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Zoning issues and their impact on your commercial space

3-minute read

Before purchasing or leasing commercial real estate, ensure that the property is zoned appropriately for your business’s needs. Commercial and industrial zoning restrictions can be stringent, so it’s important to know what is and isn’t permitted at the new premises.

Each province and municipality has its own rules, regulations and zoning bylaws. These bylaws govern how land may be used, where buildings and other structures can be located, and the types of buildings that are permitted and how they may be used. Municipal bylaws also cover factors such as lot sizes and dimensions, parking requirements, building heights, and setbacks (the minimum distance a building can be located from a property line).

Dan LaBossière, Assistant Vice President, Business Development at BDC, recommends hiring a lawyer to do appropriate research so you can be sure your business doesn’t run afoul of any zoning bylaws. “Choose a lawyer with commercial property experience,” he says. To determine what zoning bylaws apply to the property you want to purchase, your lawyer will go to the source: the municipal planning or zoning authority, which will provide the most up-to-date zoning bylaws for the location you are considering buying.

Protect yourself

Depending on your planned use of the property or building, answers to the following questions will help ensure your business complies with existing bylaws.

  • If you plan to change the use of the property, is that new use permitted in that location?
  • Do all the changes that have been made at your new location comply with that area’s bylaws, such as building height restrictions?
  • What is the permitted setback from the street? Does the building conform?
  • What sizes of signs are permitted and how should signs be placed?
  • Are there sufficient parking spaces and, if not, do existing bylaws allow for more parking spaces?
  • Have there been any previous disputes regarding zoning at this location, such as parking issues?

When it comes to zoning for commercial property, pay close attention to the following issues.

Heritage buildings

Properties classified as heritage will have more restrictions than others. Guidelines exist regarding which character-defining elements should be preserved and which can be changed. “When you buy a heritage building, there are limitations on the alterations you can make, and improvement costs are often higher,” says LaBossière. “It can be a huge undertaking that involves a lot of back and forth with municipal authorities on what changes are permitted.”

Certificate of survey

Make sure you have an up-to-date certificate of survey. LaBossière gives the example of an entrepreneur who purchased a property and had an updated survey done when he decided to upgrade. At that point, he discovered a permit for one of the buildings on the property had never been obtained, and he was required to dismantle that building.

Changes to existing bylaws

Zoning bylaws change over time. Just because the previous occupant used a property for a specific purpose does not mean you will be permitted to do the same. While a business that was established before a zoning change took place may have obtained a variance that permitted it to continue its activities, that right may not apply to future businesses that move into that location.

Building permits

If you want to purchase a property on which you plan to build, you will need to apply for a building permit and ensure your plans comply with applicable bylaws. Rules can vary greatly, depending on whether you’re building new premises, altering existing premises, changing the appearance of a building or altering its use. Before starting, check with your municipality to see what you’re allowed to do with and without a permit.

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