Deed restrictions and zoning issues can significantly limit the use, development potential, and marketability of industrial land. These constraints are often legally binding and may be imposed by local authorities, past owners, or planning regulations. Identifying and understanding these restrictions is essential for any prospective buyer or developer. Below are five major types of such limitations that reduce use flexibility or value:
1. Restrictive Covenants in the Deed
- Legally recorded clauses that limit how the land can be used.
- May prohibit specific activities such as manufacturing, warehousing, or subletting.
- It could restrict the size, height, or type of structures allowed.
- Often intended to preserve uniformity or environmental standards in an industrial cluster.
- Violation can result in legal action or the nullification of rights.
2. Zoning Classification Limitations
- Land may be zoned for only specific categories like “light industrial” or “logistics.”
- Certain uses, such as heavy manufacturing or chemical processing, may be disallowed.
- Zoning codes may prevent mixed-use development or residential inclusion.
- Changing the zoning requires a formal and sometimes difficult approval process.
- Directly impacts resale value and the pool of potential buyers or tenants.
3. Floor Area Ratio (FAR) and Building Restrictions
- Local zoning laws may restrict buildable space through FAR limits.
- May also specify setbacks, maximum height, or lot coverage ratios.
- Affects the scale and type of facility that can be constructed on the land.
- Low FAR can make development financially unviable on premium land.
- Limits expansion potential or modular facility additions.
4. Easements and Public Access Requirements
- Legal provisions that require granting access to utility providers or adjoining parcels.
- May mandate maintaining a pathway or pipeline through the land.
- Public or service easements reduce the usable area and restrict construction in certain zones.
- Some easements may be permanent and non-negotiable.
- Could lead to reduced valuation or the need for redesigning site plans.
5. Overlay Zones and Special Planning Areas
- Land may fall under heritage zones, green buffer zones, or environmentally sensitive overlays.
- Such zones impose additional development rules beyond basic zoning.
- May require special permits, design standards, or impact assessments.
- Often includes restrictions on noise, emissions, traffic, and water usage.
- Compliance costs and delays discourage industrial investment and affect perceived value.
