If you own property in an unincorporated township, starting an annexation process could save your bottom line. It can also open economic doors.
What Is PROPERTY Annexation?
Annexation involves a property in a township becoming a part of a municipality, like a city or village. The property must share a border with the municipality – you can’t create a floating outpost of City A in the middle of Township B.
BENEFITS Of REAL ESTATE ANNEXATION
There are several advantages of real estate annexation to consider:
- Services: A municipality’s water and sewer rates may be less expensive, and commercial properties can benefit from switching from a township’s system. The municipality is also responsible for street maintenance and snow removal.
- Police and fire: An annexed property is under the jurisdiction of the municipality’s police force and fire and rescue. You can rest easier knowing emergency services are readily available.
- Property value: Annexation to a municipality increases property values and makes residential and commercial properties more attractive to the real estate market.
- Voting: Becoming a part of a municipality means you can vote for its elected officials, who may, in turn, affect your property with ordinances and regulations.
CONS OF REAL ESTATE ANNEXATION
There are also several disadvantages to annexed properties that can be discouraging to investors.
- In most cases annexed properties will be subject to higher property taxes, which can be a significant financial burden on property owners.
- Property owners who are annexed may feel a loss of autonomy since they could come across new zoning laws, building codes, or other regulations they had not previously experienced.
- Annexation could cause conflicts between the property owner and the annexing entity due to regulations a property owner could disagree with or think they’re being unfairly targeted.
- Depending on the circumstances, an annexed property could decrease in value due to factors such as increased taxes or reduced desirability based on location and regulations.
HOW DOES ANNEXATION WORK?
You’ve decided to annex your property? Great!
Now the fun begins. Residential and commercial property owners must present a petition for annexation to the county commissioners. You may file to annex your property if:
- All property owners in the proposed territory file petitions
- A majority of property owners in the proposed area agree to a single petition
- The property is not “unreasonably large”
- The benefits of the annexation and surrounding areas outweigh the detriments
The township and annexing municipality must agree to the terms of a petition. The municipality must also provide municipal services to the annexation and set an operation timeline.
You can petition for annexation if your property qualifies as an economic development project. Tax commissioners must certify a project costs at least $10 million with an annual payroll of over $1 million. Economic developments include:
- Industrial
- Commercial
- Distribution
- Research and development
HOW DO I KNOW IF A PROPERTY HAS BEEN ANNEXED?
Contact Your Local City or Town Hall: Local government entities usually annex real estate. By contacting your local city or town hall, they can provide information on the jurisdiction and annexation of a property or how to further locate this information.
Check the Property Deed: The property deed may include information about annexation, especially if it has occurred recently. You can obtain a copy of the deed by contacting your local county recorder.
Search the County’s Property Records: The county assessor's office maintains records of all properties within the county. You can search their database to see if the property in question is listed as being within city limits or having been annexed.
How Long Is The REAL ESTATE Annexation Process?
Timelines vary depending on the property, potential appeals, and municipality/township compliance. You’ll likely need a decent amount of patience since it takes several months to complete an annexation.
Signatures on a petition must be taken no more than 180 days before the filing date. Once you file your petition, the township and municipality have 30 days to accept or object to the annexation. An annexation takes effect 30 days after the passage of the resolution.
Take advantage of DRK and Company’s property management and brokerage services. Call 614-540-2404 or contact us online for more information.
Until next time,
