1.4 Land-Use Controls, Public & Private Restrictions, and Encumbrances

Public Controls: The Four Government Powers (PETE)

Government limits private land use through four powers, remembered as PETE:

• Police power — the power to regulate for public health, safety, morals, and general welfare. Zoning, building codes, and environmental rules flow from it. No compensation is owed when police power restricts use.
• Eminent domain — the power to take private property for public use, exercised through condemnation, but only with just compensation (the Fifth Amendment).
• Taxation — the power to levy real-property taxes; unpaid taxes create a superior lien.
• Escheat — property reverts to the state when an owner dies with no heirs and no will.

Zoning and Related Tools

Zoning divides a jurisdiction into use districts (residential, commercial, industrial, agricultural). Key concepts the exam tests:

A nonconforming use (“grandfathered”) lawfully existed before the new zoning and may continue, but it usually cannot be expanded or rebuilt if destroyed. Buffer zones separate incompatible districts.

Private Controls and Encumbrances

Private parties also restrict land. Deed restrictions and CC&Rs (covenants, conditions & restrictions, common in subdivisions and HOAs) limit use, e.g., minimum house size or no commercial activity. When a private deed restriction is more restrictive than zoning, the stricter rule controls.

An encumbrance is any claim, lien, or right that affects title or limits use. Encumbrances divide into two groups:

• Money encumbrances (liens) — affect title and value: mortgages, tax liens, mechanic's liens, judgment liens.
• Non-money encumbrances — affect use/physical condition: easements, encroachments, deed restrictions, licenses.

Easements, Encroachments, and Licenses

• Easement appurtenant — a right benefiting an adjoining parcel. It involves two tracts: the dominant tenement (benefits) and the servient tenement (burdened). It “runs with the land” and transfers automatically on sale.
• Easement in gross — benefits a person/entity, not a parcel (utility lines). No dominant tenement.
• Easement by prescription — acquired through open, continuous, hostile use for the statutory period.
• Encroachment — an unauthorized physical intrusion (a fence over the line). Discovered by a survey, it can cloud title.
• License — a revocable, personal permission to use land (a ticket to park). Unlike an easement, it does not transfer and can be canceled.

Worked trap: A neighbor's driveway crosses your lot for 25 years, openly and without permission. Over the statutory period this may ripen into an easement by prescription, not a license — a license requires the owner's permission, which was never given here.

Taking vs. Regulation, and Eminent Domain Mechanics

The line between a compensable taking and a non-compensable regulation is heavily tested. Under police power, government may restrict use for health, safety, and welfare with no compensation — a downzoning that merely reduces value usually is not a taking. Under eminent domain, government physically takes title (or a permanent easement) and must pay just compensation (fair market value) after a condemnation proceeding. Inverse condemnation is the reverse: an owner sues the government, arguing a regulation has gone so far it effectively took the property.

Worked example: A city rezones a commercial corner to single-family residential, cutting its value from $600,000 to $240,000. The owner is generally not owed compensation because the city exercised police power and left an economically viable use. Had the city instead taken a 15-foot strip to widen the road, that physical taking would require just compensation for the strip and any damage to the remainder.

Liens, Priority, and Easement Termination

Money encumbrances (liens) follow a priority order that decides who gets paid in a foreclosure. Property tax and special-assessment liens are superior to all others regardless of recording date. Among most other liens, priority follows "first in time, first in right" by recording date — except that a recorded subordination agreement can voluntarily lower a lien's priority. General liens (judgments, federal tax liens, estate debts) attach to all of a debtor's property; specific liens (mortgages, mechanic's liens, property taxes) attach only to one identified parcel.

Easements end by merger (one owner acquires both the dominant and servient parcels), release, abandonment shown by clear intent, expiration of purpose, or by the same prescriptive use running in reverse. A party wall straddling a boundary creates cross-easements obligating both owners to share support and maintenance — a frequent distractor against ordinary easements appurtenant.

Subdivision Regulation, ILSA, and Recording

Beyond zoning, developers face subdivision regulations: a developer files a plat for approval, dedicating streets and easements before lots can be sold. Large interstate land sales are also governed by the federal Interstate Land Sales Full Disclosure Act (ILSA), which requires a property report to buyers for qualifying subdivisions. Failure to record the plat or deliver required disclosures can void sales and trigger penalties.

Recording an encumbrance gives constructive notice to the world, fixing priority and protecting later purchasers. An encroachment discovered by survey, or an unreleased old easement, becomes a cloud on title that a buyer's attorney will demand be cleared before closing. Worked trap: a buyer's survey shows the seller's detached garage extends two feet onto the neighbor's lot. This is an encroachment, not an easement; the cure is a boundary-line agreement, a setback variance, or removal — it does not automatically convey a right to keep the structure there.