The Dollars are within the Particulars: What You Must Know About Land Use Due Diligence in Florida

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One of many hardest discussions a land use lawyer can have with a potential consumer is telling them they can’t use the property they closed on “as is” for his or her desired use. Typically, a plan will be crafted to resurrect the investor’s money move targets. However typically, too many uninformed and costly selections have already been made.

A small expenditure for land use due diligence and evaluation throughout an outlined interval within the contract, with native authorities approval contingencies to closing, can assist guarantee profitable money move.

What ought to this due diligence embrace?

The Future Land Use Map and Complete Plan

State statute requires each native authorities in Florida to undertake a “Complete Plan,” full with a “Future Land Use Map” detailing what “Future Land Use Class” applies to a parcel or space. Every plan should embrace at the least two planning durations, one which covers at the least the primary five-year interval after the plan’s adoption and one which covers at the least a 10-year interval. Extra planning durations for particular parts, parts and land use amendments to the plan are allowed as a part of the planning course of.

For due diligence functions, the Future Land Use Class is arguably an important facet of the plan. Future Land Use Classes set forth:

An inventory of targets and basic makes use of
The allowed residential density
The business or combined use allowable Flooring Space Ratio (FAR)

FAR is the measurement of a constructing’s flooring space in relation to the dimensions of the parcel the constructing is situated on. It’s expressed numerically and is derived by dividing the full space of the constructing by the full space of the parcel (constructing space ÷ lot space). If the Future Land Use Class permits a FAR of 1.5 on a 100,000-square-foot business parcel, 150,000 sq. toes of usable sq. footage could also be constructed. That is topic to native parking necessities, impervious floor limitations, landscaping necessities, visitors, and many others. FAR could also be elevated by bonus incentives set forth within the language of the Future Land Use Class or different components of the plan that encourage enhancements and neighborhood facilities within the improvement.

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With regard to residential density, a Future Land Use Class could enable as much as so many residential dwelling models per acre, whether or not they be single or multi-family in nature. Residential density is often topic to lots of the similar limitations as business FAR. It might typically be augmented via bonuses much like these permitting for extra dwelling models per acre.

Nonetheless, if a parcel is bought with a Future Land Use Class that doesn’t enable for the supposed use, it can require a number of months of evaluation by native authorities workers and an approval vote by the native governing physique. If the parcel is bigger than 10 acres, the appliance should be submitted to the state for evaluation. Upon receipt of a remark letter from the State Land Planning Company, the native governing physique has 180 days to undertake, undertake with adjustments or decline to undertake the modification. The adopted modification is then submitted to the state and regional evaluation businesses for last feedback. It can not take impact till 31 days after adoption.

Zoning

If the parcel carries the correct Future Land Use Class, the subsequent step is to verify the correct zoning for its supposed use. Each metropolis and county in Florida is required by statute to have its personal land improvement code.

Thus, a class labeled “Basic Industrial” can imply 67 various things within the 67 counties, in addition to the numerous tons of of included municipalities throughout the state. Conversely, classes labeled generically as “Mild Industrial” or “Heavy Industrial” can carry comparable variations throughout the state, and in lots of circumstances prohibit much less intense makes use of that one may assume can be allowed.

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Cities and counties will typically require a deliberate improvement (PD) rezoning if parcels are so codependent or advanced that zoning approval will depend on a replat and is ruled by a closely detailed and engineered web site plan. This may be costly to find after a rushed closing. If a jurisdiction goes to require a PD, it’s higher to know that going right into a deal and construction proceedings accordingly.

How can contracts enable you carry out due diligence?

The right strategy to receive land for particular improvement is by way of a contingent sale contract. This type of contract offers a beneficiant examine interval (resembling 60 days) for correct due diligence. Then, ought to the transaction proceed, a part of the deposit is utilized in change for one more time interval (typically as much as six months or a yr) to use for and procure the entitlements and allow approvals wanted to make use of the property for the client’s supposed use.

These contracts are advanced. They have to mesh properly with the method outlined within the land improvement code of the jurisdiction by which the parcel is situated. Type agreements such because the FAR/BAR and Realtor Affiliation contracts are a poor match for such transactions.

So what must you remember earlier than shopping for property for a sure use?

There are a lot of different components that have an effect on the obtainable or approvable makes use of of a property, like:

Property tax classifications
Water use permits
Wetland delineation
Visitors impacts and the presence of enough street capability
Potential affect charges for brand new development
Intense makes use of
The current and future availability of utilities (together with water and sewer)

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However cautious and correct due diligence evaluation of a property’s land use, together with the great plan and zoning, coupled with a purchase order and sale settlement drafted for the client’s particular necessities, could make a giant distinction within the success or failure of the funding.

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