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Commercial Rezoning Violates Covenants

by Ann

Visitor Question: I live in a residential subdivision in Tennessee. Recently, the road to the subdivision was widened to 5 lanes and the land immediately bordering the road was re-zoned for commercial use. That land includes the first two houses in our subdivision. (There is only one entry point into the subdivision. The two houses are the first on the left and the first one on the right as one enters the subdivision.)

Our HOA covenants are effective, have not expired, and restrict using the homes for any commercial use.

We have written a letter to the zoning board stating that we would like to have the two houses again zoned for residential only. The zoning board (laughed) declined.

The homeowners of the two houses see money and do not want their homes re-zoned back to residential.

Any idea on what our chances would be on winning a court case to have the houses only used as residential per the HOA covenants?

Editors Reply: Keep in mind that we are planners and not lawyers, so our answers are necessarily general and not legal advice. The short answer to your question would be that your chances of winning such a lawsuit might be reasonable. We have to say "might" because we do not know a key piece of information, which is whether the zoning ordinance permits residences in commercial zoning districts. Many older zoning ordinances are what is known as cumulative, meaning that a land use permitted in a less intense district (residential homes in a residential district in this case) also are permitted in more intense districts, such as commercial. If residences are legal uses in commercial zoning districts, then our usual general advice, which is that both zoning and deed restrictions must be followed, will prevail.

In the event that zoning and covenants are in direct conflict with one another, because the houses are now non-conforming uses that must be discontinued upon sale, a judge must decide which requirement will prevail. Here you would be on shakier ground because a judge is likely to find these facts to be sympathetic to the two homeowners who own the commercially zoned houses:

1. Zoning is determined by the public sector, and there is a legal doctrine called presumption of validity that awards a high degree of credibility to decisions made by a public body, in this case your zoning board and/or city council, whichever is the final authority. This might trump deed restrictions in the mind of the judge.
2. The five-lane road commonly is considered in America as an appropriate place to be lined with commercial land uses. You could argue the appropriateness, but that would be well beyond the scope of your case otherwise and probably would lead to the need to pay expert witnesses and attorneys specializing in the frontiers of land use law. Trust us, it is not worth it.
3. A local judge might even give some weight to the preference of the homeowners, who are not objecting to commercial zoning and in fact are embracing it for monetary gain.

Another complicating factor is that at the local level, a judge who is not an expert in real estate and land use law may even consider the increase in property value resulting from commercial zoning as a factor that should tilt the decision toward the rezoned commercial designation.

All in all, while you might have law on your side if the homes did not become non-conforming to the zoning ordinance when they were rezoned (which is another way of saying that residences are permitted uses in commercial zoning), we are not sure that you would win without an appeal or two. So you have to ask yourselves how much it matters, and why it matters.

In other words, if those two homes actually became commercial enterprises, what harm would come to the rest of you as homeowners? The answer to that question would be a reasonable place to start in deliberating about how much to worry about this.

For example, if the lots are shallow, say less than 150 feet deep after the acquisition of any road right-of-way that the street widening caused, that will mean that a typical commercial use will need to build as close to residents' back yards as possible. Most types of businesses need at least a 150 foot depth.

Are you concerned about some of the specific commercial uses that are permitted under the commercial zoning that was assigned to these lots? If so, which ones, and what negative impacts would you expect that they bring to your neighborhood? Sometimes when you step back from just the idea of commercial zoning to look at specific negative impacts, you will find that nothing particularly terrible will happen if the current zoning stays in place and someone eventually takes advantage of it. At other times, the range of specific commercial uses is virtually unlimited or contains some noise-generating or peak time traffic-generating uses that would be especially obnoxious next to neighbors' back yards.

Only you folks can decide how much you want to fight against what we see as an injustice caused by your local officials. You are the ones who can determine how much time and money to spend on this issue.

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