What is a Merger Zoning Ordinance And Why Should Real Estate Professionals Be Aware Of Them?

While merger ordinances sometimes have different nuances, they typically provide that when an owner of an undeveloped nonconforming lot also owns an abutting lot, the nonconforming lot merges with the abutting lot, resulting in one larger lot that complies with the zoning regulations. Common ownership of both lots is typically required for a merger to occur. Merger may occur even if you obtained building permits years ago for the lot before it became legally nonconforming.

The reason why some towns and cities have added merger ordinances to their zoning regulations is that many municipalities are making an effort to eliminate nonconforming lots which are often undersized lots that do not meet the current zoning regulations. Municipalities in general do not like nonconforming lots. Therefore, any action that can be taken to eliminate such nonconforming lots is considered desirable by the town. Merger ordinances are a tool that towns use to eliminate such nonconforming lots, sometimes without an owner even knowing that a merger of lots has occurred.

Therefore, if you own, or are planning to purchase, two abutting lots where one of them is nonconforming, you should take certain precautions to safeguard against merger ordinances combining your lots and to protect your ability to build on each lot. For example, one precaution is creating separate LLCs to own each lot. The law will see the lots as owned by separate owners, even though you own both companies. This will provide protection against the merger of nonconforming lots.

As towns and cities are increasingly adding merger ordinances to their regulations, it is important to be proactive and take necessary precautions to protect your nonconforming lot and safeguard your ability to build on it.