What are Entitlements in Real Estate Development Business?

In this article, I will share what are entitlements in real estate and what kind of documents you need for approval from your local government. As every property is different, so does their approval process. 

I will also share how the system of real estate entitlements works and how many approvals you need to get started developing something on the land you own or the property you want to redevelop. But first, let’s understand what are entitlements in real estate.

What Are Entitlements in Real Estate

Real estate entitlements are a set of approvals needed to develop a piece of property on a specific land. The term ‘entitlements’ in real estate doesn’t refer to any singular approval but a variety of approvals needed on a particular project and location. 

These entitlement building approvals are given by many offices combined, based on the city, area, and the States’s law. A developer must have all the permits that are required to develop a property. Some approvals are as follows.

15 Common Real Estate Entitlements

Common Real Estate Entitlements

There are many other approvals that a developer needs to develop and complete his projects, but these fifteen are the most important ones.

  1. Land use Permit 
  2. Complete site plan approval
  3. Building architectural design approval 
  4. Landscaping approvals
  5. Zoning variances permits
  6. Rezoning approvals
  7. Utility connection permits
  8. Basic amenities approvals
  9. Roads building permits
  10. Others daily services
  11. Grading permit
  12. Sewage disposal system
  13. Tree removal permits
  14. Tree relocation permit
  15. Overall building permit

Get all these before doing anything to the land for your own safety. 

Documents Needed for Entitlements in Real Estate

Before you know what are entitlements in real estate, you need to know about the documents that are required to verify whether the property is suitable for the intended improvements or not. And those are as follows.

  • Boundary survey
  • Environmental Reports (Phase I and Phase II)
  • Geotechnical and Soil condition
  • Trees and surface inspection on the land
  • Perc test report (advance soil test)
  • Well tests (a process for petroleum tests)
  • Detailed site and building plans
  • Complete architectural review

Look, every land is unique. That is why specific entitlements, related studies, and reports can vary. It’s not fixed, but you should have prepared them as soon as possible if applicable to you.

What Does Entitlement Mean in Real Estate Exactly?

What Does Entitlement Mean in Real Estate

Getting all the real estate entitlements is difficult when acquiring vacant land, developing a property, or getting approvals for an existing property. 

  • In simple words, entitlements are simply specific permissions granted to a property for its use. 

Real estate entitlements are required only when buying or selling unimproved land. But it may also apply to already improved properties, which have buildings and landscaping on them.

Process for Getting Entitlements in Real Estate

The process for entitlements will vary in every city in the world as they have different rules and regulations. Some rules have under municipality control, and some have under panchayat control. You can not tell the process exactly of these entitlements approval in a particular area.

Here is a common process explaining how these entitlements work. But you have to check once more before using them. I am not an expert here. It’s all up to you. 

Getting the Zoning Entitlement Permits

For example, if state zoning law doesn’t allow your development, you can ask your project manager to change something in the plan so that it can get along with the law. 

If that does not work, you may have to present an authoritative argument about how the development will benefit the community and the nearby neighborhood without having a negative impact. 

  • That means you have to try continuously to convince them as it’s just not the law, but the approval of the neighbors is also needed.

The first stage is to get approval from the planning board, planning commission, or planning committee. You will present your proposed land, how you are intended to use it, and your zoning request to the local committee.

They will ask you some questions and then vote on whether to approve you or not. The results will be passed on to the city council or township board if approved.

That is the process of getting entitlement approval. I just shared with you about one approval of many, the Zoning approval. All the other permits are the same, with some little variation. You can take this as a guide before applying for other entitlements

Local Politics and Entitlements in Real Estate

Local Politics and Entitlements in Real Estate

While developing some properties in a particular area, local politics can harm you a lot. Most developers first approach that area’s local MP and other political men who are in high positions.

They approach and convince them to help with the development, and they assure that there will be no problem. You are free to develop anything. Without local political approval, no one can develop anything in the area. That is the truth.

But if neighbors in the area start to riot and say these building will damage their view, flow of air, or anything disturbing, those MPs will not support you. They only love their chairs, and they don’t want any trouble with them. They will never disturb those people but you.

They will support those neighbors, no matter how much you have donated to their party office. Sounds betrayed? But politics is like that. But don’t worry. You have other options to handle these.

You can talk to the leader of that riot and offer him a unit in the building for a discounted price or anything he might want. If he agrees, the riot will end soon. You just have to convince their leader.

So never trust the local politics as much. Support, but not with everything. It happens in every country throughout the world, and you can escape these. Keep both parties happy and develop your building. That is the best option you have.

Last Words

So now you know what are entitlements in real estate and how to get those approvals in a short prepaid time. I am not an expert. All these pieces of information are available online. It’s up to you how you get those permits and handle the local politics. Thanks for reading. See you soon.

Leave a Comment