REALWorld Law

Sale and purchase

Planning/zoning issues

How can a buyer ascertain the permitted uses of a parcel of real estate under the applicable zoning or planning law in this country?

Angola

Angola

The zoning and planning laws and regulations for each local region are available to the public and copies of the regulations and local decisions can be obtained. Additionally, all documents related to a parcel of real estate must be analysed during the due-diligence process.

Australia

Australia

Proper due diligence enquiries include investigations as to the lawfulness of the present and/or proposed use of the property from a town planning perspective. This usually involves a two or three pronged approach:

  • A review of the relevant town planning scheme and relevant planning instruments
  • Obtaining a town planning certificate from the local authority (which provides details of applicable provisions of the town planning scheme, details of development approvals, conditions and commentary on the degree of compliance with conditions of relevant approvals), and
  • In some circumstances, engaging qualified town planners for specialist advice

Usually, sellers make no warranty or representation as to the lawfulness of current use in land sale contracts.

Where a buyer wishes to change the use to a use not currently approved from a town planning perspective (and does not wish to assume the risk of securing approvals after acquiring the land), then the buyer may wish to make the contract conditional upon appropriate development approvals being obtained before completion.

Belgium

Belgium

Depending on the region, different zoning and planning regulations apply and different categories of regulation have been adopted. Zoning regulations and requirements can be consulted by any interested person since they are 'public information'. Uses can only be changed by the regional authority.

Bosnia-Herzegovina

Bosnia-Herzegovina

When planning a construction project, the builder must submit a request to the relevant authorities to obtain an urban planning consent and a construction permit. The authorities will issue permits only when the proposed construction project is in accordance with the laws on spatial planning and the decisions on zoning.

Under the law of the Republika Srpska, before obtaining a construction permit for building on urban building land, an investor must pay the fee for the arrangement of the construction site and rent to the authorities of Republic Srpska.

Uses can be changed by an amendment to the zoning plan but this can only be done by law or by a decision of the relevant authority.

Canada

Canada

Proper due diligence enquiries include investigations as to the lawfulness of the present and/or proposed use of the property from a planning/zoning prospective.

This aspect of due diligence will typically involve review of the relevant municipal zoning by-law or development plan and communication between the buyer and the relevant local authority regarding the current degree of compliance with zoning, permits, fire or health safety measures. In some circumstances, buyers will engage specific consultants to deal with planning/zoning.

Where a buyer wishes to change the use to a use not currently approved from a zoning/planning perspective (and does not wish to assume the risk of securing approvals after acquiring the land), then the buyer may wish to make the contract conditional upon appropriate development approvals being obtained before completion.

China

China

A buyer can ascertain the permitted uses of a parcel of real estate through inspecting the relevant land grant contract and reviewing the relevant town planning scheme and relevant planning instruments.

Croatia

Croatia

Urban plans determine the structure and use of specific areas, and provide regulations for the protection and development of the country, counties, municipalities and cities. Urban planning documents include:

  • The Planning Strategy and the Planning Programme for the Republic of Croatia
  • Urban plans, including:
    • Plans for the County and the City of Zagreb
    • For areas of special interest
    • Municipal and city plans, and
    • An urban zoning plan
Czech Republic

Czech Republic

The Zoning Plan, together with the local technical rules, gives an overview of the possible uses of specific areas.

Local authorities will issue a confirmation of the possible uses of a plot of land on receipt of a written request from the owner.

Denmark

Denmark

Applicable planning regulations are often registered as burdens in the land register in relation to affected properties. Municipalities can change the planning regulations, but a change in local planning regulations will only apply to future decisions within a specific area.

Local and municipal plans are usually also available online at the homepage of the municipality in question.

France

France

The zoning and planning laws and regulations for each local region are available to the public and copies of the regulations and local decisions can be obtained for a nominal cost.

Zoning and planning regulations must be checked before planning a construction project and applying for a building permit.

An operational planning certificate (certificat d'urbanisme opérationnel) which lists some of the regulations and local decisions applicable to the parcel of real estate and freezes them for 18 months can be useful.

Germany

Germany

Public authorities establish zoning plans designating the permitted use of an area. Uses can be changed, but there is protection for existing buildings, so that if a use has been permitted in the past it remains permitted, even if the zoning plan has changed since then.

Building and zoning plans are accessible to the public and the building authority can provide the relevant information.

As regards the building permit, the buyer can ask the seller to provide a copy in the course of due diligence.

Hong Kong, SAR

Hong Kong, SAR

The purchaser can check the government lease related to the parcel of real estate to check the permitted user of the land. An occupation permit is required for any construction on land and it includes information on the authorized use of the building. If a purchaser is planning to change the use of the real estate beyond the permitted uses, it will need to seek approval from the Building Authority. The purchaser should also check the Outline Zoning Plan (or Development Permission Area Plan for land in the New Territories those parts of Hong Kong other than Hong Kong Island and Kowloon) for any restriction on intended users and to apply for planning permission if needed. It has been held that when there are contradictions between government leases and Outline Zoning Plans, compliance with either one is not sufficient since the government and the Town Planning Board are independent entities. Therefore, a cautious purchaser should seek for permission if there are any contradictions.

Hungary

Hungary

The local development plan and local building code describe the uses allowed in different areas of a city in a very detailed manner, specifying building heights, maximum floor-space ratios, minimum landscaped areas, etc. Any change to the zoning of property requires an amendment of the applicable local development plan.

Ireland

Ireland

A buyer can carry out a planning search to find out the zoning and planning permissions affecting the land.

Italy

Italy

The General Master Plan and Town Planning rules, as well as local laws, provide a description of the permitted uses in different areas of a city. In order to determine the permitted use of a property, a town planning designation certificate (certificato di destinazione urbanistica) can be requested from the municipality.

Japan

Japan

Information about the permitted use of particular lands can be obtained from the local government.

Regarding construction compliance, the buyer typically is provided with a ‘Building Inspection Certificate’ from the seller, which is the legal document certifying that the building meets all requirements under the Building Standards Act. With this document, the buyer can confirm that the building was constructed in compliance with the Act.

Netherlands

Netherlands

The buyer should investigate the applicable zoning law decisions, primarily the applicable municipal zoning plan, via a publically available database. Use can be changed through an exemption (vrijstelling) procedure.

Nigeria

Nigeria

The permitted uses or purposes for a land or property are usually indicated in the title deeds that are lands certificates or grants directly from the state. Usually the land certificates indicate whether it is granted for ‘residential’, ‘commercial’ or even ‘mixed development’. The lands certificates may sometimes be more specific on the nature of the business to be carried out and building development permitted on the real estate.

It is also prudent for a buyer to apply to the relevant state physical and town planning office for ‘Planning Information’ as to ascertain the land use and zoning for the area where the property is located and the permissible use.

Norway

Norway

The development plan provides a description of the permitted use in different areas of a municipality. Local authorities may make further specifications in the plan. Any interested party can contact the local authority to get access to the development plan.

Poland

Poland

The designation of real estate and its use appears in the local zoning and development plans. The local zoning and development plans are accessible to the public at the real property department of the city council. Anyone can view the plan and obtain confirmation of the designation of particular real estate in the local zoning and development plan.

The permitted uses may be changed within the scope of the relevant zoning and development plan. Local zoning and development plans can be amended by the municipality within the scope of the “zoning studies”. These documents set out the main features of local development policies. A property owner may submit an application to amend the zoning plan but the municipality is not obliged to make the change.

Since a number of municipalities in Poland have no valid zoning plans investors may apply to the authority for the grant of a zoning decision (WZ). This will define the permitted development and use of the real estate.

Portugal

Portugal

Buyers should check the relevant territorial planning laws and relevant licenses, in order to confirm that all legal conditions are met for the development of a real estate project.

Romania

Romania

The town planning certificate and construction documentation lay down the construction parameters applicable to specific areas. In the planning documentation, the general, zoning and detailed planning certificates are most important. These documents are issued by the local authorities at the request of any interested person and set out the rules and conditions under which developments may be built in a particular area.

Obtaining the relevant town planning certificates is necessary in order to apply for the issue of the building permit which in turn provides for the rules and parameters that must be followed and observed when planning and executing the construction works.

Slovak Republic

Slovak Republic

The zoning plan provides a reliable source of information regarding the classification of zones and plots of land. Uses can be changed by making amendments to the zoning plan.

Under Slovak law, before constructing a building, a zoning decision must be issued classifying land as an area where development is permitted.

Subsequently, a construction permit must also be granted for each specific building proposed.

A potential buyer, investor or developer may request zoning information from the city office confirming the zoning use of the area in question.

It is to be noted that a building permit can be applied for only once a zoning decision has been made.

Spain

Spain

The uses allowed in different areas of a city are set out in a municipal zoning ordinance (plan general de ordenación urbana) and/or in a specific area zoning ordinance (plan parcial de ordenación).

The town hall of the municipality where the property is located can supply a 'use designation certificate' (cédula urbanística) showing the permitted uses of a property. These can be changed by revisions to planning policy.

Sweden

Sweden

According to the Planning and Building Act (Plan-och Bygglagen), a zoning plan may be modified or annulled. However, if the owner opposes this, the zoning plan can only be modified or annulled where there are new circumstances of great significance to the community, which could not have been anticipated when it was originally adopted, and which cannot be accommodated in any other way. The owner is also entitled to full compensation for any damages if the municipality decides to modify or annul the zoning plan.

Thailand

Thailand

The buyer should confirm with the relevant official of the Department of Public Work and Town and Country Planning and review the relevant Town Plan to which the land or real estate is subject as to whether the buyer’s intended use of a parcel of land or real estate is a permissible use in accordance with the relevant Town Plan. Please note that a landowner may only use its land to the extent that the use is not prohibited in the zone to which the land belongs. Additionally, the local authority will consider whether the landowner's intended use of the land is permissible under the relevant Town Plan before issuing a construction permit.

United Arab Emirates - Abu Dhabi

United Arab Emirates - Abu Dhabi

The permitted use should be noted on the title.

United Arab Emirates - Dubai

United Arab Emirates - Dubai

Dubai Municipality is responsible for zoning in the Emirate of Dubai. For each plot of land, Dubai Municipality will issue an 'affection plan' which shows the land and states the permitted use of it (for example, industrial or hotel). Any application for a change of use must be approved by Dubai Municipality in advance.

UK - England and Wales UK - England and Wales

UK - England and Wales

When a seller demonstrates its title to a buyer they should also provide information on the site's planning history and show how the existing use is authorised. If a buyer is planning to change the use of the property they will need to consider the local plan, setting out the local authority's policies for each area. Receiving consent to a change of use can be made a condition of the purchase contract, although the application process can take some time.

A buyer will typically also raise specific enquiries with the local authority about the planning history of a property but a fee will be payable.

UK - Scotland

UK - Scotland

As part of the pre-contract due diligence, a seller will show the buyer a local authority property enquiry certificate. This discloses the current planning/zoning status of the property and gives brief details of any planning consents issued.

The seller may also be required to provide a planning history of the site and copies of all planning consents issued. If the buyer is planning to change the use of the property, they will need to consider the local plan which sets out the local authority's policies for each area. Receiving consent to a change of use can be made a condition of the purchase contract.

Ukraine

Ukraine

Planning documentation kept by local authorities, as well as documentation pertaining to each particular property, should be verified. These include, in particular, the master plan, the detailed plan of the locality, zoning plan, title documents etc. The zoning of land can be checked in the State Land Cadastre and title documents.

Generally, the use of land can be changed, but there are some categories of land where a change of use is not permitted or where this involves a complex procedure, requiring approval from the Cabinet of Ministers of Ukraine or the Parliament of Ukraine.

From 1 January 2015 (with amendments of 1 March 2018), the following restrictions apply in relation to zoning issues:

  • where no zoning plan or no detailed plan of the locality is in place for the settlement, the state and municipal authorities can transfer public plots of land into the ownership of private persons or leasing it to them for construction purposes only in some cases (eg when the building of such private person is located on such land plots, when land plot is transferring for the purpose of the construction of linear objects of transport and energy infrastructure); and
  • a change in the designated use of the plot of land, which is in conflict with the zoning plan and/or the detailed plan of the locality is prohibited.
United States

United States

Typically, the seller will deliver a copy of the certificate of occupancy confirming the permitted use or the title insurer or another consultant will obtain a copy of the certificate from the municipality. In some localities, certificates of occupancy are not issued or additional investigation as to permitted uses may be required and, in such cases, a zoning report should be obtained or other appropriate investigation completed to confirm the permitted use. In addition, if the buyer is planning to change the use or to perform construction at the property, further investigation of the zoning regime applicable to the property should be undertaken as part of due diligence investigations.

Zimbabwe

Zimbabwe

Where the seller is not in possession of the required information already, the buyer may approach the city council to ascertain this information. They may also approach the Environmental Management Agency (EMA) which regulates environmental issues and concerns.