The one-year anniversary of 2012’s Hurricane Sandy has just passed, which is a fitting occasion to think about how or if your business could be rebuilt after suffering complete or near destruction.

Hurricane Sandy, which caused $68 billion in property damage in addition to the loss of life, is one recent example of how storms cause major property damage.  Only Hurricane Katrina in 2005, which caused $81 billion in property damages, surpasses Sandy's damage toll.  This year’s tornado in Moore, Oklahoma caused more than $2 billion in property damages.

These damage amounts do not include the lost revenues of businesses that could not rebuild quickly, or at all, because of local zoning ordinances regulating the rebuilding of nonconforming uses and structures after near or total destruction.  It is not just major storms, either, that raise this issue: fires, earthquakes and routine requests to expand or remodel businesses raise the issue of compliance with zoning ordinance provisions regulating nonconforming uses or structures. Here are a few questions and issues to consider: 

What are zoning ordinance provisions that regulate nonconforming uses or structures?

Typically found in local zoning ordinances, and also called “grandfather clauses," these regulations are intended to allow buildings or uses that were legal when constructed to remain but, over time, require them to come into compliance with new zoning ordinance regulations. These regulations apply to everything from the use itself, to how a building and improvements are sited on the property, including building setbacks and height, parking and signage.

What triggers the application of these regulations?

An almost universal requirement of these regulations is that if a building is severely damaged or destroyed, which is referred to as “involuntary abandonment," it may not be rebuilt unless it complies with current zoning regulations. Variances from these provisions are often not allowed. So, after any destruction by a natural event or other disaster, or abandonment by the owner, the zoning ordinance may force reconstruction of a smaller building, or one with more or less parking, or with a lower sign height. 

These regulations also can be triggered if a business has been closed for a certain period of time and the use of the building is deemed to have been terminated, which is referred to as “voluntary abandonment," even if no changes to the building are proposed. The property owner may find that the prior use in the building cannot be reestablished at all because of the passage of time.

What can you do to prevent the loss of the right to rebuild or reopen a nonconforming use or structure?

Although the recommendations listed below will vary depending on the local zoning ordinance, here are some tips on making sure that you can rebuild your building or reopen your business after a disaster, or prevent the loss of a nonconforming-use right:

• Take pictures of the building, parking lot, landscaping and signage when they are first constructed.  Do this again whenever additions or improvements are added.  Dating the photos will help you establish what zoning ordinances were in effect on the dates the additions or improvements were established.
• Keep copies of the land use approvals and permits, building plans and relevant zoning ordinance provisions in effect when you constructed or remodeled your building, or started the use in an existing building.  One of the most common disputes in nonconforming-use issues is what the law required when the building or use was originally permitted. Having the applicable zoning ordinance provisions will help you make your case to the local building official.
• If a building is only partially damaged, do not tear it down completely until you know that action does not represent total abandonment of the nonconforming use/structure right. A recent New Jersey appellate decision held that partially destroyed homes that were gutted for reconstruction were deemed to have been completely destroyed.  As a result, the property owners lost their rights to rebuild those homes because the use was no longer allowed in the zoning district.
• If your business moves in to an existing building with an existing freestanding or building sign on the property, do not remove the sign; it may be a nonconforming height or size, and most jurisdictions allow the sign text to be changed without triggering these regulations.
• Keep your property information, whether in print, electronic or otherwise, in a secure storage facility off-site from the use itself. Having the only files in the location that is destroyed also destroys your evidence about why you should be permitted to rebuild. Do not count on the city or county having your records. Even if the records have not been lost or misfiled, they may have been destroyed in the same event.
• Keep track of changes to the zoning ordinance.  Changes to dimensional requirements, allowed or conditional uses, or a change to a different zoning district will change a conforming building or use into a nonconforming use or structure.  Most city and county websites show these changes and allow you to be notified when changes are proposed, so watch these changes and get on the notification list.  Make sure that the address that a city or county sends notices to is an address where someone will alert your company’s facilities manager to these kinds of changes.
• If your property is annexed from a county into a city, make sure that the newly applicable zoning regulations do not make your use or building a nonconforming use or structure.  If annexation is likely, then try to enter into an annexation agreement with the city to specify the allowed uses and dimensional requirements for your property. 
• Maintain copies of utility bills in order to establish that a use/structure has been in continuous use and has not been abandoned.