Legal Nonconforming Use
A use or structure lawfully established before current zoning that no longer conforms — "grandfathered." Such properties can usually continue but face limits on expansion and, critically, on rebuilding after major damage.
The appraisal question with a grandfathered property is what happens if it burns down: many ordinances extinguish nonconforming rights if the structure is destroyed beyond a threshold (often 50%), forcing any rebuild to current code — fewer units, larger setbacks, less building. Lenders and the GSE forms ask specifically whether a nonconforming improvement can be rebuilt to current density. The answer can change both financeability and value, so appraisers verify rebuild provisions with the zoning office rather than assume.
Related Terms
Zoning
Local government regulation of land use — districts that control permitted uses, density, height, setbacks, and lot requirements.
Zoning Compliance
Whether a property's current use and improvements conform to the zoning ordinance: legal, legal nonconforming (grandfathered), illegal, or no zoning.
Conforming Use
A property use that complies with current zoning regulations and is consistent with the predominant land use pattern in the neighborhood.
Variance
Permission from a zoning board to deviate from a specific zoning requirement — a reduced setback, undersized lot, or expanded use — typically granted on hardship grounds.
More in Legal & Regulatory
View allUniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
FIRREAThe 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions..
Dodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination..
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.