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

Public Land-Use Controls: PETE

Government limits private ownership through four powers. Remember PETE:

Critical distinction: police power (zoning) requires no compensation even though it limits use, while eminent domain requires just compensation because the government actually takes the property. A regulation that goes so far it destroys all economic value can become a 'regulatory taking' requiring compensation — but ordinary zoning does not.

Zoning relief and nonconforming use

Because zoning is rigid, several relief mechanisms appear on the exam:

• Variance — permission to deviate from a zoning rule due to hardship (e.g., a smaller setback on an odd-shaped lot).
• Special (conditional) use permit — allows a use compatible with the zone but needing oversight (a church or daycare in a residential zone).
• Nonconforming use ('grandfathering') — a use that was legal before the zoning changed may continue, but usually cannot be expanded or rebuilt if destroyed.
• Spot zoning — illegally reclassifying a single parcel for the benefit of one owner, inconsistent with the master plan.

Private Land-Use Controls

Private restrictions come from deed restrictions and CC&Rs (Covenants, Conditions & Restrictions) recorded by a subdivision developer. They are enforced by a court injunction, not by government.

The governing rule: when a public restriction (zoning) and a private restriction (CC&R) conflict, the more restrictive one controls. If zoning allows a 35-foot building but the CC&R caps height at 25 feet, the owner is bound to 25 feet.

Encumbrances

An encumbrance is any claim, lien, charge, or right held by someone other than the owner that affects the title or use of the property. Encumbrances do not prevent transfer, but they travel with the title. They split into two families.

1. Liens (financial / money encumbrances) affect the title and secure payment of a debt.

• Specific liens attach to one identified parcel.
• General liens attach to all of the debtor's property.

2. Non-money encumbrances affect the use of the property: easements, encroachments, deed restrictions, and licenses.

Easements

An easement is a right to use another's land for a specific purpose. The two main types are tested constantly:

• Easement appurtenant — involves two adjoining parcels. The dominant tenement benefits; the servient tenement is burdened (e.g., a driveway crossing a neighbor's lot). It runs with the land and transfers automatically to new owners.
• Easement in gross — benefits a person or company, not a parcel. Utility easements (power lines, pipelines) are the classic example. There is no dominant tenement.

Creation methods include express grant, easement by necessity (a landlocked parcel needs access), easement by prescription (open, continuous use over the statutory period without permission), and easement by implication.

Encroachments and licenses

An encroachment is an unauthorized physical intrusion of a structure (fence, eaves, driveway) onto a neighbor's land. It is discovered by a survey and can ripen into a prescriptive easement if left unchallenged. A license is mere permission to use land (a ticket to park); it is personal, revocable, and is NOT an encumbrance on title.

Lien priority worked example

When a property is sold at foreclosure, liens are generally paid in order of recording date — '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 when they were recorded.

Scenario. A property sells at foreclosure for $300,000. Recorded claims:

Payment order:

1. Property tax lien — $30,000 (paid FIRST despite latest date)
2. First mortgage — $220,000
3. Mechanic's lien — $50,000 available, but only $40,000 owed → fully paid

Total paid: $30,000 + $220,000 + $40,000 = $290,000, leaving $10,000 surplus to the former owner. The lesson: tax liens jump the line.

Deed restrictions, HOAs, and termination of easements

Recorded CC&Rs typically establish a homeowners association (HOA) with power to levy assessments and enforce architectural standards. Unpaid HOA assessments can become a lien and, in many states, support foreclosure. A deed restriction runs with the land and binds future owners, but courts will not enforce a restriction that has been abandoned (the neighborhood ignored it for years) or that violates public policy — notably, racially restrictive covenants are void and unenforceable under Shelley v. Kraemer and the Fair Housing Act.

Easements end in predictable ways the exam tests directly:

• Merger — the dominant and servient parcels come under one owner; an easement cannot exist over one's own land.
• Release — the dominant owner formally relinquishes the easement in writing.
• Abandonment — the holder shows clear intent to stop using it (mere non-use is usually not enough by itself).
• End of necessity — an easement by necessity terminates when alternative access arises.

Worked priority twist: a parcel benefits from a recorded driveway easement appurtenant. The servient owner sells; the new owner cannot revoke it because it runs with the land and was recorded, giving constructive notice. Contrast an easement in gross held by an individual, which generally does not transfer with the dominant land because there is no dominant parcel. Finally, distinguish an easement (a right to use) from a profit (the right to take something from the land, such as timber or gravel) and from a license (revocable permission). The exam rewards spotting which of these three a fact pattern describes.