Zoning

Next segment in our Leasing Series…Zoning.

In leasing commercial premises, Tenant’s need to pay particular attention to the zoning bylaw, and specifically how it applies to their proposed use. Often times, assumptions are made by Tenants that based on a commercial zoning designation on a site – that their particular use is permitted. After the fact, this erroneous assumption can be both costly and problematic to resolve. It should also be noted that generally landlords place the obligation of confirming the ‘Use As Permitted’ upon the Tenant, and the Lease Agreement speaks to this as a Tenant obligation.

But there are other factors to consider:

i) Does the existing bylaw allow for changes in the business?
ii) Does the bylaw speak to exactly the use by definition?
iii) If not, can you obtain written confirmation allowing the use (from the appropriate city/municipality)?
(iv) Is the bylaw marketable for purposes of sub-let/assignment?
(v) Does the Landlord need to approve any change-of-use (and the implications of that consent)?
(vi) Costs associated with obtaining a re-zoning to allow a use (application fees/ legal costs etc.)?

On the final point above, this assumes that the site does not allow for the use proposed. Although time frames will vary depending on your jurisdiction - rest assured that the process will involve months, not weeks - and the parties are going to face a delay in moving forward on the lease proposal. The other key point, is often times, uses are specifically not included within a zoning bylaw by design. Meaning the governing authority may infact not be interested in including that use within the list of those permitted.

Again, seek out experienced commercial realtors with strong leasing backgrounds, to assist you in the area of zoning compliance with respect to your use.