1.4 Land-Use Controls, Public & Private Restrictions, and Encumbrances
Key Takeaways
- Public land-use controls (police power: zoning, building codes, eminent domain, taxation, environmental rules) override private restrictions when they conflict.
- Private controls (deed restrictions, CC&Rs) are enforced by neighbors or HOAs; where public and private rules both apply, the stricter one governs.
- Encumbrances split into money claims (liens) and use/title limits (easements, encroachments, deed restrictions, licenses).
- An easement appurtenant runs with the land and benefits a dominant tenement; an easement in gross benefits a person or company (utilities) with no dominant estate.
- Eminent domain (the power) is exercised through condemnation (the process) and requires a public purpose and just compensation under the Fifth Amendment.
Public Controls: Police Power and PETE
Government limits private land use through four public powers, memorized as PETE:
| Power | What it does |
|---|---|
| Police power | Regulate use for health, safety, morals, welfare — zoning, building codes, environmental rules |
| Eminent domain | Take private property for public use with just compensation |
| Taxation | Levy property (ad valorem) taxes; nonpayment creates a tax lien |
| Escheat | Property reverts to the state when an owner dies with no heirs or will |
Zoning is the most visible exercise of police power, dividing land into residential, commercial, industrial, and agricultural districts. When a use predates the zoning that would now prohibit it, it may continue as a legal nonconforming use ("grandfathered"). A variance permits a use that deviates from the code because strict application causes hardship; a conditional (special) use permit allows a listed special use (a church or school in a residential zone) that meets conditions.
Private Controls and the 'Stricter Rule'
Private land-use controls are created by owners, not government. The most common are deed restrictions (restrictive covenants) and the CC&Rs (Covenants, Conditions & Restrictions) of a subdivision or homeowners association. They might cap building height, require a minimum square footage, or bar commercial signage. Enforcement is private — a neighbor or the HOA sues for an injunction.
The key exam rule when public and private controls conflict: the more restrictive (stricter) requirement governs. If zoning allows a 35-foot building but a recorded covenant caps height at 25 feet, the owner is limited to 25 feet. Conversely, a covenant cannot authorize something zoning forbids.
Trap: racially based deed restrictions are unenforceable and illegal under fair-housing law and Shelley v. Kraemer; their presence in old documents does not revive them.
Worked scenario: lien priority at a foreclosure sale
A property sells at a foreclosure auction for $300,000. Recorded claims are: a first mortgage of $220,000 (recorded 2019), a $40,000 home-equity line (recorded 2022), a $9,000 mechanic's lien for a 2023 roof, and $6,000 in delinquent property taxes.
Property-tax and special-assessment liens are superior to all other liens regardless of recording date, so taxes are paid first ($6,000). The remaining $294,000 then pays the rest in order of recording: first mortgage $220,000, then the HELOC $40,000, leaving $34,000 — but the mechanic's lien is only $9,000, so it is fully paid and $25,000 surplus returns to the former owner. The lesson the exam tests: "first in time, first in right," except that tax liens always jump to the front.
Encumbrance quick-reference and common traps
| Encumbrance | Affects title or use? | Key exam point |
|---|---|---|
| Mortgage / tax lien | Money claim on title | Tax lien outranks all; must be cleared to deliver marketable title |
| Easement appurtenant | Use | Runs with the land; benefits the adjacent dominant tenement |
| Easement in gross | Use | Personal/commercial (utility); no dominant tenement |
| Encroachment | Use/title | Unauthorized intrusion; revealed by a survey, not a title search |
| Deed restriction (CC&R) | Use | Private; the more restrictive of zoning vs. CC&R controls |
| License | Use | Revocable personal permission; not an interest in land |
A favorite distractor pairs easement by prescription (acquired by open, continuous, hostile use over the statutory period) with adverse possession. The difference: prescription wins a right to use; adverse possession wins ownership of the fee.
Local zoning permits a maximum building height of 40 feet, but the subdivision's recorded CC&Rs limit height to 30 feet. An owner wants to build a 38-foot home. What is the maximum allowable height?
Encumbrances: Liens vs. Use/Title Limits
An encumbrance is any claim, right, or limitation held by someone other than the owner that affects title or use. Encumbrances do not prevent ownership but reduce its value or freedom. They split into two families:
- Liens — monetary claims against the property as security for a debt. Examples: mortgage, mechanic's lien, property-tax lien, judgment lien. A lien can force a sale to satisfy the debt.
- Use/title limits — non-money restrictions on use or title: easements, encroachments, deed restrictions, and licenses.
Lien priority generally follows "first in time, first in right," with one major exception: real-estate tax and special-assessment liens take priority over all other liens regardless of recording date. That priority is a favorite exam point — a recorded first mortgage still sits behind unpaid property taxes.
Easements, Encroachments, and Licenses
An easement is a right to use another's land for a specific purpose. Two types dominate the exam:
- Easement appurtenant — benefits an adjacent parcel. The benefited land is the dominant tenement; the burdened land is the servient tenement. It runs with the land, transferring automatically to new owners.
- Easement in gross — benefits a person or company with no adjacent (dominant) parcel. Commercial utility easements (power, sewer) are the classic example and are assignable.
Other limits:
- An easement by prescription arises from open, continuous, hostile use for the statutory period (like adverse possession but for use, not ownership).
- An encroachment is an unauthorized physical intrusion (a fence or eave crossing a boundary). A survey reveals it; it can cloud title and may ripen into a prescriptive easement.
- A license is mere permission to use land (a ticket to park); it is personal, non-assignable, and revocable at the grantor's will — distinguishing it sharply from an easement.
Eminent Domain vs. Condemnation
Students confuse these because they are linked. Eminent domain is the government power to take private property for a public use. Condemnation is the legal process by which that power is exercised. The Fifth Amendment requires two things for a valid taking: a public purpose and just compensation (fair market value) paid to the owner.
Inverse condemnation flips the roles: an owner sues the government, arguing that a regulation or government action has so impaired the property that a taking has effectively occurred and compensation is owed, even though no formal condemnation was filed.
Worked compensation example. A state takes a 0.5-acre strip from a 2-acre commercial lot for road widening. The whole parcel was worth $800,000; after the take and resulting access loss, the remainder is appraised at $560,000. Just compensation is the difference: $800,000 − $560,000 = $240,000, which captures both the land taken and the severance damage to the remaining parcel.
A telephone company holds a recorded right to run lines across a homeowner's backyard. There is no neighboring parcel that benefits from this right. What type of interest does the telephone company hold?