The term derives from the post civil war era. During this period, statutes were enacted by seven southern states with the intent of preventing African Americans from being able to legally vote. One of the main provisions of these statues was to force a black person to take a literacy test and pay a poll tax. These extreme measures were meant to deter blacks from voting. White voters who had grandfathers that voted during the civil war cycle, were not required to pay the poll taxes and take literacy exams that were imposed on blacks. This was possible at the time under what came to be known as the Grandfather Clause.
Eventually in the opening years of the 20th century, the United States Supreme Court ruled the law as unconstitutional and a violation of equal rights regarding voting. The term itself however, did not change, since this ruling was viewed as more of a revision or modification of an existing statute.
Grandfather Clause & Zoning
The term can now be associated with zoning laws and requirements. When new zoning laws are enacted and enforced, such changes In respect to zoning, prevent residential and commercial facilities from being established. In many cases, however, similar existing facilities are permitted and given exempt status in the event where the tenant/owner would like to remain and make existing changes, as long as they abide with the rules and regulations of those new zoning laws.
Grandfather Clause & Ethics
Although an outdated term, in the past it was more commonly used and intended for civil rights issues. The word is now primarily referenced in business related forums. Many critics point out the unfair advantages a Grandfather Clause can bring about. Skeptics would state that such a clause does not apply to existing individuals and/or their facilities, which they may regard as a double standard since new rules and regulations would have to be followed by other parties who may have not already had an existing establishment.
In addition, one of the only few ways an existing business entity or party would lose their Grandfather Clause exemption is if their establishment was sold. In which case, the exemption status would be discontinued and therefore terminated.
Example of Grandfather Clause
A commercial neighborhood in Downtown, Los Angeles has witnessed many business operations adding and making changes to existing businesses over several decades. Potential business related entities would like to move into this neighborhood and make whatever changes they deem necessary. They are soon informed that a new zoning law that has been ratified will prevent them from seeking such changes. For existing parties, this will not be an issue, so long as they continue to abide by certain already existing limitations.
Grandfather Clause Past & Present
The Grandfather Clause is certainly one of a few unusual and rare terms related to both real estate as well as many other different areas of subject matter. This was a controversial term derived from two previous centuries, which was viewed by many as a form of civil suppression to becoming a term engaged in areas of business without the civil politics attached.