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

Public Land-Use Controls: The Four Government Powers

Government limits private ownership through four powers, remembered as P.E.T.E.:

Zoning and police power

Zoning is the most tested police-power tool. Key terms:

• Nonconforming use — a use that was legal before a zoning change and is "grandfathered" to continue, though it usually cannot be expanded or rebuilt if destroyed.
• Variance — permission to deviate from a zoning rule due to hardship (e.g., a setback variance for an odd-shaped lot).
• Conditional/special use permit — allows a use compatible with the zone but needing oversight (a church or school in a residential zone).
• Spot zoning — illegal rezoning of a single parcel inconsistent with surrounding uses.
• Downzoning — rezoning to a lower-density/lower-intensity use.

Eminent domain vs. inverse condemnation: Eminent domain is the government initiating a taking with just compensation. Inverse condemnation is the owner suing because a government action effectively took the property without formal condemnation.

Private Land-Use Controls

Private restrictions arise from private agreements, not government:

• Deed restrictions / restrictive covenants — limits placed in a deed by a grantor (e.g., "single-family use only").
• CC&Rs (Covenants, Conditions & Restrictions) — a comprehensive set of subdivision or HOA rules recorded against all lots.

Private restrictions are enforced by a court injunction, not by police power. Rule of thumb: when a public zoning rule and a private covenant both apply, the stricter (more limiting) of the two controls. So if zoning allows a 35-foot building but the CC&Rs cap height at 25 feet, the 25-foot limit governs. A discriminatory covenant (e.g., racial restriction) is void and unenforceable under fair housing law even though it may still physically appear in old recorded documents.

Encumbrances

An encumbrance is any claim, lien, charge, or right that another party holds in a property. Encumbrances divide into two families:

1. Liens (money/financial claims)

Liens are either general (against all property of a person, e.g., judgments) or specific (against one identified property, e.g., a mortgage or tax lien).

2. Non-money encumbrances

• Easement — a right to use another's land. An easement appurtenant benefits an adjacent parcel and runs with the land: the benefited parcel is the dominant estate; the burdened parcel is the servient estate. An easement in gross benefits a person or company (utility lines) and does not require a dominant estate.
• Easement by prescription — acquired by open, notorious, continuous, hostile use for the statutory period.
• Encroachment — an unauthorized physical intrusion (a fence or eave crossing the boundary line). Discovered by a survey; can ripen into a prescriptive easement if left unchallenged.
• License — a revocable, personal permission to use land (a ticket to park); it is not an interest in the land and does not run with it.
• Lis pendens — a recorded notice of pending litigation affecting title.

Worked trap: A buyer's survey shows the neighbor's garage extends 1.5 feet onto the subject lot. This is an encroachment, not an easement, and is revealed by the survey, not by the title search. If uncontested for the statutory period, the neighbor could claim a prescriptive easement.

Creating and ending easements

The exam tests not just what an easement is but how it arises and dies. Five routes of creation recur:

• Express grant or reservation — written into a deed (the cleanest form).
• Easement by necessity — created when a parcel is landlocked by a conveyance; the law implies a right of access so the parcel is usable.
• Easement by prescription — earned by open, notorious, continuous, hostile use for the statutory period (no permission).
• Easement by implication — inferred from prior apparent use at the time a parcel was divided.
• Easement by condemnation — a government taking of an access or utility right with compensation.

Easements terminate by merger (one owner acquires both the dominant and servient estates), release, abandonment, or expiration of purpose.

Necessity vs. prescription trap: An easement by necessity requires that the parcels were once under common ownership and the split created the landlock; it ends when alternative access appears. A prescriptive easement needs no prior common ownership but does need hostile, non-permissive use over time. If the use was permissive (a friendly neighbor said yes), it is a revocable license, never a prescriptive easement.

Lien priority — the high-yield rule

When a property sells or is foreclosed, lien priority decides who is paid first from the proceeds. The general rule is first to record, first in right, with two major exceptions.

Worked example: A property sells for $300,000. Outstanding claims are a $5,000 property-tax lien, a $220,000 first mortgage (recorded 2019), and a $90,000 second mortgage (recorded 2022). Taxes are paid first ($5,000), leaving $295,000; the first mortgage takes $220,000, leaving $75,000; the second mortgage is owed $90,000 but receives only the remaining $75,000, leaving a $15,000 deficiency. The tax lien's super-priority is why it is paid even though it was the most recent claim.

Subordination can reorder this voluntarily: a lender with an earlier-recorded loan may sign a subordination agreement letting a later construction loan move ahead, which is common in development financing.