RE: Private Restrictions on Property

Even someone who holds a fee simple interest in real estate is restricted in what they can do with the property

- Private agreements and claims may restrict how property can be used
- Encumberance is a right or interest by someone other than the property owner that affects the title or use of real estate
- Public regulation and other governmental action may limit an owner's use of the property

LIENS
Lien is a claim or charge against a person's property made to enforce the payment of money

Types of Liens: Mortgage Liens; Tax Liens; Mechanics Liens

If the required bills are not paid, liens can be used to force the sale of the proerty
Often liens simply represent a claim on the proceeds from the sale of the property whenever it occurs

Liens "run with the property" and encumber future owners

EASEMENTS
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 allowable usage.

Easement in gross - individual interest in the property
Appurtenant easement - associated with another parcel. Runs iwth the land. Meaning if either party to the agreement sell the property - the easement is sold with it.

TERMINANTING EASEMENTS
- Agreement of the parties
- Merger of the properties
- Abandonment of the rights
- Purpose of easement ceases
- Excessive use

Other ways someone may use your property
- Encroachment is unauthorized inversion on intrusion of fixture, building or other improvement over property line

License is revocable permission to temporarily use the property for a specific purpose

Profit a Prendre is a non-possessory interest in real property that permits the holder to remove part of the soil or produce of the land.

Adverse Possession
If an individual takes possession and uses real estate as if it were his own, eventually he may file an action in court to claim title through adverse possession

To do this - the use must be
- Open and notorious (Someone looked or obvious to anyone who looks)
- Continuous and uninterrupted 10-15 years
- Actual and exclusive (not just one of many)
- Hostile and without the owner's consent
- Adverse to the true owner's possession

Restrictive Covenants
Designed to help mitigate spillover effects among properties (positive/negative)

Restrictive covenants set standards for all the parcels within a defined subdivision. They govern the type, height and size of buildings that individual owners can erect, as well as land use, architectural style, construction methods, setbacks and square footage.

Covenants require private actions by other landowners to enforce. If not enforced for a long period of time, the right can be lost.

Property Taxes & Specials

Property Tax Assessment
- Property taxes are levied on the owners of real estate based on the assessed value of the property owned (ad valorem tax)
- Types of taxes - state/city/school district/counties/townships

- Most states exempt certtain real estate from taxation and local jurisdictions often provide tax abatements for certain industries

Property taxes are based on ASSESSED VALUE of the property. Not its true market value.
Assessed value is often fixed fraction of market value

Eg: Residential - 11.5%; Non-Profit - 12%; Commercial - 25%; Vacant Land 12%
Farm land is assessed based on its use value

Levying property taxes
Tax process begins with adoption of a budget. After budget is approved, an appropriation is passed to authorize the expenditure. Tax Levy is formal action taken to impose the tax.

Tax Rate is calculated by dividing the total funds needed by the taxing authority by the total assessed value of taxable properties in the district.

A mill is 1/1000 of a dollar or 0.001

EG: Budget estimates it needs 85,103,450 in property tax revenues.
Estimated assessed value of property in city was 2,673,854,934

Resulting tax rate is 85,103,450/2,673,854,934 = 3.1828%
Resulting mill rate is 0.031828 x 1000 = 31.828 mills

You owned a 125,000 house. Assessed value is 11.5% of actual value = 14,375

Tax bill is
State - Assessed value 14,375 Mill rate 20.000 Taxes Due 287.50
USD Mill rate 36.850 Taxes Due 529.72
City Mill rate 32.142 Taxes Due 462.04
County Mill rate 29.868 Taxes Due 429.35
State Mill rate 1.500 Taxes Due 21.56
Total $1730.17

If you owned a commercial building worth 2.35 million
Assessed value 587,500 Tax bill 70,711.50

Special Assessements
Infrastructure improvements (streets, sewers, sidewalks, etc) in new developments and existing neighborhoods are financed using special assessements

City pays for improvements using general obligation bond
Princial and interest payments on the bond are asessed to the property owner on the tax bill

Pros - property owner gets to borrow at city's financing rate
Cons - City assumes default risk


Urban Planning & Comprehensive General Plan
Urban planning is necessary to ensure that required public services are available for urban growth as it occurs.

Comprehensive Plan is used as a guide when making specific land-use and other urban policy decisions. It presents a vision for what the community will look like in coming decades.

Comprehensive plan should be used to anticipate and prepare for growth and the infrastructure needs that will come with that growth.

Comprehensive Plan projects
- Population & Employment
- Land use requirements
- Housing needs
- Community facilities & utilities
- Transportation needs

ZONING CODES
Zoning ordinances are local laws that divide land in the jurisdiction into zones each with its own restrictions on the type of permitte use and the maximum intensity of that use