As a commercial/industrial agent it is extremely important for you to keep up-to-date on the changing city ordinances in the cities you do business in. This is probably the most important in the industrial real estate sector but it also applies to the other areas of commercial/industrial real estate as well. And it is becoming vitally important to make sure that your clients visit City Hall before they sign their lease or deposit receipt to make sure they will be able to get the proper permits to occupy their new building. 

Cities are getting much more demanding now than they ever have before about what they want to have in place before they will grant an official occupancy permit for a company. This is particularly becoming more of a concern in highly-populated areas.

By far the best example that I know of on this subject is the city of Vernon, California. Vernon is a city adjacent to the city of Los Angeles and it is almost 100% industrial. Their police and fire departments have traditionally been rated among the best in the country. Companies that rely on heavy power for manufacturing can find Vernon particularly attractive as the city offers power rates that are approximately 50%-60% of the rates offered by surrounding cities.

For the uninformed broker, though, Vernon can be an absolute nightmare. Before a certificate of occupancy will be granted, an appointment must be made for all major divisions of the Department of Building and Safety to come to the property. Each division then inspects the property and writes a report of what changes must be made to the property before your client can occupy the property.

Loading doors on the building that seem to be fully operable may not be able to be legally used by your client if the city determines that the turning radius for trucks does not meet current building code regulations. Grandfathering provisions simply do not apply here.

There is a regulation on the books requiring that all buildings must provide parking to current code requirements within the next several years. However, many industrial properties in the city have no parking at all except for street parking as they were built under a different ordinance that was in effect decades ago.

If you sold a client one of these properties and were unaware of this parking ordinance you can see how this might pose problems for both you and your client when this ordinance takes effect in the next several years. Among the possibilities that have been discussed to bring property owners into compliance with this ordinance are requiring the owners to demolish portions of their buildings or requiring them to purchase additional land near their buildings to provide this parking.

If you are the owner of a building in the city that is over 75,000 square feet in size, once that building is occupied by a manufacturing company the building can never be used for warehousing again. Also, new certificates of occupancy will not be issued to companies that intend to use more than 50,000 square feet of building area for warehousing.

In addition to all of this the city has just imposed an additional charge on property owners whose properties are currently not used for manufacturing. In many situations this annual charge is several times the normal annual property taxes for the property.

While the city of Vernon is indeed a unique study, one can see from this example how critical broker awareness of the particular rules and regulations of different cities is becoming in the commercial/industrial end of the brokerage business. The old-school way of simply signing a lease and moving into the property figuring that obtaining a certificate of occupancy from the city is a slam dunk doesn't work anymore. In fact this approach can instead cause much chaos and financial injury, and could end up paying for the tuition of several attorneys' children at four-year universities.

Know the regulations in the cities where you do business as a real estate agent. You simply cannot afford not to. Be in constant contact with the departments of building and safety in these cities so you know what the current regulations are.

The old way of doing business as a commercial/industrial agent is simply no longer acceptable.