Free Enterprise - The FindLaw Small Business Law Blog

When Should a Business Sue Over Zoning Laws?

When you're leasing commercial space, you're just looking for the best place to start, grow, or continue your business. If you're getting an entire building to yourself, you probably know you need to track down local zoning ordinances to make sure your business is allowed to operate in that location.

And if you're leasing smaller space from an incubator or in a shared workspace, you're probably expecting your landlord to do their homework on those zoning laws. But beware -- hundreds of entrepreneurs may soon be evicted from a building in San Francisco because their businesses contravene local zoning laws. And the lawsuits may follow.

Zoning Out

Massage therapist Daniel Davies was one of 51 tenants at ActivSpace's building in the Mission District of San Francisco to receive a violation notice from the Department of Public Health last month. The businesses -- other massage therapists and tattoo artists -- were told they would need to obtain a health permit to continue operating in that location. The only problem? The building ActivSpace owned was zoned exclusively for light-industrial and manufacturing use. So, Davies and other tenants were denied health permits, and may be forced to relocate.

"They're not doing their due diligence," Davies told the San Francisco Chronicle, "and they're waving people through the door with a smile on their face and a check in their pocket." ActivSpace declined to comment, although Davies says the company demanded notice from the affected tenants regarding whether they planned to stay or not. And their attorney, Steve Vettel of Farella Braun & Martel, gave the Chronicle a terse statement: "We received the notice, we're aware of the situation and we're evaluating the situation."

Legal Zones

It's unclear whether those businesses will be able to stay, and legal action may be necessary. City supervisors are looking into amending zoning restrictions on massage therapists, and conditional use permits or variances may be available. Additionally, if ActivSpace knew it was renting to businesses that could not legally operate in the building, they may be liable for relocation fees.

Zoning decisions can also be appealed in court. For help with your zoning issues, contact a local commercial attorney.

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