How to Legally Subdivide Your Property

Use these links to jump to different sections:

• What Is the Process for Subdividing My Property?
• What Permits Do I Need to Subdivide My Land?
• How Do Zoning Laws Affect Property Subdivision?
• Can I Subdivide My Property if It Has a Mortgage?
• Find an Experienced Real Estate Attorney

You own a large parcel of land and have received an offer to sell a portion. The offer is profitable for you and sounds like a great deal. Before you start writing that sale contract, there are a few things you need to do. Land development is governed on a local level to ensure there is organization in cities and towns. In order to subdivide your land, you need to follow legal procedures for approval.

What Is the Process for Subdividing My Property?

The subdivision process requires multiple steps that can take months to complete. Because there are so many factors to consider and requirements to meet, working with a real estate attorney can be helpful. They will know how to subdivide land in your jurisdiction.

Zachary Schorr is a real estate attorney at Schorr Law in Los Angeles, California. He explains how California requires property owners to go through an official process to legally subdivide their property. “There’s the Subdivision Map Act, which is a California rule. I’m sure other states have similar rules, but you just can’t go changing or selling property. You have to go through the formal process to actually do it.”

1. Research Local Zoning Laws and Subdivision Regulations

The first step is to do your due diligence by researching the zoning and subdivision laws that apply to your property. These are the restrictions that you must follow when subdividing your property. You can hire a real estate attorney to perform this research for you. They will guide the legal options available.

You or your attorney can begin working with the local zoning and planning office to discuss your plans for subdivision. The office will usually be able to tell you the permits and approvals required to accomplish your subdivision.

2. Hire a Surveyor and/or Engineer

You will most likely need to hire a land surveyor to create a detailed subdivision plat of the new properties. The plats should accurately outline the proposed new property lines, road access, utilities, and drainage and accurately outline how the smaller lots are created from the original plat.

3. Submit Subdivision Application

When your application is ready, submit it to the local planning and zoning authority for approval. Typically, you will have to pay a fee with your application. In some jurisdictions, you will have to file for approval in additional departments, such as the health or transportation departments.

4. Attend Public Hearings (If Required)

Some jurisdictions require a public hearing to be held before an official review. These hearings are open to the public and allow neighbors and the general community to review the proposed plan and voice their concerns or support of the subdivision. 

5. Obtain Approval from Planning/Zoning Board

You will receive a formal approval document from the planning board if approved. Sometimes, the approval comes with conditions that you will have to meet. In this situation, the approval is conditional and won’t be complete until you satisfy the conditions.

6. Record the Subdivision Plat

Once you receive final approval, you can record your subdivision with the local county records office or register of deeds. This makes the division official and allows you to transfer ownership of the new lot.

7. Sell or Develop the Subdivided Lots

Now that you are legally able to, you can transfer ownership of your property to someone else. Prepare a sale contract and use a deed to transfer ownership. The new owner can then record their title to officially transfer ownership.

8. Compliance and Inspections

Some jurisdictions require a final inspection of the property. This is to ensure you follow any zoning and permitting requirements. Inspections are more likely to happen if you plan to build on either of the new lots.

What Permits Do I Need to Subdivide My Land?

You should start with a subdivision or plat approval permit when dividing your land. This permit will give you government approval to subdivide your property. You may also need an environmental permit if the property contains wildlife habitats or wetlands. Zoning permits will be required to ensure density, land use, and size restrictions are followed. Additional permits for road access, utilities, and stormwater drainage are also required. If you plan to build on either of the land parcels, you will need a building permit.

How Do Zoning Laws Affect Property Subdivision?

Local zoning laws can significantly impact how you subdivide your property. Most commonly, there are minimum lot size requirements. You won’t be able to divide your property if either of the two resulting lots are each smaller than the minimum. Another potential impact could be local zoning regulations on density that limit the number of acre lots allowed in a geographic area. Even increasing by one could put you over the limit.

Easements and Infrastructure Zoning

Zoning ordinances heavily impact property use for infrastructure needs. When you divide your property, you can impact how the two properties access utilities and infrastructure. For example, setback requirements could outline the minimum distance between a property line and structures on the property. Others require a certain amount of frontage for each property to a street. Easements and right-of-way requirements can prevent subdivision because they eliminate access to utility structures in real estate.

Homeowners’ Association (HOA) Covenants

When you own a property in a HOA-governed community, you must abide by the covenants and regulations in place. Deed restrictions can restrict what you can do with your property, including dividing it into pieces. Generally, the HOA wants to maintain the appeal of the entire community. It will impose subdivision regulations that will help maintain organized open green spaces.

Subdivision ordinances typically outline how a community can be organized. This helps ensure future development aligns with growth goals. Homes are grouped together to create communities with shared spaces around them. The number of lots in each cluster could be limited.

However, Schorr provides an example of why speaking to a lawyer is so important. A lawyer can explain the applicable law and how it applies to your HOA. “Just like anywhere in the country, there are HOAs in California. But California has decided that an HOA cannot contract around [the Subdivision Map Act], so it is more powerful than what your HOA may prohibit.”

Historical Preservation Zoning

If you happen to own a historical property, there could be zoning ordinances that regulate how you maintain and change it. These ordinances could prevent you from subdividing the property and risking compromising the integrity of the property’s historical significance.

Environmental and Floodplain Regulations

In some situations, environmental zoning and floodplain regulations could prevent you from subdividing your property. Wetlands, floodplains, and endangered areas may be prevented from having property lines running through them. This could change how you divide the property if you are allowed to subdivide it.

Variance and Special Use Permits

You have legal options if a zoning ordinance prevents you from subdividing your property. You can apply for a variance or special use permit. This is done through your city, municipality, or county government. Applications can take months to process.

Can I Subdivide My Property if It Has a Mortgage?

Land subdivision with a mortgage is more complicated because a lender holds an interest in the property. Before homeowners can begin dividing land, they need to contact their mortgage company for approval. You may find subdivision to be more expensive with legal fees, surveyor costs, potential reappraisal fees, and lender charges for processing the documents necessary.

Schorr explains the difficulty of subdividing land that is encumbered by a mortgage. “You would have to go to [the lender] and get their permission. You could potentially cross-collateralize the debt, meaning put it on both properties, but that would be a problem, I would imagine. So you probably wind up having to refinance and get two new loans.”

Once you submit your subdivision plans to the lender, it will analyze the terms of your mortgage and other factors to determine approval. The lender may require a new appraisal to determine the value of the remaining property. The change in property size could significantly impact value and future salability. Dividing the property could also impact your debt-to-income ratio, leading the lender to want new loan terms. There could also be issues with lien priority, so the lender will want to check for other property liens.

The lender may require you to refinance your mortgage with new documents that reflect the new parcel in the loan documents. Other options may be to modify your mortgage and its terms. This could change the interest rate, require an additional lump sum payment, or increase the monthly payment due.

There could also be a partial release of a lien on the newly created parcel. The original lot will retain its lien while the subdivided parcel is free of encumbrance. Generally, lenders require you to make a significant lump sum payment to agree to this.

Find an Experienced Real Estate Attorney

Working with a real estate attorney can make the subdivision process smoother and easier. Your attorney can handle the document preparation. Their knowledge and experience can reduce the risk of delays from improperly prepared documents.

Visit the Super Lawyers directory to begin your search for an experienced real estate attorney. For more information, read our guide on land use and zoning law.