Splitting Lots: What It Takes to Subdivide a Piece of Property

Trying to purchase land and subdivide it? Or hoping to split a lot you have? It could be harder than it seems.

Subdividing land involves dividing a single property into smaller parcels. Local governments often greenlight companies that create large subdivisions, as they can boost local tax bases and economies. In a parallel way, an individual might see valuable benefits in splitting up land.

You cannot simply create new deeds, though. It’s much more complex than that. Here are the basics.

Threshold Matter: Finding Out If Splitting Your Lot Is Allowed

A deed holder might wonder if it’s possible to subdivide the land, create an extra property, and sell it for a profit. Or the deed holder could be motivated to split up land to offer new housing to friends or family members.

But it takes a lot to get financially ready for this adventure. Costs for subdividing a plot of land can easily run $10-50K.

Then, onto the process. It all starts with reading the regs, calling your county planning department, and knowing your contacts. So, before you get serious about subdividing land:

• Do you know that the land is allowed to be divided? Counties regulate this question. Check the county website for zoning regulations. Focus on the rules and laws that pertain to the place at issue. Each state and local government has its own laws and procedures. Find out if your parcel is allowed to be divided, how many times, and down to what size.

• Are you in touch with local planning officials? Call the local planning office. Ask about the process. Give them the address on your plot, and they can give you an idea of what’s possible (or not). You might need a zoning variance to make your plan work. Local officials can tell you how to proceed.

So far, so good? Prepare to hire a local land consultant (attorney or surveyor) for guidance through the complexities we’ll discuss below. Hint: You’re going to be dealing with a survey crew, and experts in hydrology and soil conditions, engineers… And after that, there’ll be hearings at your local planning board.

Is it a no-go? It could be easier in any case to either purchase a duplex, or buy two plots next to one another. If you’re just buying land tracts, adjacent properties could be available. Buying property with multiple lots? Verify with the county that the parcels were correctly subdivided!

Getting It Done: Navigating a Subdivision Process

At the core of the project is the subdivision application. The county planning commission reviews this document in light of your professionally drafted subdivision plan and supporting information. The commission will consider the proposed lot sizes, setbacks, utility easements, traffic and parking concerns, and so forth.

Even for the most straightforward subdivision, experts must be brought in to prepare for this. It takes a licensed engineering expert or team to scrutinize the construction and infrastructure plans before they go to the county.

What areas of expertise matter? Environmental. Architectural. Civil engineering. All this input is part of creating a plat (surveyor’s map) for the plots. You’ll need the land graded. You’ll need access roads. You’ll need utilities installed, and easements created. The surveyors and engineers who actually work with construction permits will get you to the point where your county government can review and sign off on a preliminary subdivision plan.

Strict Scrutiny: Who Can Make or Break Your Plan?

Remember: Your local planning board can say yes or no to your plan. It might say yes, but with serious modifications.

And what about the NIMBY neighbors? If people in the area don’t want land use changes, they can raise their voices at the public zoning hearing. Yes, your county planners might set a date for a public hearing to gather input from community members.

If the plan gets past that scrutiny, there are still plenty of conditions to meet and maintain:

• Compliance with environmental standards. The environmental engineer runs an impact assessment to determine how your plan will affect biodiversity, rainwater runoff, traffic patterns, and a multitude of effects on people, businesses, historic and cultural preservation, wildlife, and the environment.

• Utility connections. Your land-splitting plan has to account for separate connections for each property. Permits are required to install connections to water, sewer/septic, gas and electric services.

• Additional construction concerns. Owners typically need new infrastructure placed on the sites to allow for access and utilities. Plan for both time and expenses to rise above initial ballpark figures. Why? Construction personnel and materials are both facing heavy demand.

OK. You’ve got the approvals. And the permits. You understand the conditions. You’ve got the funds. Finally, your land can be subdivided.

Finish Line: Creating a New Deed

An approved subdivision plan must be filed with the county recorder of deeds. After recording, the owner can sell the extra lot or begin work on the new construction.   

If you are splitting up land to create a new residential property, you usually need to create a new deed to match. The county needs deeds on record with separate certificates of title, addresses, and legal descriptions for the new parcels, including any easements and restrictions that exist. There will be fees, of course. Survey fees, application fees, school impact fees, and, usually, a transfer tax.

Even if there will only be two landowners, the initial owner can establish a homeowners’ association for the housing units. A local real estate lawyer with HOA experience can advise. In any case, the owner may include deed restrictions to prevent certain activities on the new, adjacent parcel.

If your land is already on property with a homeowners’ association, you’ll need the backing of the HOA as the new parcel will be part of it.

All document preparation is best done with the guidance of a real estate attorney who can help anticipate and avert title problems. For example, a legal agreement with the new deed holder can establish a right of first refusal, so the initial owner has a way of buying back the adjacent land if it goes up for sale.

You Get the Picture…

Subdividing land takes determination, time, and patience with local bureaucracies.  

For the right property, in the right place, splitting the land can create more property value, new opportunities, and new parcels that can be especially beneficial when housing is scarce. But there’s much more to splitting lots than just creating new deeds. Even if you’re not building another home on the extra land, splitting it off means running a gauntlet of local and state requirements.