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

Public Land-Use Controls — Police Power and PETE

Government limits private ownership through four powers, remembered as PETE:

Police power is the source of zoning (residential, commercial, industrial), building codes, subdivision regulations, and environmental controls. It requires no compensation because the owner still holds title.

Eminent domain is the power; condemnation is the legal process used to exercise it. The government must pay just compensation (fair market value). Inverse condemnation is when an owner sues because government action effectively took the property without a formal proceeding.

Zoning Relief and Nonconforming Uses

When zoning would otherwise prohibit a use, several relief mechanisms exist:

• Variance — permission to deviate from a zoning rule due to unique hardship (e.g., an odd-shaped lot needing a smaller setback).
• Special (conditional) use permit — allows a use compatible with the zone but needing review (a church or daycare in a residential zone).
• Nonconforming use ('grandfathered') — a use that was legal before the zoning changed may continue, but generally cannot be enlarged, and if destroyed often cannot be rebuilt to the old nonconforming use.
• Spot zoning — rezoning a single small parcel inconsistently with the area; generally illegal.

Private Controls and the Stricter-Control Rule

Private parties also restrict land. Deed restrictions (restrictive covenants) and a subdivision's CC&Rs (Covenants, Conditions & Restrictions) are enforced by the HOA or neighbors. Key rule: when a deed restriction and public zoning conflict, the stricter (more limiting) of the two controls. If zoning allows a 35-ft building but the CC&Rs cap height at 25 ft, the 25-ft limit wins.

Encumbrances — Liens, Easements, and Encroachments

An encumbrance is any claim, charge, or limitation that affects title or use. Encumbrances do not necessarily prevent transfer, but they travel with the land. Two broad families:

1. Encumbrances affecting MONEY/title — liens:

A specific lien attaches to one property (mortgage, mechanic's, tax); a general lien attaches to all of a debtor's property (judgment, IRS).

2. Encumbrances affecting USE:

• Easement — a right to use another's land. An easement appurtenant benefits an adjoining parcel (a dominant tenement holds the right; the servient tenement is burdened) and runs with the land. An easement in gross benefits a person or company (utility lines) with no dominant estate.
• Encroachment — an unauthorized physical intrusion (a fence or eave crossing the boundary). It is discovered by a survey and can cloud title.
• License — mere permission to use land; revocable and personal (a ticket to park), not an interest in land.

Trap: An easement appurtenant transfers automatically with the dominant parcel even if the new deed doesn't mention it; an easement in gross is personal and usually does not transfer with adjacent land.

Easement Creation, Termination, and Profit Rights

The exam goes beyond defining easements to test how they are created and ended.

An easement by necessity ends when the necessity ends (the dominant owner gains other access). An easement by prescription is the use-based cousin of adverse possession, but the prescriptive user gains a right to use, not title. Easements terminate by merger (one owner acquires both the dominant and servient parcels), release, abandonment, or expiration of purpose.

Profit a prendre and party walls

A profit (a prendre) is the right to take something off another's land — timber, gravel, minerals, game. It differs from an easement, which is only a right to use. A party wall straddling a boundary is jointly owned, with a cross-easement of support; neither owner may remove it unilaterally.

Lien Priority and the Tax-Lien Exception

When a property cannot pay every claim, priority decides who is paid first from the proceeds. The general rule is "first to record, first in right" by date and time of recording. The dominant exception: real-property tax and special-assessment liens take priority over all other liens regardless of when they attached.

Worked priority problem. A property sells at foreclosure for $300,000. Recorded claims: a $9,000 property-tax lien (this year), a $250,000 first mortgage (recorded 2019), a $40,000 second mortgage (recorded 2022), and a $15,000 judgment lien (recorded 2024). Payment order: taxes $9,000 first, then first mortgage $250,000, then second mortgage $40,000 ($1,000 of which is unpaid after funds run out), and the judgment creditor receives nothing. Subordination agreements can voluntarily reorder mortgage priority, but nothing displaces the tax lien's first position.