Hi, this is Yuriy Skripnichenko with TrustArt Realty. Today I want to discuss the critical importance of your property zoning and its current use, and how that can potentially affect your ability to legally rent your house in Philadelphia.

Watch our breakdown below, or read on for the key takeaways every investor needs to know before buying a multi-family property.

The Common "Multi-Family" Trap

We often encounter investors who bought a small multi-family property—thinking it was a duplex or a triplex—only to get a rude awakening. After going to L&I (Department of Licenses and Inspections) to get their rental license, they find out that the property actually has single-family zoning and never possessed a legal two-unit rental license to begin with.

Zoning vs. Current Use

There are a few key things that you, as a buyer or investor for multi-family properties in Philadelphia, absolutely must know. The two biggest terms are Zoning and Current Use.

These are very similar terms, but they may mean very different things for you legally:

  • Every property in the City of Philadelphia has its specific zoning. This is publicly available information, and you can always look it up online using the city's property atlas.
  • In a best-case scenario, your multi-family property should have a matching multi-family zoning classification, such as RM or RMX.
  • However, it is pretty common in Philadelphia for a property's zoning not to match its current use. And that is actually okay—provided you have a grandfathered variance for your building.

How to Protect Yourself Before Buying

I know it all sounds complicated. To make it simpler: you need to either have the corresponding zoning for your building's use, or you need a legal variance to use your building if it doesn't have the correct zoning.

Before buying a property, you should always:

  1. Receive a city certification.
  2. Request a copy of the most recent rental license from the seller. This license will explicitly list the number of units that you will be able to legally rent in Philadelphia.

(Disclaimer: This is not legal advice. Please consult your attorney before making any decisions regarding zoning or variances. In some cases, you may be able to obtain a variance for your property; however, it is usually a very lengthy and costly process.)