What is land entitlement?

What are land entitlements?

Land entitlements are the government approvals a project needs before construction can start. Examples are a zone change, a conditional use permit, a variance and a site plan review. The City of Long Beach, California lists those four as examples of a planning entitlement.

Some uses are allowed by right and need only a building permit. Other uses need a public hearing and an entitlement first. Your planning office can tell you which group your plan falls in.

Which approvals are part of entitlement?

Entitlement usually combines several approvals, and the mix depends on the place and the project. A developer guide from GatherGov, a planning software company, lists these common pieces.

• Zoning approval, such as a rezoning, variance or conditional use permit.
• Site plan approval, which reviews how the project sits on the land.
• Environmental review, where a state or federal law requires it.
• Subdivision or platting approval, when a parcel is divided into lots.
• Utility approvals for water, sewer, power and other services.

How does the entitlement process work?

The entitlement process usually runs in order: research, a pre-application meeting with planning staff, a formal application, staff review, public hearings and a vote.

Each approval depends on the one before it. A site plan cannot be approved if the zoning does not allow the use. Our guides on how to rezone land and how to subdivide land cover the two most common pieces.

How long does land entitlement take?

Land entitlement takes a few months for a simple request and several years for a large project with environmental review. GatherGov's developer guide puts the full range at three months to several years.

Long Beach, California publishes general estimates for each step. Initial staff review takes 2 to 5 weeks there, and environmental review takes 2 weeks to 15 months. The appeal period and final decision take 2 to 8 weeks.

Many approvals are discretionary. A planning commission or council decides, so the result is never certain.

What is the difference between entitled land and raw land?

Entitled land already has the approvals a builder needs, and raw land has none of them. A builder who buys entitled land carries less approval risk and starts work sooner.

A buyer of raw land takes on the approval risk and the wait. That risk lowers what most buyers will pay. To see the gap in your area, compare recent sale prices of approved lots with raw acreage nearby in the county's sales records. Our guide to how to value vacant land shows how to read comparable sales.

How do option agreements and rezone-contingent contracts work?

An option agreement gives a buyer the right, but not the duty, to buy your land at a set price within a set time. Cornell's Legal Information Institute explains that the seller cannot revoke the offer during the option period. The buyer usually pays an option fee, and in a straight option the seller keeps it if the buyer does not buy.

A rezone-contingent purchase contract usually binds both sides from the day it is signed. The condition delays the buyer's duty to close, not the contract itself. Cornell's Legal Information Institute defines a condition as an event that must occur before the parties are obligated to perform.

While the condition is pending, the seller usually cannot back out or sell to someone else. If the rezoning fails or the deadline passes, the buyer can usually walk away on the contract's terms. The exact effect depends on the wording and your state's law, so have a real estate attorney read the contract before you sign.

What should a seller get for waiting through entitlement?

A seller who ties up land during entitlement should get paid for the time and the risk. Put each of these points in the contract.

• A price that reflects the approved use, not raw land.
• Earnest money or option payments, and the date they become nonrefundable.
• A firm outside closing date, with a limit on extensions and a fee for each one.
• Which approvals must come through, and who pays for the studies.
• Copies of the surveys, studies and plans if the deal ends.

Who usually does the entitlement work?

Developers and builders usually carry the cost and risk of entitlement. They hire land use attorneys, civil engineers and consultants. A landowner can do the work too, but it takes money and patience.

Before you start, ask your planning office what your land can already do under its current zoning. Our guide to finding your property's zoning shows how.

Should you entitle land yourself or sell it as-is?

Most owners sell land as-is, because entitling it is a business project with real cost and a real chance of denial. Our guide to selling land to a developer or builder compares the deal structures.

Liberty Acres is a family-owned land company. We buy land anywhere in the US, in any condition, and close through a title company. We pay back taxes and all closing costs, with no agents and no commissions. We can close in as little as 14 days. Most sales close within a few weeks to a few months, once the title work is done. For larger parcels with development potential, we can sign terms that allow time for zoning and entitlement work. You keep title until closing, and the price can reflect the added value. To see what your parcel could bring, get a cash offer.

Common questions