Local governments commonly revise sections of zoning ordinances and sign codes from time to time. Less frequently, a local government will enact a comprehensive revision that replaces an existing zoning or sign code in its entirety. In either case, there will normally be a number of building lots, structures, or uses (including signs) that were in compliance with or "conformed" to the "old" code, but are out of conformance or compliance under the "new" code. A sign finding itself in this category becomes a "legal non-conforming" sign.
As a general matter, a business owner may retain a legal non-conforming sign, and does not have to bring it into compliance with new regulations. The owner may also maintain and repair the existing sign face and structure without running afoul of the new code. In these cases, the sign is said to have been "grandfathered in." Also as a general rule, if the owner sells the business, the new owner has the right to retain the non-conforming sign, although some sign codes make it unlawful to change sign face copy or design without making the whole sign conform to the new code. However, such a rule raises serious legal questions because it is a limitation of free speech.
In contrast, examples of limitations on a non-conforming sign that are clearly lawful include a prohibition on increasing the area or height of a non-conforming sign, or requiring that a replacement sign structure conform to the new regulations when a non-conforming sign structure is removed.
Some sign codes contain provisions requiring the removal of non-conforming signs within a specified time limit-generally 2 - 10 years. This "grace period", referred to in the codes as an "amortization period", is based on what the local government has judged to be a sufficient passage of time to allow the owner to recoup the cost of the sign. In the absence of an express statutory provision that amortization is disallowed as a form of "just compensation", a majority of state courts have found, to date, that amortization is a constitutionally acceptable method for achieving removal or severe downsizing of non-conforming signs without paying monetary compensation. Where amortization has been upheld, the general rule is that the amortization period must provide the sign owner a reasonable time to recoup the initial investment.
Federal legislation has made amortization an impermissible method for compensating owners of signs that are removed or relocated pursuant to the federal Highway Beautification Act, and amendments. This proscription applies to all signs located within 660 feet of interstate and primary highways. Federal legislation and policy also requires payment of just compensation whenever a sign is removed, or its visibility compromised, as a result of highway or street improvements that in any way involve federal funds.
At the state and local level, business owners should be aware that amortization is a hotly debated, and rapidly changing, area of the law. The primary reason for this is the increasing awareness by legislative and judicial bodies that an on-premise business sign is worth far more than its original cost, and that an amortization period will not fairly compensate a business owner for business revenues that will be lost when the owner must finally conform to a code limiting the sign's visibility.
A business owner who has been informed that a non-conforming sign must be removed, due to the expiration of an amortization period, is well advised to consult legal counsel before agreeing to remove the sign without receiving compensation, or in the alternative a variance or exception to enforcement of the code.
