Lead Article
GET IN THE
ZONING COMPLIANCE IS AN INCREASINGLY IMPORTANT
CONCERN FOR COMMERCIAL MORTGAGES
seniorzoninganalyst,Zoning-Info Inc.
Illustration: Keith Negley
By Cassie Phelps,
property might seem perfect on paper. But there is one issue that brokers, borrow-
ers and lenders often overlook when analyzing a property on a commercial deal:
zoning compliance.
Not only does zoning compliance worry property-owners, but it also is a concern for
mortgage brokers and lenders. Regardless of their age, properties must conform to
local zoning regulations. Further, local jurisdictions may amend their zoning ordi-
nances, causing once-compliant properties to fall out of compliance.
As lending guidelines grow stricter with the troubled economy, zoning compliance is
becoming another important issue for commercial lenders. Unresolved zoning issues
often can push back closings; lead to insufficient title coverage, decreased value of
assets and higher costs; or result in the denial of funding. Brokers who understand
zoning compliance and help their clients achieve it can help substantially minimize
these risks for their clients’ projects. Here’s where to start.
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