How do zoning laws affect commercial real estate in Chicago?

The complexities of most commercial real estate transactions can be overwhelming for anyone going into them unprepared. A broad spectrum of issues must be anticipated and addressed during the preliminary stages leading up to the contract negotiation in order to avoid costly and, potentially deal-killing, mistakes.

One troublesome area for individuals trying to become owners of commercial real estate is the impact that zoning laws and real estate land use restrictions may have on a particular property. For example, if you are purchasing a building in which to run your business, you might assume that because the previous owner of the building conducting the same type of business for many years that your business will also be allowed. Unfortunately, if the prior owner had been granted a non-conforming use by the city, that granting of permission may not automatically transfer over to you.

Cities, such as Chicago, use zoning laws to regulate growth and maintain orderly development of real estate within its jurisdiction. One of the most important functions of zoning laws is to create areas in which the different forms of land use may occur without infringing upon the health or safety of other property owners.

This is accomplished by designating certain areas for single-family and multifamily residential use. Such areas would be separate from commercial real estate use for activities such as retail stores or office space. Factories, warehouses and other industrial activities are limited to their own zoning category as are agricultural uses and recreational activities.

Going into the real estate market without knowing the restrictions local zoning laws will place upon your use of the property you wish to purchase can be a costly mistake. This post is a brief overview of a very complex area of the law. It is not intended as legal advice on the subject of zoning laws and commercial real estate. If you need legal advice and information about how real estate land use might affect you or your real estate transaction, you should speak to a Chicago business and commercial law attorney.

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