Real Property Laws

Common Building Categories and Zoning

Buildings may take many forms, including houses, offices, apartment complexes, and factories.

Buildings in real property include houses, offices, apartment complexes, and factories. Generally, office buildings can be categorized into urban (located within the city) and suburban (located on the outskirts of a city). Office buildings can be multitenanted, with office space rented to multiple organizations, or single-tenanted, with the building leased by only one person or company. Buildings most often fall into tiers or levels, known as Class A, B, and C. Class A tiers are the highest-quality buildings in their market, with premier office space and rents. Class B buildings typically have the largest number of tenants because of their average price range and good locations. Class C buildings have fewer amenities (desirable or useful features) and may be older or in poor condition. They have the lowest rents. Class C is the lowest classification of office buildings, and these buildings are typically older and in need of renovation or repair, with some technological challenges. Building codes are in effect for any business or individual looking to rent out space; however, meeting a minimum building code requirement does not necessarily make it the most desirable building.

Retail buildings include restaurants, strip malls, and retailers. Some single-tenanted buildings include "big box" stores—large retail establishments that are usually a chain, such as Target and Walmart—or smaller buildings, such as a drugstore or a bank.

Industrial parks often house groups of buildings, including heavy manufacturing, light assembly, and bulk warehouses. Flex industrial space includes warehouse space and office or showroom space. Tenants can expand and contract the different spaces within the building as needed. An example of a flex industrial space is a rented warehouse space that does not include air conditioning or individual office space. The lessee could then flex by enclosing smaller air-conditioned office spaces within the warehouse space. Often industrial buildings are called flex because they come with partitioned spaces or offices.

Hotels, which are commercial properties, include resorts, boutiques, full-service hotels, extended stay hotels, and even casinos.

One of the most common and popular forms of buildings in real property is multifamily residential. This designation covers all types of residential and real property other than single-family, including apartments, condominiums, and townhomes. These are usually Class A, B, and C, like office buildings. They include high-rise, mid-rise, walk-up, and manufactured housing communities.

Special purpose real property does not necessarily fit into the categories named above. It includes churches, amusement parks, and recreation centers. Some special purpose properties are nonprofit and may be exempt from real estate taxes.

Regardless of the category the buildings fall into, they are real property and have special zoning restrictions. Zoning laws become important as investors and commercial property owners plan for growth.

Zoning is a legal process that is used to regulate the use and development of real estate. Zoning is considered a land-use regulatory tool, used by local and state governments to control and guide the development of property. Typically, cities or municipalities establish a zoning board to help navigate the regulations required of that particular city or municipality. The basic function of the zoning board is to divide the municipality into residential, industrial, and commercial zones that are part of a master plan for the municipality in its overall planning and use of real estate. Items covered within zoning are sizes of buildings, utility line placement, building setbacks and other boundary requirements and restrictions, and other relevant information in accordance with the master plan. Placement of schools and sidewalks is another important function of zoning. Zoning boards also consider historical districts and the required maintenance and preservation of such within the municipality.

Building Types

The typical forms of buildings in real property range from small single-family homes to enormous warehouses.