"use Code" Vs. Zoning

[frank7]

I have not seen many of these differences on a title report.

This is in Riverside county, California

Property Type: Apartments
Use Code: Apartment house (5+ units)
Zoning: R3

It is zoned R3, but there are 4 units. Shouldn't the maximum allowedbe just 3?
But then the use code is for 5+ units.

What can I expect to see on an appraisal ?

 

[Sid Holderly]

Read the zoning code. what they mean in different Counties varies. In My home county R-3 just means multi-family, it could be 2 or more; R-4 is for a mobile home park. In the neighboring County to the east R-2 is multi-Family; in another, all multi-family is by special exception; in another County R-2, R-3, R-4 just refers to the size of the lot for any residential improvement. Most local counties have use tables where generic uses are listed down the left and zones across the top with permitted, special exception, not allowed. Many on-line GIS maps with zoning layers are roughly registered correctly over the lots, but not always current. Use Codes and Zoning codes often do ot align.

It comes down to - it takes more research.

 

[hastalavista]

Does the report indicate the current improvements are "legal" or "legal, non-conforming"?

Sid is 100% correct. Use code and zoning are many times two different things, and one cannot definitively state by the zoning-label (i.e., "R-3") what is allowed and what is not allowed. One has to look at the zoning ordinance.

Having said that, there should (but unfortunately, seldom is) a summary of the zoning and a summary of the highest & best use somewhere in the appraisal, that will address your concern (assuming the report you are looking at is completed to the "Appraisal Report" standard).
When I say "should", I don't mean that is my opinion. I mean it is in the USPAP (Advisory Opinion 11 provides clarification of what must be summarized).

 

[JTip]

Read the zoning code.

Exactly.

 

[nstanbru]

The Use code and the zoning code are different. What you should be concerned with is the zoning code. You can do this on line. Go to the City website (or County website if your property is in an unincorporated area). Then pull up the zoning map and get your zoning code. Then you can look up that particular code and get the density allowance, lot size requirements, parking, set backs, etc.

 

[frank7]

I guess what I specifically wanted to ask is will the lender look at the zoning or the use code to determine financing?
I believe they only look at how it is zoned.
So, an R3 could be residential Multi-family, or 3 units, 4 units, 5 units..and so on.
If it is zoned commercial for 5+ units, there's no way a bank offering only 1-4 unit home loans will finance this property

 

[hastalavista]

I guess what I specifically wanted to ask is will the lender look at the zoning or the use code to determine financing?

The lender would normally look at the appraisal to see what it says; if there is confusion or if they think there is a contradiction between the appraisal and other sources, they will typically ask the appraisal to reconfirm.

I believe they only look at how it is zoned.

That is what they should be looking at.

So, an R3 could be residential Multi-family, or 3 units, 4 units, 5 units..and so on.

It could mean all of those things. And, as I mentioned, your property may not be in compliance with the zoning but be considered "legal, non-conforming"... typically because it existed prior to the current zoning standards.

If it is zoned commercial for 5+ units, there's no way a bank offering only 1-4 unit home loans will finance this property

If zoned for 5+ units, the improvements would likely be grandfathered; who is going to build 4 units when they are allowed 5? (The chances that 4 units are more financially productive than 5 units are low).

I'll ask again: Does the report summarize what the zoning allows? Does the report indicate that the present use is legal and conforming, legal and non-conforming, or illegal? Is the highest and best use of the property as-is (4 units)?

 

[Thomas Fiehler]

Just had a similar situation here in Ohio. I had to explain to the Realtor that the use code applies to the improvements but the zoning applies to the site. I don't think she ever got the difference.

 

[Meandering]

I have not seen many of these differences on a title report.

This is in Riverside county, California

Property Type: Apartments
Use Code: Apartment house (5+ units)
Zoning: R3

It is zoned R3, but there are 4 units. Shouldn't the maximum allowedbe just 3?
But then the use code is for 5+ units.

What can I expect to see on an appraisal ?

The OP is in Florida, reading appraisals from California and is a sales agent/broker.

So,
Frank7,
how did this come to be?
Are you buying property in California?
If so, you can call the municipality there and ask them the specifics of the zoning code.

.

 

[frank7]

The OP is in Florida, reading appraisals from California and is a sales agent/broker.

So,
Frank7,
how did this come to be?
Are you buying property in California?
If so, you can call the municipality there and ask them the specifics of the zoning code.

.

I am licensed in both states for Real estate sales and mortgage. Nice investigative work on the new guy.

Ask them the specifics of R3 zoning and why the use code differs? They are all attached units, 4 total.

Highest and best use and easier to finance in this inland area is a 4-unit vs. a 5 unit. If it was near the coast, then I'd say 5 unit is best due to density and demand.

Legal conforming and Legal non-conforming brings me back to my CE class days.