Zoning issue in Las Vegas, NV

[Alexander Parunin]

Hello Colleagues,

Before proceeding to any action, I would like to receive professional advise on zoning issue below:

I purchased property located at Las Vegas on July 2nd, 2015 as traditional sale through MLS. Property was listed and sold as SFR (Single Family Residency) home with no official documents reflecting otherwise. Furthermore, seller signed disclosure stating home as residential property.

On Tuesday Oct 13th, 2015 my residential designer and I went to Clark County Department of Development services to clarify some design features of the house. My designer had a list of questions with one of them especially concerning about zoning. A day before he found some controversial information on County website that house could belong to commercial zoning. Official confirmed his finding and showed documents stating that property is zoned to C-P (Commercial-Office & Professional). This information was verified and confirmed the same day by Department of Comprehensive planning (Land Use Planning).

Further investigation by official at Land Use Planning showed that house was converted to commercial zoning with request officially approved on July 3rd, 2012. Additional information showed that seller, who owned property since June 16th, 2011 presented plan approved for conversion of SFR to a 3 story office with parking.

Interestingly, neither broker nor title insurance didn't disclose commercial zoning information and facilitated closing transaction as SFR home. Note, that house is located in between two commercial parcels, but that was one of the selling points that I liked (no neighbors in the evenings, which is good for parties for example, not dogs etc). Obviously listing & selling brokers/agents never researched zoning since assessor website still showing "Land use" as SFR and even taxes had been paid as residential. Again, property is located between two commercial parcels, second from major street, there are six properties in one cluster: 2x3 (total 6) and only 2 of them currently zoned for residential & 4 commercial including mine.

Thus, I have a feeling that product was completely misrepresented and I wouldn't ever willfully buy commercial property. House has been vandalized in the past and in need of complete renovation. As stated above, I've owned it for over 3 months and experienced numerous losses due to fact that my residential renovation plans are not going be approved due to improper zoning. Plus I am paralyzed with indecision whether to change zoning back to SFR and complete the project.

I would appreciate if you could share more information on a few questions:

1) Whose responsibility to check zoning? What is possible resolution in this matter? 

2) If you know of law suites filed against dishonest sellers, who usually wins the suite?

3) Were brokers/agents supposed to verify zoning information?

4) What are the chances of rezoning back to residential, if any? Is it even worth trying?

5) Considering house is surrounded by 3 commercial properties is it worth trying to sell as commercial (C-P)?

[Daniel Chang]

Alexander,

If you are looking for "professional advice", you are in the wrong place.  BP forums does not constitute "professional advice".  Would recommend hiring a RE attorney for this.

The following is NOT professional advice:

1) It is generally the buyer's responsibility during their due diligence period to verify zoning.  The title company would not pick this up as zoning has nothing to do with chain of title.  

2) It comes down to what you can prove.  If the seller actually was the one that rezoned the property, then I think you have a very strong case of misrepresentation.  However, see my point below... 

3) If you read all your contracts, I'm sure somewhere in there is the language "buyer to verify all...".  Essentially this says the agent/broker will not be responsible.  

4) If what you say is correct, that the property is on busy street in between commercial properties, then I would say your chances are low for rezoning back to residential, seeing how they just approved a few yrs ago for commercial zoning.

I find this situation interesting and I'll follow this thread in case someone with more knowledge knows. I believe marketing and selling as a SFR is not fraudulent, as the building indeed is a SFR. It is a true statement. The use of the property as a SFR is usually grandfathered in due to the zoning changes. However it does limit any further development of the land for SFR if it's not zoned residential. So technically the property is not a commercial property...it just happens to be zoned for commercial.