Understanding Corporate Limits

July 15th, 2011

It's a question we hear from almost every buyer: What do "corporate limits" and "unincorporated" really mean, and how should that affect my decision to purchase a particular home?

Most of the cities, villages, and towns in our area are municipal corporations. Dictionary.com defines a municipal corporation as "a city, town, village, etc., that operates under a corporate charter granted by the state." When a property falls within the corporate limits of a municipality, that means it is within the boundaries established by that municipal corporation. These municipalities usually provide a variety of services to residents within these corporate limits. These may include emergency services (police, fire, ambulance, etc), park districts, library services, utilities, building permits, zoning regulations and more.

An unincorporated area is an area that is not located within the corporate limits of any municipal corporation. In unincorporated areas, many services not provided by the municipality are often provided by larger governmental structures such as counties or townships. Which services are provided by which entity can vary from area to area. For example the property may be serviced by a county sheriff's department instead of city police but may also have water and sewer service from a nearby city.

In some cases, property taxes may be lower in an unincorporated area. This is because some municipal services may be funded in whole or in part by property taxes. If those services are not included in the tax bill, it can be lower. However, that means that residents of those unincorporated areas may not have access to or may have to pay non-resident fees to use those services (such as park district programs or library services).

Residents of an unincorporated area may choose (as a group) to apply for annexation to a municipality. The procedures for this can vary from one municipality to another. If a neighborhood is annexed, there are sometimes costs incurred by the residents.

Unincorporated properties may be right for some buyers and may not be right for others. It is important to first decide which municipal services are important to you. If you are interested in a property that is in an unincorporated area, you can then make your decision based on which, if any, of those services are available for that particular property.

It is important to note that corporate limits and mailing addresses may not match. For example, a house in an unincorporated area will usually have a city name in its mailing address, even though it does not fall into the corporate limits of that city. In our area there are several subdivisions where the properties have one city name in their mailing address, but are actually within the corporate limits of a different municipality.

Finally, school district boundaries are not necessarily determined by corporate limits. Many school districts cover multiple municipalities and/or unincorporated areas.

For more information about this topic, you can contact your municipality or county - contact information can be found in our Community Resources section. If you would like more information about the home buying process and how we can help you find a home, please visit our Buyers section.

This information is not intended as legal advice, nor is it an exhaustive guide regarding this subject. For legal advice, please consult an attorney. No warranty or representation, express or implied, is made as to the accuracy of the information contained herein and the same is presented subject to errors and omissions.