Constrained Rights: Governmental Burdens and Limitations

restricted rights❓: Burdens and Government Restrictions

Introduction:

Fee Simple ownership is the most complete form of real property rights, but the owner’s control is not absolute. All private property rights are subject to government powers, including eminent domain, taxation, police power, and escheat.

Scope and Classifications of Restricted Rights:

Restricted rights limit the scope of the owner’s complete rights. They are classified into:

• Encumbrances: Rights that do not include the exclusive right to use and occupy the property (Non-Possessory Interests).
• Government Restrictions: Powers exercised by the government that restrict the owner’s use of the property.

Encumbrances:

Encumbrances are non-possessory rights affecting property use, divided into:

1. Financial Encumbrances (Liens/Security Interests):

   • Lien: A creditor’s right in a debtor’s property, allowing the creditor to sell the property to settle the debt if the debtor defaults. The forced sale is called “Foreclosure.”
   • Types of Liens:
     • Voluntary Lien: Created willingly by the debtor (e.g., Mortgages, Deeds of Trust).
     • Involuntary Lien: Created by law (e.g., Tax Liens, Judgment Liens, Construction Liens).
     • General Lien: Affects all properties owned by the debtor (e.g., Judgment Liens).
     • Specific Lien: Applies only to a specific property (e.g., Mortgages, Real Estate Tax Liens, Construction Liens).

2. Non-Financial Encumbrances: Affect property use.

   • Easement: A non-exclusive right to use another’s property for a specific purpose. The property subject to the easement is the “Servient Tenement,” and the benefiting property is the “Dominant Tenement.”
     • Appurtenant Easement: Benefits a specific property (Dominant Tenement) and transfers with the property.
     • Easement in Gross: Benefits individuals or organizations (e.g., utility companies).
   • Profit a Prendre: The right to take something from the property (e.g., crops, fruit, gravel, timber, minerals).
   • Emblement: A tenant’s “one-time” right to harvest a crop planted before the property sale.
   • Private Restrictions: Private deed restrictions or Covenants, Conditions, and Restrictions (CC&Rs), created in the deed, usually when a subdivision is created.

Government Restrictions of Property Rights:

Even with Fee Simple ownership, the owner’s rights are subject to government powers:

1. Eminent Domain: The government’s power to take private property for public use, with just compensation to the owner. A Condemnation lawsuit can be filed to force the owner to relinquish the property.

   • Just Compensation: Typically based on the Fair Market Value (FMV) of the property at the time of condemnation.
   • Compensation = FMV - (Benefits to Remaining Property)

2. Taxation: Property ownership is subject to General Property Taxes and Special Assessments. General Property Taxes are Ad Valorem Taxes.

   • Special Assessments: Taxes on specific properties to cover the cost of public improvements benefiting❓❓ those properties, forming a Local Improvement District.

3. Police Power: The government’s power to regulate for public health, safety, and welfare, the basis for land use❓ regulations like community planning, zoning, building codes, subdivision development regulations, and environmental protection laws.

4. Escheat: The reversion of property to the state when an owner dies Intestate with no known Heirs.

Impact of Government Restrictions on Property Value:

Government restrictions can significantly impact property value. Zoning can restrict land uses, affecting value. Public improvements funded by special assessments can increase property values. The potential for condemnation can decrease property value.