyer: get someone who handles zoning cases in Atlanta - preferably East Point! They will know the local code, the political players and hot buttons, and what you should push hard for vs. lay off of in negotiations.

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