Lecture 8 Land Use Controls

Lecture 8 Public Controls on Real Estate Use

Limits and Public Controls 1.Police Power 2. Eminent Domain 3. Taxation and Assessment 4. Escheat

Police Power “Enables governments to protect the public by regulating factors that can adversely affect the public health, morals, safety, and general welfare.” Four Types of Police Power 1. Zoning Ordinances 2.Subdivision Regulations 3. Construction Codes 4. Occupancy Codes

Police Power: Zoning Ordinances Elements of the Zoning Ordinance: Land Use Regulation: Industrial, Commercial, Residential, Agricultural (may contain subcategories) Height Regulations: Specific to area (buildings in residential areas v. downtown areas v. near airports) Area (“bulk”) Regulations: Improvement-to-land coverage ratios, restrictions to land size and building setbacks

Police Power: Zoning Ordinances Changes to Zoning Ordinances Variances: Hardship must be proven on height or area regulations -Example: Changes in setbacks Rezoning Application: Desired change in land use -Example: Single-Family Residential to Multi-Family Residential or Commercial Nonconforming Use: Real estate constructed and in use prior to governed land-use regulations

Police Power: Subdivision Regulations Local planning departments review and approve builders’ plans for developments within a Municipality in accordance with Comprehensive Plan. Prevents construction on floodplains, areas of poor or inadequate drainage capacity, poor soil conditions Prevents development in areas of overpopulation and lack of infrastructure Reviews and approves plat maps (public records)

Police Power: Construction Codes Imposed by local government. Specifies floors, walls, ceilings, roof structures, electrical and plumbing, etc. Steps of Governance of Construction Codes: 1.Application for Building Permits 2. Stages during construction 3. Certificate of Occupancy

Police Power: Occupancy Codes “Designed to establish socially acceptable minimum standards for safe and healthy occupancy of existing and newly constructed buildings.” Condemned Buildings Properties lacking required facilities

Eminent Domain “A right vested in the state government and given to a local government (even given to private agencies) to acquire possession of private property” Condemnation: The ACT of converting private property to public property Just Compensation: Compensation equal to the value to the property

Eminent Domain Forms of an Eminent Domain Take: 1.Full Taking 2. Partial Taking Legal Interests of an Eminent Domain Take: 1.Fee-Simple Take 2. Perpetual Easement 3. Temporary Construction Easement

Eminent Domain Compensations Due to Property Owners 1.Market value of the land and improvements being taken by Eminent Domain 2.Severance damages to property from a change in development or property use 3. Cost to cure the severance damages (if feasible) 4. In Florida, owner reimbursed for legal fees, appraisers, land planners, etc.

Example of Severance Damages (BEFORE PARTIAL TAKING) SITE A: $20 psf 2 Access Pts SITE B: $20 psf 2 Access Pts SITE C: $12 psf 1 Access Pt

Example of Severance Damages (AFTER PARTIAL TAKING) SITE A: $12 psf 1 Access Pt SITE B: $20 psf 2 Access Pts SITE C: $12 psf 1 Access Pt

Taxation and Assessment The taxation of real property to provide public services (I.e. schools, roads, etc.). Handled by office of the Property Appraiser. Property Tax Lien: Placed on real estate when delinquent taxes exist. Supercedes to any lien Special Assessments: Benefit to specific properties, not the general public (stormwater retention, streets, etc.)

Property Appraiser Web Sites City of Jacksonville/Duval County: St. Johns County: Clay County:

Escheat Enacted when a property owner dies and does not leave a will (intestate), and no legal heirs can be found. STATE GOVERNMENT ESCHEATS THE PROPERTY FOR THE STATE

Lecture 8 Public Agencies’ Influence in the Real Estate Business

Roles of Federal Government Antitrust Litigation (U.S. Justice Department) – Prevents setting fixed sales commission rates in a market Mortgage Regulation (Federal Reserve Board, HUD) – RESPA, ECOA, Truth-In-Lending, Mortgage Disclosure Act Right of Eminent Domain Air and Water Controls (EPA) Prevents Unfair Trade Practice (Federal Trade Commission) Housing and Financing for Low- to Moderate-income families – FHA, VA, Farmers Home Loans – Promotes standards of construction quality

Roles of State Government Controls over “bundles of rights” – Estates, Escheat, etc. Right of Eminent Domain

Roles of Local Government Levy ad Valorem Property Taxes and their distributions – School districts, special improvement districts, and townships can levy ad Valorem taxes. Impose and enforce zoning and land use regulations Impose and enforce building, subdivision, and safety regulations Eminent Domain passed down by State Government

Lecture 8 Private Controls on Real Estate Use

Private Controls and Limits Non-governmental units impose limits. Three Major Types 1.Easements 2.Liens 3.Restrictive Covenants

Private Controls: Easements “An easement is the right of one person to use the property of another for a specified purpose and under certain conditions that specify the extent of the allowable usage. The person holding the easement does not possess the property, nor does that person have the right to dispose the property.” Two Types of Easements 1.“Runs with the land” 2.Does not “Run with the land”

Private Controls: Easements Easements which “Run with the Land” (Can be passed from one owner to the next) Easement Appurtenant: At least two parcels, where one at least one parcel benefits from the use of another parcel – Dominant Estate: Receives benefit from easement use – Servient Estate: Allows use of land to benefit dominant estate Commercial Easement in Gross: A right-of-way over one piece of land – Railroads, pipelines, municipal utilities Easements which do not “Run with the Land” (Cannot be passed from one owner to the next) Easement-in-gross: Involves only ONE parcel of real estate; cannot be sold

Private Controls: Easements Creation of Easements 1.Express Agreement: Contractual agreement 2.Necessity of Implication: Circumstances requiring legal efforts; as easement is required for land access

Private Controls: Liens “Right of a creditor to petition the courts to force the sale of a debtor’s property in order to obtain payment.” Specific Lien: Affects specified real estate – Tax lien, mortgage lien, mechanic’s lien General Lien: Non-specific to specific real estate, but rather a specific asset holder

Private Controls: Restrictive Covenants Covenants placed in a deed of property conveyance. Restrictions can be imposed on land use by a seller, who owns adjacent parcels Restrictions can be imposed by a land developer, specially in residential developments – General plan restriction (filed with municipality) – Declaration of restrictions (referenced in deeds) Promote uniformity in neighborhoods to increase property values