3.1 Government Powers and Land-Use Controls

The Four Government Powers (PETE)

The government holds four inherent powers over privately owned real estate. Memorize them with the acronym PETE: Police power, Eminent domain, Taxation, and Escheat. The exam tests whether you can match a scenario to the correct power and know whether compensation is owed.

Police power is the state's inherent authority to regulate private conduct and property to protect public health, safety, welfare, and morals. Zoning, building codes, rent control, and environmental regulations all flow from police power. The key trap: no compensation is paid to owners burdened by police power, because the regulation applies broadly for the public good.

Eminent domain is the government's power to take private property for a public use (a highway, school, or utility). The taking process itself is called condemnation. Unlike police power, eminent domain requires the government to pay the owner just compensation, generally the property's fair market value, as guaranteed by the Fifth Amendment.

Taxation is the power to levy charges (ad valorem property taxes and special assessments) to fund government services. Unpaid property taxes create a specific lien against that parcel and can lead to a tax foreclosure.

Escheat returns property to the state when an owner dies intestate (without a will) and leaves no heirs, or when property is abandoned. Escheat prevents land from becoming ownerless.

Public Land-Use Controls

The broadest public tool is the master plan (also called the comprehensive plan): a long-range policy document a municipality adopts to guide growth in housing, transportation, and open space. Zoning ordinances are the legal mechanism that implements the plan, dividing land into districts (residential, commercial, industrial, agricultural) and setting bulk standards such as setbacks, height limits, and lot sizes. Building codes set minimum construction standards; compliance is confirmed by a certificate of occupancy before a structure may be used.

When the strict zoning rule creates a problem, owners have relief options:

The classic distinction the exam loves: a variance is permission to break the current rule due to hardship, while a nonconforming use never broke the rule—it predated the change. A grandfathered use generally cannot be expanded or rebuilt if destroyed.

Subdivision regulations govern how raw land is divided into lots; developers record a plat map and often must dedicate land for streets, utilities, and parks.

Two more public tools appear on exams. A planned unit development (PUD) lets a developer mix housing, retail, and open space within one project under flexible, negotiated standards rather than rigid single-use zoning. A buffer zone is a strip of land—such as a park, a row of trees, or a lower-density district—placed between incompatible uses, like commercial and residential areas, to ease the transition.

Finally, an owner who believes a regulation has gone so far that it leaves the land with no economically viable use may claim an unconstitutional regulatory taking (inverse condemnation) and demand compensation, blending police power with eminent-domain principles.

Private Land-Use Controls

Land use is also restricted by private agreements that do not involve government. Deed restrictions and restrictive covenants (often packaged as CC&Rs—Covenants, Conditions & Restrictions) are imposed by developers or subdividers and recorded against the land. They might forbid commercial use, set a minimum home size, or dictate roof color.

The most heavily tested rule: when a private restriction and a public zoning ordinance both apply, the more restrictive one controls. If zoning allows duplexes but the CC&Rs require single-family homes, the CC&Rs win. Private restrictions are enforced by other owners or a homeowners association (HOA) through an injunction, a court order compelling a violator to stop, not by the city. A covenant that discriminates on a protected class (race, religion, etc.) is void and unenforceable under fair-housing law, even if still written in an old deed.

A related concept is the deed condition. While a covenant breach leads to an injunction or damages, a violated condition can cause the grantor (or heirs) to actually reclaim title—a far harsher remedy. The exam contrasts these: a covenant restricts how you use land, while a condition can defeat your ownership entirely. Restrictions may also end through abandonment or a change of conditions in the neighborhood, where a court declares the original purpose no longer achievable.

Putting the Controls Together

In practice a single parcel is layered with controls: the comprehensive plan sets policy, zoning and building codes enforce it publicly, subdivision regulations govern how the land was originally divided, and private CC&Rs add another layer enforced by neighbors. A buyer's due diligence should check all layers, because a use that zoning permits may still be barred by a recorded covenant. When two public controls conflict, the stricter standard again governs—if zoning allows a 35-foot building but the building code or an overlay district caps height at 30 feet, the 30-foot limit applies.

Always trace a use through every control before assuming it is allowed.