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What Your Small Business Needs to Know About Local Zoning Laws and Licensing Regulations

Aug 1 | 2022  by

Entrepreneurs, small business owners, and real estate investors often overlook the role that local governments play in business. Here are three fast tips on working with local government for your small business.

#1: Understand How Zoning Laws Apply

Before buying or leasing property for your business, you need to understand local land-use regulations, called Zoning. Local zoning laws are important because they can restrict where a business can be located. The time to understand zoning regulations is before you sign a lease or during a due diligence/inspection period before purchasing a property.

Example: Zoning laws may indicate that your business type is only allowed in certain zoning districts. Even commercial or business districts are often broken down further, so that higher intensity uses like used-car dealerships are separated from lower intensity uses, such as office buildings and residential neighborhoods. Even if you’re in the correct district, there are also dimensional requirements for the property that may require a certain size of lot or setback from the roadway or adjacent structures.

If you aren’t in the correct zoning district, then you might seek a “use variance” from the local zoning board of appeals, or you may seek to have the property re-zoned to the correct district. But these approvals are not automatic and can sometimes become hotly contested.

#2: Business Licensing and Inspections

Zoning regulates the use of land, but many communities also require a license to carry on certain business types. Even if your property is in the right zoning district, there may still be more steps to take.

Example: Many folks try breaking into real estate investing by flipping houses or maintaining rental properties. But did you know that some local communities regulate this practice?

For the house flippers, there may be home-sale inspection requirements and potential code fixes before the home can be listed for sale. For the landlords out there, other communities have rental inspection programs that require each property to be registered with the community and inspected periodically. There are plenty of other business types that also require “local listing.” These could be massage parlors, consignment shops, hotels, jewelers, tool and truck rentals, and even food trucks.

License requirements for certain business types may include background checks, proof of financial responsibility or insurance coverage, and, in some cases, even approval of the local police or fire chief. Again, it is best to be proactive in these situations rather than reactive. The time to find out if you need a license is before you make a significant commitment to a particular community.

#3: Signs

Many businesses are community-facing, which means they rely on customers or clients choosing to enter the business and use its services. Commercial signs are a great way to tell the public about your products, services, and overall brand. It shouldn’t be a surprise to learn that local government also regulates your business’s signage.

Example: Where can it be? What materials can be used? Can it have backlighting; or any lighting at all?

Depending on the size and style of the sign, they can cost hundreds or even thousands of dollars. Again, before making that investment, you’ll want to check your local sign code to ensure that the type and style of sign you want are allowed. Ultimately, you will most likely have to fill out an application for a signage permit. You’ll have to describe the location, size, and other features of your proposed sign. A local official will either approve or disapprove the request based on the sign code.

If your sign doesn’t meet the community’s specifications, it may be possible to appeal to the local zoning board or other public body for a sign variance.

Small Business Law Firm | Fausone & Grysko, PLC

First thing’s first, explore zoning, licensing, and signage issues before making any significant investment or financial commitment. Although local officials can be helpful in pointing you in the right direction, there’s no substitute for a skilled business and real estate attorney in your corner. If you need help navigating local government business and real estate issues, give Partner Brandon Grysko a call at (248) 380-0000.