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

The Four Government Powers (PETE)

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

• Police power — regulating use for public health, safety, morals, and welfare (zoning, building codes). No compensation owed.
• Eminent domain — the power to take private property for public use; exercised through condemnation, requiring just compensation under the Fifth Amendment.
• Taxation — levying ad valorem (property) taxes; unpaid taxes become a superior lien.
• Escheat — when an owner dies with no heirs and no will, property reverts to the state.

Distinguish: police power regulates without paying; eminent domain takes and must pay.

Public Controls: Zoning and Relief

Zoning ordinances classify land (residential, commercial, industrial, agricultural) and set bulk rules (setbacks, height, density). They flow from a comprehensive master plan. Three relief mechanisms are heavily tested:

Trap: a nonconforming use predates the law; a variance and special-use permit are granted after applying.

Private Controls: CC&Rs and Deed Restrictions

Private parties limit land use through deed restrictions (restrictive covenants) and subdivision-wide CC&Rs (Covenants, Conditions & Restrictions), often enforced by a homeowners' association. Examples: minimum square footage, prohibited fence types, architectural review.

Critical rule: when a private restriction and a public zoning rule conflict, the more restrictive one prevails. If zoning allows a 35-foot building but the CC&Rs cap height at 25 feet, the owner is bound by 25 feet. Likewise, a private covenant cannot override a stricter zoning limit.

Encumbrances: Liens vs. Non-Money Claims

An encumbrance is any claim, charge, or right that affects title or limits use. Two families:

1. Liens (money encumbrances): mortgages, property-tax liens, mechanic's liens, judgment liens. They attach to the property as security for a debt.
2. Non-money encumbrances: easements, encroachments, deed restrictions, licenses. They affect use or physical boundaries rather than securing money.

Liens affect title and can force a sale; non-money encumbrances affect use and enjoyment. A buyer takes title subject to recorded encumbrances, which is why title search and survey matter.

Easements and Encroachments

An easement is a right to use another's land for a specific purpose. Two types:

• Easement appurtenant — attaches to and runs with the land. The dominant tenement benefits; the servient tenement is burdened (e.g., a shared driveway). It transfers automatically with the parcel.
• Easement in gross — benefits a person or entity, not a parcel (utility power lines, billboard easements). No dominant tenement.

An easement by prescription arises from open, notorious, continuous, hostile use for the statutory period. An encroachment is an unauthorized physical intrusion (a fence or eave crossing a boundary), discovered by survey; it can cloud title and may ripen into a prescriptive easement if left unchallenged.

Liens by Priority and Type

Liens are the money family of encumbrances, and the exam tests both their classification and their priority.

• General vs. specific liens. A specific lien attaches to one identified property (mortgage, property-tax lien, mechanic's lien, special assessment). A general lien attaches to all of a debtor's property (a judgment lien, an IRS/state income-tax lien, an estate or inheritance lien).
• Voluntary vs. involuntary. A voluntary lien is created by the owner's act (a mortgage). An involuntary lien arises by law without consent (tax lien, mechanic's lien, judgment).
• Statutory vs. equitable. A statutory lien is created by law (property taxes); an equitable lien arises from fairness or contract terms.

Priority rule: generally "first to record, first in right." The critical exception is the property-tax (ad valorem) lien and special assessments, which take priority over all other liens regardless of recording date. A mechanic's lien often relates back to the date work began or materials were first furnished, which can give it priority over a later mortgage — a frequent trap.

Worked Scenario: Sorting Encumbrances

The exam likes to give a single fact pattern with several encumbrances and ask you to classify or prioritize them.

Worked example: A property carries (1) a recorded first mortgage from 2019, (2) unpaid 2024 property taxes, (3) a 2023 recorded judgment lien against the owner, and (4) a recorded utility easement.

• Item 4 (easement) is a non-money encumbrance affecting use, not a lien; it does not compete for sale proceeds and the buyer takes title subject to it.
• Among the money liens, item 2 (property taxes) has first priority despite being the most recent, because tax liens are superior to all others.
• The 2019 mortgage outranks the 2023 judgment under first-in-time recording.
• Payment order from a foreclosure sale: property taxes, then the 2019 mortgage, then the 2023 judgment.

A buyer should require that all liens be cleared at or before closing and should obtain a survey to reveal encroachments and confirm the easement's location, since unrecorded physical intrusions will not appear in a title search.

Liens by Priority and Type

Liens are the money family of encumbrances, and the exam tests both their classification and their priority.

• General vs. specific liens. A specific lien attaches to one identified property (mortgage, property-tax lien, mechanic's lien, special assessment). A general lien attaches to all of a debtor's property (a judgment lien, an IRS/state income-tax lien, an estate or inheritance lien).
• Voluntary vs. involuntary. A voluntary lien is created by the owner's act (a mortgage). An involuntary lien arises by law without consent (tax lien, mechanic's lien, judgment).
• Statutory vs. equitable. A statutory lien is created by law (property taxes); an equitable lien arises from fairness or contract terms.

Priority rule: generally "first to record, first in right." The critical exception is the property-tax (ad valorem) lien and special assessments, which take priority over all other liens regardless of recording date. A mechanic's lien often relates back to the date work began or materials were first furnished, which can give it priority over a later mortgage — a frequent trap.

Worked Scenario: Sorting Encumbrances

The exam likes to give a single fact pattern with several encumbrances and ask you to classify or prioritize them.

Worked example: A property carries (1) a recorded first mortgage from 2019, (2) unpaid 2024 property taxes, (3) a 2023 recorded judgment lien against the owner, and (4) a recorded utility easement.

• Item 4 (easement) is a non-money encumbrance affecting use, not a lien; it does not compete for sale proceeds and the buyer takes title subject to it.
• Among the money liens, item 2 (property taxes) has first priority despite being the most recent, because tax liens are superior to all others.
• The 2019 mortgage outranks the 2023 judgment under first-in-time recording.
• Payment order from a foreclosure sale: property taxes, then the 2019 mortgage, then the 2023 judgment.

A buyer should require that all liens be cleared at or before closing and should obtain a survey to reveal encroachments and confirm the easement's location, since unrecorded physical intrusions will not appear in a title search.