Also known as: amortizations · amortize · amortizes · amortized · amortizing · amortizement · amortisation
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A zoning mechanism that requires termination of a nonconforming use after a reasonable period specified in an ordinance. Reasonableness turns on the nature of the use, the owner's investment, and the length of the phase-out period. The mechanism limits protection of preexisting property rights without constituting a taking.
A zoning mechanism that requires termination of a nonconforming use after a reasonable period specified in an ordinance. Reasonableness turns on the nature of the use, the owner's investment, and the length of the phase-out period. The mechanism limits protection of preexisting property rights without constituting a taking.
Select any source to read its text and confirm it supports the definition.
The process of gradually extinguishing a debt or allocating the cost of an intangible asset over a fixed period. Payments reduce principal while interest accrues separately. The same spreading concept applies to cost recovery for assets with a definite useful life.
Select any source to read its text and confirm it supports the definition.
The process of gradually extinguishing a debt or allocating the cost of an intangible asset over a fixed period. Payments reduce principal while interest accrues separately. The same spreading concept applies to cost recovery for assets with a definite useful life.
Each sense below has its own examples, sources, and questions.
Andre Antoine has operated a gravel quarry on land he purchased decades earlier. After the city rezoned the area residential, it enacted an ordinance requiring all nonconforming quarries to cease after eight years. Andre continued operations for the full period but now faces an enforcement action. The ordinance supplies the reasonable phase-out period that extinguishes his vested right to continue the nonconforming use.
Avalon Pharmaceuticals maintains a large advertising billboard on property it owns. The city later rezoned the district to prohibit billboards and adopted an amortization provision allowing ten years before removal. Avalon argues the period is too short given its investment. The ordinance remains valid because the ten-year window is reasonable in light of the use, the investment, and the public interest in eliminating the nonconformity.
Courts examine the nature of the use, the owner's investment in the property, and the length of the period allowed. A period that gives the owner a fair opportunity to recoup the investment while advancing the public interest in eliminating the nonconformity is ordinarily upheld.
Supporting sources
Most jurisdictions hold that a reasonable amortization period does not amount to a taking. The owner receives a limited monopoly during the phase-out and has time to plan for relocation or conversion of the use.
Supporting sources
Amortization is an involuntary termination imposed by ordinance after a fixed period regardless of the owner's intent. Abandonment and discontinuance require voluntary cessation or nonuse for a statutory period and turn on the owner's conduct rather than a legislative timetable.
Supporting sources
Anika Anand borrowed $300,000 secured by a mortgage on her home. The note requires monthly payments of principal and interest calculated to amortize the debt over fifteen years. Each payment reduces the outstanding principal while interest accrues on the remaining balance. After five years of timely payments the principal has declined substantially and the amortization schedule continues unchanged.
Negative amortization occurs when monthly payments are insufficient to cover accruing interest, causing the principal balance to increase over time. The unpaid interest is added to the debt rather than paid currently.
Supporting sources
…required. In addition, 12.2 per cent of Fremont’s loans offered the borrower lower monthly payments based on a forty-year amortization schedule, with a balloon payment required at the end of thirty years; the usual amortization schedule was based on a thirty-year period. [^maj-10]: As of January 15, 2008, Fremont had…