Land Entitlement Definition

What are "Land Entitlements" in Real Estate?

A property becomes "entitled" after the owner or developer obtains all the necessary permits, approvals, and utility easements required for the intended use of the property. These entitlements effectively add value to the land, and they must be obtained before construction can begin. Most conventional financiers will require these approvals before advancing any funds for further construction and development.

Land Entitlements Explained

When land goes through the entitlement process, it is done in accordance with the subject property’s highest and best use in mind and in conjunction with the municipal zoning and planning department.

zoning entitlement process

Entitlement is a critical first step in the development of any large parcel of land, and it ultimately determines the permissible uses for the property and to what extent it can be developed. Depending on the local governing body and the professionals involved in the entitlement process (surveyors, attorneys, etc), entitling a property can be a slow, challenging, and complex, process.

When a property is entitled, the owner or developer effectively has an agreement with the governing municipality to determine how property will be developed, what will be constructed on the property (if anything), and how the land will be used in the future. When a property is unentitled, the owner or developer will not be able to proceed with their development plans and will likely face consequences if they do so without the blessing of the local governing body.

Entitlements determine many different things about how the subject property will be used, including the building type, number of buildings, the uses of each building, and the building setback requirements, among other things.

Land Entitlement Examples

There are many situations where entitlements could be required before the owner starts changing their property. Some examples of this are as follows:

Utility or Road Approvals: If basic utilities or road access are not already available to the subject property, the owner may need to obtain approval to get them. Oftentimes, a neighboring property owner may need to grant easement access so these features can be added to the subject property.

Landscaping: For some landscaping projects that involve extensive changes to the property (e.g. – adding a pond, waterfall or re-shaping the land), the local planning department may need to approve such a drastic change to the aesthetic of the property.

zoning entitlement landscaping

Zoning Changes: A property’s zoning determines what can and cannot be constructed on the property and what activities are acceptable. Zoning affects not just a single property, but usually an entire neighborhood. If a property is not currently zoned for the owner’s desired use, they can attempt to rezone the property, which is a form of entitlement.

Zoning Variances: In some cases, a property doesn’t necessarily need a zoning change, but the owner wants an exception to the established zoning laws, so they can alter the property in a smaller way. Some examples of this might be building outside of the established setbacks or height restrictions, changing the aesthetic of the building in a way that doesn’t conform to the pre-existing guidelines, adding parking spaces, or accessory buildings that aren’t currently allowed by the zoning restrictions.

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