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I'm Lucy, and I'd be happy to answer your questions today.
Grandfathering is not something that happens automatically. There would have to be some sort of law that said people who were part of your area before it became part of the city were permitted an exception to the city's zoning laws. However, the way that usually works is that people would only be grandfathered in if they were out of compliance with the law at the time the change happened - meaning, properties that previously had 2 or 3 B&Bs wouldn't be required to tear them down. It wouldn't necessarily mean a person who could have, but didn't, build the buildings retains the right to do so. But there would have to be a law that specifically provided for those exceptions. There isn't any general, over-arching grandfather statute that applies to all situations.
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