A nonconforming structure variance in real estate is a special case. Towns grant these when an owner made improvements before current zoning laws. Later, the new laws changed, and the building no longer conformed.

  • A nonconforming use structure met all the zoning laws when it was built but does not conform now 
  • You can buy a property with a nonconforming structure, but make sure you get all the proper variances before you close the transaction 
  • Not all banks will finance such properties, and lenders who do loan money will charge a higher interest rate 

Your township may not grant a variance for a nonconforming structure. Their decision usually involves several factors, such as cost to remediate. If your town does grant the variance it almost always runs with the land, so the next seller won’t have the hardship or remediating the problem.

What Does Nonconforming Structure Mean?  

The township originally permitted the nonconforming structure, but later changed the laws. Originally, the land and improvements conformed to zoning laws, but over time the laws changed. Therefore, the property became nonconforming.  

This happens a lot, especially with commercial and industrial sites. However, it also happens regularly with residential houses as well. Therefore, you should always get a home inspection, and it is a good idea to get a survey, as well.1  

Nonconforming Structure Example 

Zoning laws affect many aspects of your property. You may not think of compliance when you buy a new hot water heater, washer and/or dryer, furnace, or air conditioner; but in most areas, they are subject to zoning laws. You must get permits to install them in your home. Likewise, when you add to or modify your home you most likely will need to deal with zoning laws and permits. These laws may change over time and create situations of nonconforming use

Example 1

A good example of a nonconforming use where the local government will probably grant a variance is the case of an inground pool.  In this instance, an owner installs an inground pool according to all the local laws and gets all the appropriate permits.  The homeowner enjoys the pool for many summers but eventually wants to retire and move. When they sell the house, they learn that the setback requirements in the zoning laws changed, and the pool no longer complies.  

In this example the owner should apply for a variance, and the town will probably grant it. This is because the owner originally complied with zoning laws, and it will be very difficult and expensive to either remove or move the pool.  

Example 2

The town may not always grant a variance, though. I have a personal example of this. When I bought my house, the seller learned that the chimney no longer complied with building codes. He applied for a variance, but the township denied his request. They denied it because they believe the existing chimney was a fire hazard and it was relatively easy to fix.  

You can find many examples of nonconforming uses, because local governments change zoning laws. Most of the time there is a good reason, too. Population movements, technology improvements, environmental concerns, and land use concerns are all reasons why a local government may change zoning laws.2  

Buying a Nonconforming Structure Property 

A nonconforming structure poses a risk for a lender. Many banks won’t loan money for these properties. The ones that do require added paperwork and charge a higher interest rate. Here are some things that you can do to make a better decision: 

  • Order a survey of the property, so that you know exactly what the zoning issues are. 
  • Learn the local zoning laws. These may be complicated, and you may need an attorney to help you understand the ordinances. 
  • Find out how much it will cost to remedy the problem. 

Most of the time if the problem is very expensive or impractical to remedy the zoning board will grant a variance. However, many times they decide that they won’t grant a variance if they decide that it is not a significant burden to fix the problem. 

Financing a Nonconforming Structure Property 

Whether the property is commercial or residential the nonconforming structure adds risk to the investment. The higher the cost to remedy this situation the higher the risk for the lender. Prepare for: 

  • Providing increased documentation about the building(s) 
  • A higher interest rate because of increased risk for the bank 

These structures present a significant risk for your investment, whether it is a commercial venture or a home for your family.  

Final Thoughts on a Nonconforming Structure Variance 

Nonconforming structures present a significant risk for your investment. It is important for you to learn exactly why the zoning changed and how it affects your property. We recommend that you order a survey, because it will give you many details about the issue.  

 Because zoning laws are added and changed over time, you may not know if your property is nonconforming, especially if it is older and/or the area has changed significantly since you bought it. A good real estate attorney in your area can also guide you to make a good decision about what to do. 


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